General Industry

Fancy That! VAT Rate Remains

By Publications Checkout
Fancy That! VAT Rate Remains

The 2015 budget has made for interesting reading for the hospitality industry, with the big wins being the retention of the nine-per-cent VAT rate – a huge victory for the ardent campaigners of recent weeks throughout the sector – and the incentives for microbreweries in Ireland, an area of our industry going through monumental growth.

In his budget announcement, Finance Minister Michael Noonan claimed the VAT decision by his government brought in has been a success and there are now an extra 23,000 employed in the sector since mid-2011.

Nooonan stated: "I have said on many occasions that SMEs are the lifeblood of our economy and play a crucial role in economic and employment growth. This Government has introduced a range of initiatives to support the SME sector to grow and create jobs."

The Irish Hotels Federation (IHF) was quick to welcome VAT decision. Stephen McNally, president of the IHF, hailed the measure as one of the most successful job creation initiatives in modern times:

“Today’s budget is very positive for the many thousands of tourism businesses throughout the country and is an important recognition of the potential of Irish tourism to continue delivering much-needed jobs growth,” says Mr McNally.


“Thanks to a number of pro-tourism initiatives, the industry is on course to create a further 40,000 jobs by the end of the decade,” says Mr McNally. “The 9% VAT rate, in particular, is of enormous importance to the industry, helping to level the playing field for tourism businesses when competing with international destinations for visitors. This will continue to have benefits for the local economy, particularly in rural regions.”

McNally welcomed the Government’s commitment to capital investment next year in projects such as the Dubline Heritage Trail, the Kilkenny Medieval Mile and Killarney House. He also welcomed the commitment to progress work on the Wild Atlantic Way, the new South and East branding proposition and the Grow Dublin Alliance – initiatives which will give holidaymakers new and compelling reasons to visit Ireland.

Adrian Cummins, chief executive of the Restaurants Association of Ireland, said that, “In our Pre-Budget Submission, we set out objectives that we wanted met, namely the retention of VAT at 9% into 2015 which has been guaranteed. VAT at 9% into 2015 is crucial, not only to the sustainability of restaurants and businesses in the tourism sector, but also to job creation and regrowth for our economy.” 

According to the IHF the tourism industry as a whole now supports almost 200,000 jobs - equivalent to 11 per cent of total employment in the country, some 54,000 of which are in the hotels sector across 812 hotels and 235 guesthouses.