In response to the latest Business Post/Red C poll, the Irish Hotels Federation (IHF) has renewed its call on the government to retain the 9% tourism VAT rate. Results of the poll reveal that two-thirds of people (66%) now believe the current rate for hotels and restaurants should be extended, with less than a quarter of people (23%) against.
The potential increase in tourism VAT by the government at the end of February is a major worry for Irish hotels, guesthouses and the wider tourism industry which collectively supports over 250,000 livelihoods throughout the country.
Recent industry research indicates that 81% of hoteliers are very concerned about the impact a VAT increase would have on their businesses given the very challenging economic headwinds facing the sector over the next 12 months.*
This is at a time when consumer confidence is close to decade lows across key tourism markets in the midst of a cost-of-living crisis with consumers dealing with exceptionally high levels of inflation and increases in mortgage interest rates.
IHF Midlands Branch Chair Barry Kennedy said: “It is very worrying that the Government is contemplating an increase when many of our key tourism markets are experiencing a cost-of-living-crisis. Increasing consumer taxes such as tourism VAT is the last thing we should be doing at this point.
“People in Ireland and across our overseas markets are already being squeezed by exceptionally high levels of inflation and other pressures on their finances, which means there is a real risk that many will pull back from discretionary spending on holidays and breaks away.
“We are urging the government to retain the tourism VAT at its current rate. Any increase would have a significant inflationary impact and would damage our tourism competitiveness, with Irish consumers and overseas visitors having to pay the third highest tourism VAT rate in all of Europe*.
“The focus of the government should be on safeguarding tourism livelihoods and securing the long-term sustainable recovery of our industry. Now is not the time to put tourism recovery at risk by increasing VAT.”
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