The Government will keep the 9% VAT rate for hospitality and tourism businesses intact until August.
The move forms part of the Government’s overall €1.2bn relief package aimed at tackling the inflation/cost of living crisis for households and businesses.
As part of a wide-reaching run-down of measures, Taoiseach Leo Varadkar said: “The special reduced 9% VAT rate for hospitality businesses will be extended from March to August.“
The VAT rate for tourism and hospitality – which directly affects around 20,000 businesses – was intended to return to 13.5% at the end of this month.
The Irish Tourism Industry Federation (ITIC) had warned that increasing the rate would have been very damaging, saying an increase would be “inflationary, threaten jobs and be self-inflicted folly”.
Hoteliers have welcomed the Government’s decision to extend the 9% tourism VAT rate and reform the energy support scheme for businesses.
Denyse Campbell, President of the Irish Hotels Federation (IHF), said that the measures announced now give tourism businesses greater certainty as they grapple with the impact of the cost-of-living crisis on Irish consumers and key overseas markets.
“Today’s announcement is a clear recognition by the Government of the challenges facing tourism and hospitality, Ireland’s largest indigenous employer which currently supports over 250,000 livelihoods. It will go a long way in helping to sustain the recovery of our industry at a time when businesses and consumers are facing significant economic and financial headwinds.”
“A vibrant tourism industry is one of the most effective ways to spread employment opportunities and prosperity throughout the entire country. That is why the decision to extend the 9% VAT rate is so critical for communities and regions that rely on tourism as a major employer and driver of economic activity.”
