Government to maintain 9pc VAT rate for tourism sector until end 2013 – Varadkar
THE Government is to maintain the lower 9pc VAT rate for the hospitality sector, Minister for Tourism Leo Varadkar said today.
The rate was reduced last year as part of the jobs initiative and applies to a range of services including hotels, restaurants, leisure centres and attractions.
Many in the sector had expressed concern that the cut would end this year.
Mr Varadkar said: "Following recent discussions with the Minister for Finance, I have obtained an assurance that the lower rate of VAT will be maintained during 2013 so that businesses, tour operators and customers alike can plan for the 2013 season knowing that the 9pc rate will apply.
“Initial indications suggest that the policy has worked well and there has been an increase in employment in the sector with prices charged to consumers falling as well.”
The Restaurants Association of Ireland (RAI), and a number of other tourism-related groups, welcomed the decision saying it will allow the sector to grow.
"70pc of restaurants have said the reduction of the VAT rate in 2011 has helped business with 30% directly attributing the VAT reduction to hiring new staff," the RAI said.
Niall Gibbons, Tourism Ireland chief executive, said: "In recent years, perceptions of the value available here, among overseas consumers, have improved; and we know that a recent survey by Hotels.com showed that Dublin hotels are now the least expensive in Europe."