VAT Rate on Hospitality Industry Recommended to Stay at 9% to 2025

The Irish Hotels Federation has welcomed the report published on Wednesday July 21, by the Joint Committee on Tourism, Culture, Arts, Sport and Media, in particular its recommendations in relation to the extension of the tourism VAT rate of 9% to 2025. The report also recommends an extension to the Local Authority waiver and the doubling of the COVID Restrictions Support Scheme (CRSS).  

Tim Fenn, Chief Executive stated: “The certainty over the 9% VAT rate is vitally important. Many hotels are already contracting for international business up to two years out. Our current 9% VAT rate has only been committed to until September 2022. This is causing confusion in our highly competitive international marketplace as we seek to restore international connectivity.  The 9% VAT rate is proven to be the right rate of VAT compared to our European competitors.” 

 Mr. Fenn said that the Committee’s recommendation to extend the Local Authority Rates Waiver for a full year for tourism and hospitality businesses, along with a doubling of the CRSS would help tourism and hospitality businesses to plan for the longer term.  

The tourism and hospitality industry has been disproportionately impacted by government restrictions around this pandemic. Government supports to date have been very welcome and have been a lifeline to many businesses. Tourism will recover, but it will take time, and businesses need greater certainty over costs to ensure competitiveness and to allow them to plan for the years ahead,” said Mr Fenn. 

 Pre-Covid, tourism supported over 270,000 jobs, one in 10 of all Irish jobs, with 70% of these jobs located outside of Dublin. “Hotels and guesthouses, which are an integral part of its infrastructure, are committed to restoring livelihoods as quickly as possible. That requires continued government supports to enable them to recover when there is a meaningful increase in international visitor numbers,” he added. 

The IHF has also welcomed the signing of legislation into law yesterday July 21st that will facilitate the resumption of indoor hospitality. 

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