A TAX cut could raise real wages while keeping labour costs low, the Irish Tourist Industry Confederation argued yesterday. It also warned that travellers were likely to pay more per ticket should the Government implement the EU decision to abolish duty free shops.
The ITIC said total taxes generated from foreign and domestic tourists totalled £1.1 billion a year.
"Tourism's contribution to GNP has risen from 4.8 per cent to 6.5 per cent since 1986 at a time when the growth rate itself was accelerating rapidly," said the ITIC chairman, Mr Eamonn McKeon.
The industry's ability to create growth would be shaped by four factors domestic competitiveness, competitive fares, improved service and investment in marketing and development.
"Budgetary policies on the taxation of labour income should be used to hold down rates of gross pay while delivering reasonable increases in real income," Mr McKeon said.
If duty free shops were abolished, as the European Commission has decided, "fares will be forced up, service frequency is likely to be reduced and that will be a major threat to the national objectives for increasing jobs through tourism".