Parlon: Give tourism's tax break to construction industry

The Construction Industry Federation is calling on the Government to remove the low VAT rate from the tourism and services sector and pass it on to the construction industry.

The group argue that by transferring the rate cut to them it could help create more jobs and activity in the sector.

Reports have suggested that the move is part of the measures being considered by the Finance Minister Michael Noonan in the upcoming Budget.

"Reducing the VAT rate for the construction sector makes sense on many different levels," said CIF director general Tom Parlon.

"The Government has realized the quickest way to boost the employment situation is to get the construction sector working.

"To achieve that we will need to see the private sector investing in construction activity again and the best way of encouraging that activity is to reduce the construction VAT rate.

"The restaurant and hospitality sector should be applauded for how they have managed their VAT rate reduction. It has an obvious beneficial impact on the turnover of the sector and on creating jobs.

"However that rate was introduced for a two-year period to help tide the sector over a difficult period and it has achieved that goal. Given how much it is costing the Exchequer, with it estimated at approximately €350m per year this reduction should now be taken off the menu by the Government.

"The restaurant and hospitality sector are thriving, they don’t need the assistance anymore. If this country wants to create a lot more jobs then the construction sector offers a lot more scope for growth.

"We have seen what the VAT reduction has done for the restaurant and hospitality sector and we think it could have a similar impact on the construction sector if it was introduced on a temporary basis.

"Ultimately this is about generating increased economic activity and jobs. The Government must ask itself, which would have a stronger impact – a reduction in construction VAT or the continuation of the restaurant VAT rate?"