Vat rate at 9% retained for tourism sector to keep Ireland competitive
50,000 new jobs to be created by tourism industry if right policies pursued
The Irish Tourist Industry Confederation (ITIC) has today welcomed Budget 2017 as announced by Ministers Michael Noonan and Paschal Donohoe. In particular the retention of the Vat rate for tourism services at 9% allows Ireland to remain competitive in this key period of post-Brexit uncertainty.
Chairman of ITIC Paul Gallagher said “17 of the 19 euro-zone countries have tourism Vat rates of 10% or less so the tourism Vat rate in Ireland is right-sized and competitive at the moment. Tourism employs 230,000 people throughout the country and its future growth is predicated on a competitive industry and appropriate government policies”.
Tourism is performing strongly at the moment and is Ireland’s leading indigenous sectoral employer. Decisions taken in Budget 2017 are vital especially for a sector that is likely to be challenged by Brexit.
Already since Brexit the sterling/euro exchange rate has weakened by 15% making holidays to Ireland more expensive for British tourists. Gallagher commented: “UK visitors account for 40% of all international visitors to Ireland and holidays here are now more expensive due to sterling’s weakness – it is therefore vital that the state has not imposed any additional tax burdens on the sector”.
The Irish tourism industry is set to be worth over €7.5 billion to the economy this year with close to 9 million international tourists coming to our shores. ITIC though is keen to stress that tourism cannot be taken for granted.
Eoghan O’Mara Walsh, ITIC Chief Executive, highlighted that the benefits of tourism need to be felt in all parts of the country and not just urban areas or tourism hotspots: “Tourism is a long-term sustainable source of jobs in Ireland. Tourism can’t be offshored or outsourced. It is here to stay and has the potential to provide jobs in all parts of the country.”
Mr O’Mara Walsh expressed disappointment that investment in tourism was not greater in Budget 2017. He said: “Tourism capital investment by the State is very low and not appropriate for a sector that is so important to the economy. Equally marketing budgets by the State for tourism need to be increased significantly or otherwise visitor numbers will suffer in the near future. The tourism industry in Ireland has provided an economic boost to all parts of the country – only last month Center Parcs got the go-ahead for a €232 million holiday park in Longford which will lead to 1,000 permanent jobs for the area. This is the largest single investment in tourism infrastructure by a private company and the State needs to ensure that awareness of Ireland as a holiday destination is at appropriate levels in our key source markets”
ITIC feels that the government policy for tourism – People, Policy & Place; Growing Tourism to 2025 - which sets a target of €5 billion annual spend from 10 million overseas tourists by 2025 is not ambitious enough. Given current performance, this would mean an average annual growth rate of less than 2% to reach the revenue target.
Mr Gallagher said: “Tourism must be ambitious and strive for more. A figure of 4% annual growth should be eminently achievable for tourism – this would equate to €6.2 billion annual expenditure by overseas visitors and crucially would create an additional 50,000 jobs by 2025”. Mr Gallagher continues: “It is time that the figures and targets within the national strategy are formally reviewed with the aim of being more ambitious for the tourism industry.”
For further information contact:
Richard Brophy, Insight Consultants: 086-385 3260