Wednesday, 2 April 2014

Questions (276)

Brendan Griffin

Question:

276. Deputy Brendan Griffin asked the Minister for Transport, Tourism and Sport the data his Department has available to highlight the positive impact on the industry of the 9% reduced rate of VAT since its introduction; and if he will make a statement on the matter. [15677/14]

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Written answers (Question to Transport)

I strongly supported the continuation of the 9% VAT rate on the basis that the initiative had proved to be a major success.  This was based on the review of the impact of the reduced rate of VAT commissioned by Fáilte Ireland.  In summary, the report found there were a number of very positive developments in the tourism and hospitality industry after the introduction of the reduced rate.  These include: employment in all sectors covered by the 9% rate increased by approximately 10,000 up to the first quarter of 2013, including an increase of 7,000 in tourism and hospitality employment; price pass-through of the rate reduction to consumers was evident across nearly every category; renewed growth in overseas tourism numbers and earnings; increased activity levels apparent across the industry; and improved value for money perception across all visitors.

The report was published on Fáilte Ireland's website at the following address: http://www.failteireland.ie/FailteIreland/media/WebsiteStructure/Documents/3_Research_Insights/3_General_SurveysReports/Failte-Ireland-VAT-Study-1-0.pdf?ext=.pdf. Indeed, since that report was compiled, employment in the core accommodation and food sectors has increased further and the seasonally adjusted total in Quarter 4 of 2013 was 137,100, levels of employment in the sector not seen since 2007.  The continuation of the reduced rate is recognition by the Government of the importance of the tourism industry to the economy.  Together with other Budget initiatives such as the reduction in the travel tax to zero, the raising of the VAT threshold, the investment in the Wild Atlantic Way and the continuation of the diesel rebate, it will support the jobs in the sector and help create new jobs.

I thank my colleague Minister for Finance for maintaining the rate and urge tourism businesses to fully utilise the reduced rate while it remains in place to maintain value for money and support growth and job creation.

Question No. 277 answered with Question No. 259.