In early October the Irish Government confirmed that their current reduced rate of Tourism VAT would be maintained at 9%. This achievement was a result of a well fought campaign by the Irish hospitality industry. Supporting this was the latest key research, commissioned by Failte Ireland and carried out by Deloitte, which demonstrated the strong economic evidence for the maintenance of a reduced VAT rate.
This report allowed Leo Varadkar, the Irish Minister for Tourism, to write ahead of the budget to the Minister of Finance that it had been one of the most successful job-creation measures implemented to date. He added that “It has helped to drive an increase in overseas tourist numbers and revenue due to an improved perception for value for money in Ireland which has in turn helped to create between 10,000 and 25,000 new jobs depending on which study you provide.”
The fact that this study has demonstrated these benefits is of importance as Cut Tourism VAT engages with the British Government. At the beginning, our Campaign commissioned a Deloitte/Tourism Respect report to assess the impact of bringing in a reduced rate for the United Kingdom. The findings were clear: an extra £2.6 billion revenue for HM Treasury over 10 years and the creation of an additional 80,000 jobs.
The high rate of UK Tourism VAT is severely hurting the competitiveness of our industry. In October we spoke at the Hospitality Exchange in Northern Ireland, a part of the UK uniquely affected due to its shared land border with the Republic. We heard of the great potential Northern Ireland has to grow even further as a tourism destination and – like our counterparts in the Republic of Ireland – our industry must continue to keep pushing the clear research findings showing how lower Tourism VAT is in the clear interest of the UK economy.