9% VAT debate returns
The debate on the future of the special 9% VAT rate on tourism services, which has been a feature of the run-up to recent Budgets has begun again.
Hoteliers and restaurateurs have warned the Government not to tinker with the rate for their sectors in the upcoming Budget, as new Revenue figures show that reverting to a 13.5pc levy would raise an extra €527m in a full year.
Restaurants Association of Ireland CEO, Adrian Cummins, claimed that it would be a “broken promise” by the Government if the 9% VAT rate reverted to 13.5%, given that there was a commitment to it in the Programme for Government.
The Programme for Government said the reduced VAT rate would be kept “providing services remain competitive”.
Finance Minister Paschal Donohoe has said a report into the 9% rate is almost complete.
“My department has undertaken an economic review of the 9% VAT rate ahead of this year’s Budget and the report is currently in the finalisation stages,” he told former Tánaiste Joan Burton in a written reply to a Dáil question.
Mr Donohoe added: “The Revenue Commissioners’ most recent estimate for reverting the reduced 9% VAT rate back to 13.5% is that it would bring in extra revenue of €527m. I am also advised by the Revenue Commissioners that an estimate for the cost of the measure in 2019 is not yet available.”
The president of the Irish Hotels Federation, Michael Lennon, is “fairly confident” that the rate will be retained.
“I think it’s been very successful so far,” he said. “We need some kind of support and help to open up new attractions, new hotels and new entertainment.”
23 Nov 2016