Cut in VAT rate in Ireland helps bring in more British tourists
The latest boost in tourism figures in Ireland has come about as a result of a drop in the country's VAT rate for hospitality businesses, from 13.5% to 9%, according to the UK's Cut Tourism VAT campaign.
The improved figures follow the reduction, two years ago, in Ireland's VAT rate for a wide variety of businesses operating in the tourism sector, including cinemas, theatres, sporting facilities and even hairdressers.
Michael Vaughan, president of the Irish Hotels Federation, said the VAT reduction had provided "a vital stimulus" for hotels and guesthouses, creating 10,000 new jobs across the industry.
Meanwhile, the UK's Cut Tourism VAT campaign is calling for similar assistance to ease the pressure on British operators.
Graham Wason, chairman of the campaign, said: "These latest figures clearly show the positive impact that a reduced rate of tourism VAT can have on the economy. While the UK tourism sector struggles under a 20% rate, the Republic of Ireland has taken advantage of a lower rate to increase its visitor numbers and create new jobs.
"Hard-working British families have to look to get the most value from every holiday pound they spend, and the UK's high tourism VAT encourages them to take a break abroad in Ireland, France or elsewhere in Europe."
The discrepancy in the VAT rate between the Republic of Ireland and Northern Ireland is proving to be a particular challenge for hotels north of the border.
Janice Gault, chief executive of the Northern Ireland Hotels Federation, said: "Our hotels offer excellent quality and value for money, but we struggle to compete against hotels on the other side of the border, which charge less than half the UK rate of VAT for visitor accommodation.
"The UK Government needs to recognise the value of our industry and help us compete within Europe."
Led by the British Hospitality Association, the Cut Tourism VAT campaign is seeking a level playing field with countries such as France and Germany, which apply a 7% VAT rate on hotels.
Cut Tourism VAT group calls on regional communities to back campaign >>
