Tipp Hoteliers Express Deep Concern On Impact Of Tourism VAT Increase

Tipperary hoteliers today expressed deep concern about the effect of a potential €400m increase in VAT on Irish consumers and overseas visitors.

The increase is currently under consideration by the Government as a temporary reduction in VAT for the hospitality and services sector is due to expire on March 1^st.

The 9% rate for certain sectors was introduced in Budget 2021 effective from 1 November 2020 – it has been extended since then and is estimated to have cost the exchequer €902M.

Government Ministers held discussions with the Hospitality sector yesterday and a decision is now likely at Thursday’s Cabinet Meeting.  Hoteliers say increasing consumer taxes is the last thing the country needs given the additional inflationary impact this would have on domestic tourism while also making Ireland less competitive in attracting overseas visitors.

The hospitality sector is very concerned about the economic position for 2023 with tourism numbers expected to be down on 2022 due to the cost of living crisis and tourism market not having the pent up demand due to the pandemic that was evident last year.

The proposed VAT increase will affect a wide range of products and services as the 9% rate currently applies to  restaurant supplies, tourist accommodation, cinemas, theatres, museums, historic houses, open farms, amusement parks, and hairdressing, as well as certain printed matter such as brochures, leaflets, programmes and catalogues