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Irish Hoteliers Call For Extended VAT Concession

09 July 2013   (0 Comments)
Posted by: Author: Amanda Banks
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Author: Amanda Banks

The Irish Hotels Federation (IHF) has called on the Irish Government to extend the concessionary value-added tax (VAT) rate introduced for the sector in July 2011, fearing that the removal of the tourism incentive at the end of the year will lead to the closure of many struggling hotels and other businesses dependent on the tourist trade.

The concessionary 9 percent rate, lowered from 13.5 percent in July 2011, covers restaurants, hotels and tourist attractions, including cinemas, theaters, sporting events, and also some printed media.

International visitor numbers jumped 8.1 percent last quarter as a result of a campaign by the Government to entice international visitors to the island.

However, Michael Vaughan, the President of the IHF highlighted that rural hotels in particular are continuing to suffer from low demand, and despite the increase in arrivals, consumer spending has fallen this year.

Urging the Government to extend the measure, Vaughan said: "Irish tourism is very dependent on the domestic market with holidaymakers from the island of Ireland making up to 70 percent of overall business in the hotels sector. This is even more pronounced in rural areas, where business from the domestic economy can account for up to 85 percent of bed-nights - making the sector extremely sensitive to consumer demand at home."

"The Government's decision to reduce tourism VAT to 9 percent has provided a vital stimulus for hotels and guesthouses and acted as a key competitive advantage when marking Ireland as a tourism destination abroad."

"It's now of the utmost importance that the Governments provides greater certainty around the retention of the tourism VAT into 2014 to support struggling domestic demand, which is by far the largest source of revenue for many rural hotels."



Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

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