Shock at ‘brutal’ VAT hike for tourist sector
THERE are fears for hundreds of jobs in Kerry as a result of the Budget decision to hike the special VAT rate for tourism and hospitality businesses from nine per cent to 13.5 per cent.
There are currently some 5,300 directly employed in Kerry’s hospitality sector with 2,300 of these jobs created since the special nine per cent VAT rate was introduced in 2011.
According to the Restaurants Association of Ireland (RAI), as many as 800 of these jobs are now at risk.
If the impact of the VAT hike is as severe as Kerry hoteliers, restaurateurs and publicans predict, it could have hugely damaging consequences for the economy of the entire county.
Kerry County Council’s ‘Economic and Community Plan 2016-2021’ revealed that Kerry is more dependent on tourism than any other county with the tourist sector, directly and indirectly, supporting one in five jobs in the county.
Chair of the Irish Hotels Federation (IHF) Kerry branch, Niamh O’Shea, said the scale of the hike had taken many members by surprise.
“It’s disastrous and its a awful jolt for our members. The whole industry will be in shock after this and it will impact on everyone including hotels, restaurants and bars,” said Ms O’Shea, who is General Manager of the Killarney Park Hotel.
“I have no doubt that this will cost jobs in Kerry,” continued Ms O’Shea.
“A lot of businesses are just getting back on their feet and it’s a shock to have the rug pulled out from under us so brutally,” she said.
Members of the Kerry IHF are expected to hold emergency meetings in the coming days.
The RAI has slammed the decision which it called a “black day for Irish Tourism” that will cost jobs and which will hit rural counties especially hard.
The VFI have called the hike a “hammer blow” that will “cost jobs and kill growth in areas where the recovery is week.
Tralee Chamber Alliance has also hit out at the “reckless” decision which Managing Consultant Ken Tobin said was certain to cost jobs in Kerry.
While the IHF, RAI and VFI all focussed their attacks on Shane Ross Kerry TD Michael Healy-Rae hit out at his constituency rival in Kerry, the Junior Minister for Tourism and Sport, Brendan Griffin.
“It seems like our Minister has not made much of an effort to save the nine per cent VAT rate, it just goes to show having a Minister for Tourism in Kerry clearly doesn’t mean a lot,” he said.
Deputy Healy-Rae’s pointed attack on Minister Griffin was not echoed by Kerry hoteliers.
Niamh O’Shea of the IHF said that all five of Kerry’s TDs had been 100 per cent supportive of the campaign to maintain the nine per cent rate.
“They all backed us, every one of them, and they couldn’t have done more,” she said.
Minister Griffin said he fought “tooth and nail” to keep the nine per cent rate but when it became apparent he could not he set about ensuring the best alternative for the industry.
Kerry IHF Chair Niamh O’Shea