Minister: No plans to hike 9% Vat rate

Changing the special 9% Vat rate for the hospitality sector would be the worst possible thing to do right now in light of Brexit, according to minister of state for tourism and sport Brendan Griffin.

Brendan Griffin TD

He was asked yesterday if the special rate, which was introduced in 2011, would be changed in Budget 2018, due to be revealed next month.

“I think we have seen it has more than paid for itself over the years and it continues to pay for itself,” said Mr Griffin. “So there is an adage: ‘If it ain’t broke, why fix it?’ And that would be my view on it.

“Certainly I don’t see a need at the moment for changing it and, if anything, it would be the worst possible thing to do at the worst possible time.”

Mr Griffin was speaking at the launch of Fáilte Ireland’s Get Brexit Ready programme, a one-stop shop that allows businesses to self-assess their level of exposure and offers a range of interventions to match specific needs.

Fáilte Ireland chief executive Paul Kelly described the impact that Brexit has already had on Irish tourism in 2017, citing Britain as a very important market.

“Tourism is very big business for Ireland,” he said. “This year, we are going to generate over €8bn in economic revenue to the country. It’s going to support almost a quarter of a million jobs and going to generate about €2bn in exchequer revenue.

“One of the most important markets in this area is the UK and the impact of both Brexit and the sterling differential in the UK, so, therefore, it has a big impact and it is important to us.

“The drop in the UK visitors we’re seeing is primarily as a result of the sterling differential. Overall, our visitor numbers from Britain are down 6% this year. For holidaymakers, it’s down 9%.

“Over an annual period that will equate to 300,000 less visitors from Britain, which will equate to a revenue loss of €88m and when we transfer that into a jobs number, that’s about 1,900 less jobs in tourism that we would have had, had we retained the same level of business from Britain as we had last year.”

Mr Kelly said it is a very real and significant issue “in terms of less visitors from our closest and biggest market”.

Paul Keeley, Fáilte Ireland’s director of business development, said there is a “fog” when it comes to Brexit’s effect so far.

“One of the things that has struck us is that actually, it’s very much a fog,” said Mr Keeley. “For all of the commentary, for all of the speculation, the reality is there is no sense of what the final negotiated solution looks like. There is no sense, therefore, of how that is going to impact the broader Irish economy.”

However, he said the “fog has lifted” when it comes to individual businesses.

“The one thing that has become clear, it seems to us, over the first six or seven months of this year, is the fog has lifted when it pertains to the individual firm,” said Mr Keeley.

“We are clear at this point in time about how all of this stuff is coming out of the operational wash for our clients around the country.”

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