Minister for finance Paschal O'Donohoe has been warned by tourism minister Brendan Griffin that the tourism industry's reduced VAT rate of 9% is "sacrosanct".

Among fears that the rate will be raised to 13.5% in the next budget, Griffin told TDs and senators present at a Fine Gael parliamentary party gathering in Galway last week that increasing the 9% VAT rate would be a threat to the hospitality sector with Brexit looming, and received applause for his assertion, according to The Business Post.

"City-Tax"

It is understood that Griffin favours the introduction of a European-style "city-tax" to capture revenue from tourists rather that raising the reduced VAT rate. However, despite the fervent response to Griffin's speech, Donohoe would only say that decisions would have to be made.

© 2018 Hospitality Ireland – your source for the latest industry news. Article by Dave Simpson. Click subscribe to sign up for the Hospitality Ireland print edition.