Service Industry VAT rate retained at 9% until end of 2013


Fine Gael TD for Cork South West, Jim Daly, has welcomed the Government’s announcement today that the temporary 9% lower VAT rate which applies across the tourism sector, will be extended into 2013. Leo Varadkar TD, Minister for Tourism, made the announcement in the Dáil today, when responding to questioning on the issue.

Responding to the Minister’s announcement, Deputy Daly said: ‘The Government’s decision to extend the temporary lower 9% VAT rate on tourism into 2013 is very positive news for the tourism industry. This extension of the lower rate will enable the industry to plan and to market for next year in the knowledge that Ireland will be able to offer lower-cost tourism options to tourists.’

“Reducing the lower VAT was one of the first acts taken by this Government when the Jobs Initiative was announced in May 2011. This measure had the effect of creating 6,000 new jobs in Irish accommodation and leisure last year. A 6% increase in overseas visitors to Ireland in 2011 was another direct result of the reduction.

“The reduced lower rate of VAT is worth €2,250 for every €50,000 turnover within the tourism sector, and that is a significant boost in an industry which operates with tight margins.

“It is a priority for this Government to reduce costs within the tourism industry, and the industry has seen evidence of this in the last 12 months. Thankfully, Ireland is no longer regarded as a rip-off tourist destination. Today’s news is another step in the right direction.”