Dublin hoteliers urge government to retain  lower Tourism VAT

A big sigh or relief from Dublin hoteliers this week as a result of comments by Minister for Tourism Catherine Martin, TD

by Rose Barrett
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Dublin Skyline, Liffey, Dublin, Dublin City

Minister Martin stated on Monday that she would seek a further extension of the 9 per cent VAT rate for the Irish tourism and hospitality sector, against the anticipated rise to 13.5 per cent.

The tourism VAT rate is due to expire at the end February but in light of economic challenges for the sector, pressure has been targeted at the government to retain the VAT rate at 9 per cent.

Dublin hoteliers are among those shouting the loudest, to safeguard tourism livelihoods and secure the long-term future of Irish tourism.

The industry is described as being at a “critical juncture” with consumer confidence at an all-time low as consumers and market interests face a cost-of-living crisis.

Record levels of inflation have seen energy and running costs spiral upwards, with wage increases and employment difficulties for the sector.

Last year, the Irish Hotels Federation (IHF) called on the Government to extend this measure out to 2025 in order to maintain international competitiveness with other European destinations.

With the Covid 19 pandemic, followed by the Russian invasion of the Ukraine, energy costs and interest rates have skyrocketed, with a full recovery in tourism unlikely to be experienced until 2026. An increase in the VAT rate to 13.5 per cent was for the catering industry, a final nail in its coffin.

A 13.5 per cent VAT rate would have seen international tourists pay the third highest rate of VAT in Europe.

Stock Image Dublin City © Shahid Khan | Dreamstime.com

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