Hoteliers urge Government to keep 9 per cent VAT so industry can thrive
Hotel and guesthouse owners in Wicklow are calling on the Government to avoid introducing measures in this autumn’s budget which could damage the tourism industry.
Tourism in the Garden County supports 13,900 jobs and contributes €174m to the local economy.
Brian McNamara, Chair of the Wicklow branch of the Irish Hotels Federation feels the 9 per cent VAT rate remains the right rate for the sector and brings Ireland more closely in line with tourism VAT rates in other competing European countries.
‘Its positive impact has exceeded expectations. Over 65,000 new jobs have been created across every town and county since 2011, making the 9 per cent VAT rate one of the most successful job-creation initiatives in modern times,’ said Mr McNamara.
While the sector has achieved a return to growth, hotel owners are adamant that there is no room for complacency with the tourism sector facing enormous difficulties due to the uncertainty around Brexit and the fall in the value of sterling.
‘Our industry is heavily dependent on the economic environment of our major source markets, and we are very vulnerable to external economic shocks, as the fall in UK visitors has shown,’ said Mr McNamara. ‘At a time of serious economic uncertainty around Brexit, it absolutely incredible to suggest that the Government should undermine the sector and impose hundreds of millions in additional taxes on visitors, and make us less attractive. Government cannot influence the economic conditions affecting other countries but policy measures that can enhance competitiveness are within their control. The 9 per cent VAT rate has been hugely significant in underpinning the recovery of the tourism sector. Any increases in taxes on tourists now would make a very fragile situation worse by making us less competitive and attractive as a destination’.
Tourism now generates €2 billion in taxes for the exchequer each year and the industry is on track to creating a further 40,000 jobs nationally over the next five years. However, the IHF maintains that this growth can only occur by retaining the 9 per cent VAT rate. Tourism growth is also allowing hoteliers across Wicklow to re-invest revenues in refurbishment, renovation, product development and innovation. Mr McNamara insists this much needed investment is critical for improving competitiveness and is an essential element of the sector’s response to the direct and indirect challenges of Brexit.
He said: ‘We should be focusing on ensuring that the right conditions are in place so that tourism in Wicklow and across the country can deliver long-term sustainable growth and further employment generation’.