THE SHANNON branch of the Irish Hotels Federation has warned that rural hospitality and tourism concerns will be hit hardest by the increase in VAT rate to 13.5 per cent announced by Minister Donohoe as part of Budget 2019.
Chair Brian Harrington said the increase is a serious jolt to the tourism industry in Ireland and represents a reckless failure to recognise its economic potential and importance, particularly to rural Ireland.
Mr Harrington urged the Minister to defer the increase until there is clarity over Brexit and to allow existing contracts for group bookings to be completed as prices are already agreed.
“Ireland will now have a higher tourism VAT rate than 26 countries in Europe with which we compete. We are already a very high-cost economy by international standards so it is astonishing that the Government is now imposing additional taxes on tourists and making our country less attractive as a destination.”
“Have no doubt, this increase will hurt tourism across the country but rural businesses will be hit the hardest. Regional businesses will bear the brunt, as about €300m of the €466m in additional taxes will be taken from the rural economy, which has been slower to recover from the economic crisis. This is a devastating blow for the many tourism businesses that struggle to break even or stay open outside the peak season,” he said.
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