Tourists to be hit with €10 ‘bed tax’
Dublin levy offsets 9% VAT rate
VISITORS to Dublin could be hit with a €10 “bed tax” in next week’s Budget.
The levy could be a way for the Government to get around having to scrap the special 9% VAT rate for the tourism sector.
It was cut from 13.5% in 2011 to help boost the industry and keep people in work.
The sector has boomed since then with an estimated 45,000 extra staff.
However, there was speculation the lower rate would end as the industry is in rude health at present.
But the campaign to maintain the level has been successful and other measures will be introduced to make up the €200million difference between tax take and VAT receipts.
The Dublin bed tax would be set at 4.5% and with prices averaging at €200 a night, that would mean an extra €10 on the bill.
It’s thought it could generate around €60million a year for the public purse but much more if the tax was extended to Cork, Limerick or Galway.
The next measure that would be used to balance out the loss would be to divert some of the carbon tax increase. It’s thought €60million could be siphoned off to offset tourism’s VAT rate.
But it is not expected that tourism will get off scot-free.
A small proposed increase of 1% in the tourism special tax up to 10% could raise at least €100million, giving more than €200million in total.
An increase of 2% up to 11% is also being considered.
However, the Independent Alliance of ministers led by Shane Ross oppose hiking the special VAT rate.
Its retention was included in commitments given to the Alliance in its government agreement.
A Government source said there has been “determined lobbying from Mr Ross in particular on this”.
There’s been determined lobbying by Shane Ross on keeping special rate
GOVERNMENT SOURCE
YESTERDAY