OUTRAGE AT VAT HIKE IN SERVICE INDUSTRY

Hotel boss slams return of 13.5% rate

A HOTEL chief blasted the Government for plans to restore the higher VAT rate for the service industry.

Dalata chief Pat Mccann said the report, in which it is claimed the current low tax figure of 9.5% is costing the State dearly, is complete nonsense.

He added he was “spitting blood” over the idea of another increase after the government already made a number of hikes in recent years.

His comments came after reports the Government planned to hike the hospitality VAT to its previous figure of 13.5%, as the finance department said it has already cost the country €2.7billion.

However, Mr Mccann told the Sunday Business Post: “This daft notion that somehow the Exchequer suffered as a result of the reduction is ridiculous. Absolutely ridiculous.”

The rate was initially brought down to allow businesses in the sector sustain themselves.

However, the Government recently stated big businesses are increasing their costs despite the low VAT rate, cashing in on the chance to make money.

They especially targeted the hotel sector, in which the average cost of a room in the capital is more than €100 per night.

And although the current VAT rate affects food, tourism and hotel sectors, it was suggested the increase would only target services who sell accommodation. The relief rate was rumoured to be scrapped in last year’s Budget but the decision was made not to raise it.

Mr Mccann lambasted the latest findings, saying: “I suppose it is a kind of a pathetic report quite frankly. It’s a nonsensical argument.”

Dalata is a veteran hotel operator, owning a chain of brands across Ireland including Clayton and Maldron hotels.

Amount of cash finance department claims VAT figure cost government