Dáil Éireann Debate, Tuesday - 4 April 2017
52. Deputy Robert Troy asked the Minister for Finance if he will maintain the hospitality industry's 9% VAT rate further to comments by the Minister for Transport, Tourism and Sport at the tourism awards; and if he will make a statement on the matter. [14235/17]
Amharc ar fhreagraAs part of the Government's Job Initiative in 2011, I introduced a temporary second reduced VAT rate of 9% in respect of tourism related services, including hotel and holiday accommodation; various entertainment services; the use of sporting facilities; hairdressing services; and various printed matter. This measure was aimed at boosting tourism and the creation of additional jobs in that sector. The 9% rate was introduced from 1 July 2011 and was due to expire on 31 December 2013.
In Budget 2014, I decided to retain the 9% rate to support the increased number of jobs already in place and accelerate the creation of new jobs. The rate was further retained in Budget 2015 in light of the job growth in the tourism sector. However, it was incumbent on the industry to ensure that this VAT relief continued to be passed through fully to the consumer, and that if prices rose any further the case for retaining the 9% rate would diminish.
In Budget 2017, in light of Brexit, I considered it would be prudent to retain the 9% reduced VAT rate into 2017. I stated that it would act as a buffer for the sector against the weakness in sterling which increases the cost of holidaying in Ireland for British tourists.
In addition, the Deputy will be aware that the Programme for a Partnership Government, published in May 2016, made a commitment to work towards achieving the tourism policy goals set for 2025 through specific measures including the retention of the 9% VAT rate on tourism related services, but this itself is dependent on prices remaining competitive in the sector.
