MEP Kelly urges government to maintain tourism VAT rate of 9%

Sean Kelly MEP (Ireland South) is urging the government to maintain the low tourism VAT rate of 9% to help sustain growth and profitability in the hospitality sector.

“The government introduced two proactive initiatives to benefit the tourism sector – the lower Vat rate of 9% and the unique ‘Gathering’ promotional and events drive. The success of those two plans is clear– the CSO has reported an increase of over 86,000 visitors to Ireland in the first three months of this year, much of which can be attributed to The Gathering which is on-going.

“I have written to the Minister for Transport, Tourism and Sport, Leo Varadkar, and urged him to consider maintaining this lower VAT rate of 9% to help sustain the future of our tourism sector,” Mr Kelly said in Strasbourg today.

The temporary lower 9% VAT rate applies to hotels, restaurants, leisure centres, and other attractions. The initiative is designed to support and protect jobs in the sector, and to help tourism and leisure businesses to lower their cost base and attract more customers.

“I can see the direct benefits of these initiatives in my own constituency of Ireland South. Tourism industry businesses and services are directly benefiting from increased visitor numbers and lower tax rate. This success translates to profitability and sustainability which ultimately means these SMEs can provide more secure employment opportunities and support many local communities,” Mr Kelly, a member of the European Parliament’s Committee on Industry, continued.

Mr Kelly asked Minister Varadkar to consider the “huge potential for job creation the tourism industry holds” and stressed the need to “maintain the momentum generated by the very successful Gathering” by continuing to support the sector with the lower VAT rate.