Lower tourism VAT to stay until end of 2013

THE REDUCED 9 per cent VAT rate for services in the tourism sector is to continue into 2013, although visitor numbers dropped in the first three months of this year.

Minister for Tourism Leo Varadkar told the Dáil that the Minister for Finance had said the “lower rate of VAT will be maintained throughout 2013 so that businesses, tour operators and customers alike can continue with their planning for the 2013 season with the assurance that the 9 per cent rate will apply”.

Mr Varadkar was “pleased to see that overseas visitor numbers increased by 6 per cent in 2011.

“While there has been a marginal reduction in overseas visits in the first three months of 2012, indications from industry representative groups are positive.”

Inquiries and advance bookings for the coming months are ahead of those at the same time last year.

The Minister said Tourism Ireland had set a target for a 4.5 per cent increase in overseas visitors this year. He told Fine Gael Donegal South West TD Joe McHugh the lower VAT rate would be important during 2013, the year of The Gathering tourism event, when the Government hopes to bring in an extra 325,000 visitors.

Mr Varadkar said the maintenance of the lower VAT rate, particularly given the pressure on public finances and the €145 million in tourism supports, showed the importance the Government attached to the industry which employs 180,000 people, many of them in rural areas.