Tourism will need tax breaks if war occurs, says Fine Gael
Party tourism spokesperson Jimmy Deenihan wants Finance Minister Charlie McCreevy to immediately give VAT exemptions to tour operators. He said the 1% hike on the commercial rate of VAT has hit the sector hard and many operators are in financial trouble.
“Most operators had sold holidays when VAT was 12.5% but the Budget changes means they are going to have to absorb much higher costs.
“This is going to hit everyone from B&Bs to hotels and Minister McCreevy will have to offer them an exemption,” said Deputy Deenihan.
The likelihood of a war in Iraq also requires swift action on airport landing charges, deputy Deenihan believes.
“I’m urging the Government to suspend landing charges on flights to try and encourage more people to visit here,” he said.
Deputy Deenihan also feels more money should be provided to market the country in Europe and Britain.
“There should be another big cash injection spent on promotion in Europe because that’s the market that can save us,” he said.
Tourism Minister John O’Donoghue allocated an extra €3m for overseas marketing last year and Tourism Ireland devoted an additional €1.5m for promotion.
Efforts are underway to increase tourism within the country. This market is worth €800m and 3.6 million holidays annually.
Bord Fáilte is beginning a €2.5m Discover Ireland campaign in the coming weeks.
“We are launching a promotion with the theme ‘Make a Break for It’ and we hope people will take more breaks at home,” a spokesperson said.
Aer Lingus also fears a war would hit its profits. Chief executive Willie Walsh said the company will do everything to protect itself in such a situation.
“We have a range of contingency plans and, in the event of a crisis, we will act quickly and decisively,” he said.
If war breaks out in Iraq, it’s believed the company will offer a range of low-price fares. Around 50% of its profits come from transatlantic routes.
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