“Increasing taxes on holidaymakers and Irish consumers is the last thing we should be doing as a country” – Denyse Campbell, IHF President
The Government’s decision to increase consumer taxes on Irish hospitality and tourism is very regrettable and will result in Ireland having the third highest tourism VAT rate in all of Europe. Irish Hotels Federation (IHF) President Denyse Campbell said: “The move seriously undermines Ireland’s ability to compete internationally for visitors and comes at a time when hard-pressed Irish consumers are already under financial stress with persistent inflation and soaring mortgage interest rates.”
“Increasing tourism VAT to 13.5% will ultimately have an inflationary impact, which is a major concern given the potential implications for people’s spending decisions. It is a serious blow for our sector, including hotels and guesthouses which have experienced enormous increases in the cost of doing business. In particular, rural and regional businesses outside the tourism hotspots will be hit hardest as will those businesses that rely heavily on food and beverage sales with very tight margins.”
Ms Campbell acknowledged the vital support provided by the Government since the 9% VAT rate was originally introduced in 2011. “The Government recognised our tourism industry’s ability to deliver on jobs and economic prosperity across the country and, thanks to supports provided, we are now Ireland’s largest indigenous employer supporting over 220,000 livelihoods. This decision to increase tourism VAT is therefore a significant step backwards, not only for tourism businesses but for the communities and regions that rely on our industry as a major driver of economic activity.
“In light of the vital role tourism plays within the Irish economy, the question we need to ask as a country is why should Ireland, as an island destination, now have the 3rd highest tourism VAT rate in all of Europe?” says Ms Campbell.
“Time and time again, we hear about the need for Ireland to create a more balanced economy that supports indigenous sectors and a greater spread of investment throughout the country. One of the best ways to do this is by creating the right environment to support sustainable growth in hospitality and tourism, our largest indigenous employer. Increasing taxes on holidaymakers and Irish consumers is the last thing we should be doing.”
