Galway hoteliers say 9% tourism VAT rate must be retained

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The Irish Hotels Federation (IHF) has today renewed its call on the Government to retain the 9% tourism VAT rate.

The call came in response to latest Business Post/Red C poll, which revealed that 66% of people now believe the current rate for hotels and restaurants should be extended.

IHF Galway Branch Chair Wayne Neilon said that it is very worrying that the government is contemplating an increase when many key tourism markets are experiencing a cost-of-living crisis.

He said that increasing consumer taxes such as tourism VAT is “the last thing we should be doing at this point.”

“People in Ireland and across our overseas markets are already being squeezed by exceptionally high levels of inflation and other pressures on their finances, which means there is a real risk that many will pull back from discretionary spending on holidays and breaks away.”

Recent industry research indicates that 81% of hoteliers are very concerned about the impact a VAT increase would have on their businesses given the very challenging economic headwinds facing the sector over the next 12 months.

“Any increase would have a significant inflationary impact and would damage our tourism competitiveness, with Irish consumers and overseas visitors having to pay the third highest tourism VAT rate in all of Europe,” added Mr Neilon.

“The focus of the Government should be on safeguarding tourism livelihoods and securing the long-term sustainable recovery of our industry. Now is not the time to put tourism recovery at risk by increasing VAT.”