The Irish Hotels Federation (IHF) has warned that the government’s decision to increase consumer taxes on Irish hospitality and tourism is very regrettable and will result in Ireland having the third highest tourism VAT rate in all of Europe.
Denyse Campbell, the IHF president, said the move seriously undermines Ireland’s ability to compete internationally for visitors and comes at a time when "hard-pressed Irish consumers" are already under financial stress with persistent inflation and higher mortgage interest rates.
'Major Concern'
“Increasing tourism VAT to 13.5% will ultimately have an inflationary impact, which is a major concern given the potential implications for people’s spending decisions," said Campbell.
"It is a serious blow for our sector, including hotels and guesthouses which have experienced enormous increases in the cost of doing business."
"In particular, rural and regional businesses outside the tourism hotspots will be hit hardest as will those businesses that rely heavily on food and beverage sales with very tight margins.”
'220,000 Livelihoods'
Campbell noted that the tourism sector is now Ireland’s largest indigenous employer supporting over 220,000 livelihoods and that the decision to increase tourism VAT, will affect not only tourism businesses, but also economic activity in communities and regions.
“Time and time again, we hear about the need for Ireland to create a more balanced economy that supports indigenous sectors and a greater spread of investment throughout the country," said Campbell.
"One of the best ways to do this is by creating the right environment to support sustainable growth in hospitality and tourism, our largest indigenous employer. Increasing taxes on holidaymakers and Irish consumers is the last thing we should be doing.”
