Taoiseach Leo Varadkar has said that withdrawing the hospitality industry's special 9% VAT rate in the upcoming budget "could actually do damage" in light of Brexit.
As reported by The Irish Times, Varadkar asserted on RTÉ's Morning Ireland last week, "It has been very successful in helping us to re-grow our tourism and hospitality industry. It probably isn't needed in the way it was back in 2011 or 2012, but we do need to be cautious of withdrawing this as well because we are starting to see a fall in the number of visitors in particular from the UK."
It had been speculated during the summer that pressure was building within the Department of Finance to phase out the special VAT rate, however Minister for Finance Paschal Donohoe moved to allay the fears of Irish hospitality businesses in July by signalling that the rate will remain at 9%.
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Commenting on the importance of the keeping the rate at 9%, the Irish Hotels Federation issued a statement asserting, "The tourism recovery cannot be taken for granted. Visitors from Britain are down 6.4% so far this year, with regional tourism the worst affected. Given the negative impact Brexit is already having on tourism, it is vital that the 9% VAT rate remains at its current level."