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Joint Committee on Tourism, Culture, Arts, Sport and Media recommends extending 9% VAT rate to 2025 and other measures to support the reopening of hospitality and entertainment sectors

21 Jul 2021, 14.00

The Joint Committee on Tourism, Culture, Arts, Sport and Media today recommends that the Government extend the 9% VAT rate out to 2025 to provide certainty for businesses in the hospitality and entertainment sectors as they reopen following the public health restrictions due to the pandemic.

In its report, The Impact of COVID-19 on the Hospitality and Entertainment Sectors, the Committee makes 27 recommendations around financial and other supports for businesses and workers, new initiatives to encourage spending across hospitality and entertainment, and reviews of legislation and guidelines affecting these sectors.

Launching the report, Deputy Niamh Smyth, Cathaoirleach of the Committee, said: “Ireland’s hospitality and entertainment sectors have suffered immense adversity as a result of the COVID-19 pandemic. Pubs, hotels, and restaurants are all part of an indigenous tourism industry that has been devastated by Covid-19. The Committee heard that, economically, tourism was hit first, hit hardest, and will take the longest to recover.

“We heard evidence that hospitality businesses are on the brink of collapse, with some 50% of restaurants facing permanent closure – while revenue across the hotel sector fell by more than €2.5 billion in 2020, marking an unprecedented drop of 60%, while the immediate outlook remains exceptionally challenging in 2021.

“The challenges facing the entertainment sector are no less severe. Evidence presented to the Committee notes that, of 55,000 workers in the arts, 58% have been wholly reliant on the Pandemic Unemployment Payment or Employment Wage Subsidy Scheme.

“The economic and social consequences arising from the pandemic, and from the State’s response to the pandemic, has presented – and will continue to present – significant difficulties for workers and businesses in the hospitality and entertainment sectors over the months and years to come.

“In recent months, the Committee has engaged with a range of views and stakeholders within these sectors and this laid bare the extent of the harm caused by the pandemic and the measures needed to encourage and assist recovery. Following consideration of all oral and written evidence presented, the Committee identified a number of key issues and makes recommendations which highlight the urgent nature of the situation and which we believe are required to usher in the supports for the hospitality and entertainment sectors that are incontestably required.”

The Committee recommends that:

·        The Government extend the 9% VAT rate out to 2025 to provide certainty for businesses;

·        The COVID Restrictions Support Scheme (CRSS) be doubled for tourism and hospitality businesses which will show a slow recovery until the end of 2021;

·        The Local Authority Rates Waiver is extended for a full year for tourism and hospitality businesses;

·        The Government establish a hospitality voucher scheme and a new public holiday to stimulate domestic spending in the tourism and hospitality sector;

·        Government reviews licencing laws and modernises these laws and application processes to reduce bureaucracy and to stimulate the night-time economy, and that all additional licencing requirements relating to the hospitality sector, such as the outdoor seating licences, be simplified and moved online;

·        Insurance reform be tackled and expedited on an urgent basis by Government to support businesses in the hospitality and entertainment sectors;

·        The report of Night-Time Economy Taskforce should also be acted upon with urgency when finally published and this should include extended trading hours in line with European neighbours, simplifying the licensing regime and transferring responsibility for licensing from the courts to local authorities, in partnership with An Garda Síochána, and enabling creative spaces, and non-commercial spaces, the flexibility to open through the night;

·        Plans to deliver innovative support schemes for artists, musicians, and those working in the creative industries be expedited as part of the National Economic Plan;

·        The full rate of Pandemic Unemployment Payment is maintained for workers in the entertainment sector until their industry is fully reopened, and to ensure no workers in the sector are reduced to jobseeker status in the interim period;

·        A six-month payment break to be secured for workers and businesses in the hospitality and entertainment sectors to be able to meet mortgage repayments.

Deputy Smyth said: “These recommendations largely relate to Government schemes that have aimed to mitigate some of the impacts of COVID-19 on the hospitality and entertainment sectors, calling for the extension of these schemes so as to better meet the current needs of businesses, employees, and workers. Furthermore, these recommendations call for the review of established mechanisms, and the introduction of new schemes, as a means of compensating workers and businesses in these sectors for their hardships during the pandemic, of granting them more operational flexibility in the emerging period, and of safeguarding future sectoral sustainability.”

Deputy Smyth thanked all those stakeholders who gave submissions and evidence to the Committee for their input, including the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media, other public bodies, and representative groups for the tourism, hospitality and entertainment sectors for their essential contributions.

The Impact of COVID-19 on the Hospitality and Entertainment Sectors report is available on the Oireachtas website.

The Joint Committee on Tourism, Culture, Arts, Sport and Media has 14 Members, nine from the Dáil and five from the Seanad.

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