The Irish Tourism Industry Confederation (ITIC) has identified in its pre-Budget submission that the industry is entering into a period of international uncertainty, thanks mainly to the external pressures prompted by the UK’s decision to leave the EU. As a result, it is calling on the Government to retain the reduced 9% value-added tax rate for the sector in next month’s budget.
The pre-Budget submission stated: “In terms of taxation and expenditure decisions, Budget 2018 is critically important to the Irish tourism industry.” Official figures state that an estimated 228,600 people work in tourism and hospitality jobs within Ireland and the sector was worth €8.3bn in 2016. Figures from the ITIC estimate that Brexit is likely to cost Irish tourism at least €100m in 2017.
Whilst the tourism VAT rate is in line with its European competitors, with nearly all Eurozone countries (17 of 19) applying VAT rates of 10% or less, Irish tourism actually now returns more revenue to the Exchequer than it did in 2011 when the rate was cut from 13.5%, thanks largely to 56,700 new jobs that have been created and the increase in tourism volume.
This story was originally posted on VAT Life, Quipsounds quarterly newsletter in association with Essentia Global Services. Click here to see the story and more on VAT Life.