VAT Rate Application

Dáil Éireann Debate, Tuesday - 27 September 2016

Tuesday, 27 September 2016

Questions (214)

Brendan Smith

Question:

214. Deputy Brendan Smith asked the Minister for Finance if he will provide favourable consideration to the request of the Irish Hotels Federation to retain the 9% VAT rate; if his attention has been drawn to the fact that this issue is of particular concern to the hospitality sector in the Border region as a result of the challenges in retaining business from north of the Border due to the weakness in sterling; and if he will make a statement on the matter. [27453/16]

Written answers

Minister for Finance

The 9% reduced VAT rate for tourism related services was introduced in July 2011 as part of the Government Jobs Initiative. The measure was designed to boost tourism and create additional jobs in that sector. The Programme for a Partnership Government published in May, includes a commitment to retain the hugely successful 9% VAT rate on tourism related services, providing that prices remain competitive. With reports of rising prices within the tourism sector, particularly in Dublin, it is incumbent on the industry to ensure that this relief continues to be passed through fully to the consumer. My Department will continue to monitor developments in this regard. However, I would point out that the UK, which would be considered Ireland's main competitor in the tourism market, applies their standard VAT rate of 20% to tourism services.