LIMERICK politician Richard O’Donoghue has called for a VAT rate of just five per cent for the rural tourism and hospitality sector, with the rate across the country being set at nine per cent.
The Independent Ireland TD and party co-founded hit out that the current rate was restored last summer from nine per cent back to the pre-pandemic figure of 13.5 per cent.
“In the context of Budget 2025, I am calling for varying VAT rates across the country in the hospitality and tourism sector to promote regional balance,” Deputy O’Donoghue declared.
The Limerick TD said that his cross-country call “includes the introduction of a reduced five per cent VAT rate for areas outside Dublin, thereby creating a distinction between the VAT applied in rural areas and the capital, ensuring that rural areas are subject to a VAT rate no greater than five per cent”.
The government’s decision to hike the VAT rate on the sector last year, Deputy O’Donoghue believes, was ill-judged and ill-advised.
“VAT, being a regressive form of taxation, can impact lower-income households, especially when it comes to discretionary goods like hospitality and tourism,” he went on to say.
“Excluding Denmark, Ireland’s VAT rate of 13.5 per cent for the tourism and hospitality sector is the highest in Europe.”
Deputy O’Donoghue told the Limerick Post that his aim now, in furthering his VAT ambitions, is to bring a Private Members Motion on the issue before the Dáil, for elected representatives to discuss openly.
