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Scrap Tourism VAT Rate, Say Irish Trade Unions

by Jason Gorringe,, London

07 September 2017

The Irish Congress of Trade Unions (ICTU) has recommended that the Government remove the temporary VAT reduction for the hospitality sector.

In its pre-Budget submission, the ICTU said that the significant recovery in tourism numbers and activity in the sector since the introduction of the reduced rate means that "the case for retaining this tax cut is very weak."

The rate was lowered from 13.5 percent to nine percent in 2011. It was originally intended to expire at the end of 2013, but was retained as part of the 2014 Budget. It was again kept in place at the last Budget, delivered in October 2016.

The rate applies to the supplies of restaurants, hotels, and tourist attractions, and extends to some printed media.

The ICTU said: "The reduction was estimated to cost EUR2.1bn (USD2.5bn) over four years up to the end of 2015. A conservative estimate of annual revenue loss in 2017 is likely to be well in excess of EUR700m."

Among the ICTU's other tax-related recommendations were:

  • The introduction of a net wealth tax on households with net assets in excess of EUR1m;
  • An increase in the employer Pay Related Social Insurance on incomes in excess of EUR100,000;
  • The gradual withdrawal of the personal tax credit from high income earners;
  • The abolition of the income tax rebate Help to Buy incentive;
  • An increase in the Vacant Site Levy from three percent to six percent; and
  • An increase in the online betting tax, and an increase in the excise on tobacco and tobacco products.

TAGS: tax | value added tax (VAT) | Ireland | tax incentives | tax credits | excise duty | tax rates | social security | tax breaks | tax reform | Trade Union | individual income tax

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