Hospitality sector VAT cut is backed
SLIGO County Council has called on the government to reduce the VAT rate for the tourism and hospitality sector to the lowest possible rate in order to help the industry following the Covid-19 pandemic.
A motion brought forward by the Fine Gael group on the council sought to reduce the rate to 9pc from 13.5pc, but after discussion it was agreed to request that the Minister for Finance be asked to reduce the rate to the lowest possible figure.
Moving the motion, Cllr Thomas Walsh said: “Whilst we are in exceptional times we now need to support our business community more than ever particularly in the area of hospitality. Tourist season which should be well under way by now, St Patrick’s, Easter and Summer breaks, family gatherings, weddings etc. All this sector has been dealing with over the past few weeks are cancellations and re scheduling functions.
“The Hospitality sector is a key component of the Irish economy worth up to €7.6bn and employing 180,000 people. More than 1700 people or 6.7 % of our total workforce here in Sligo works in the accommodation and food service area. In the North-West, particularly here in Sligo, our local economy relies on our tourists and visitors to our county.”
Acknowledging the policies that have been introduced to help the sector in recent weeks, Cllr Walsh said that the ‘Initial Impacts of the Covid-19 Non Ireland’s Labour Market Report’ shows that 28pc of all those receiving the pandemic support payment in Sligo have been working in the accommodation and food sector.
Cllr Walsh concluded: “For the foreseeable, this county will be reliant on its domestic tourism market and therefore we should encourage anyone taking a holiday in 2020 and 2021 to holiday in Sligo.
“In Sligo let us continue to sell our National Heritage, our adventure sports, our wonderful scenery, our bespoke events, our food trail, let it be a holiday in hill walking, fishing, golfing, our surfing. Sligo will re-open for business soon. We must be ready to re-market it. We must be ready to welcome people again.” Cllr Walsh’s Fine Gael colleagues also voiced their support for the motion. However, Independent Cllr Michael Clarke weighed in on the debate by saying that the motion does not go far enough, and suggested that the VAT rate be reduced to 0pc for the first year. He said he could not support a reduction to 9pc. Cllr Marie Casserly agreed with the sentiment expressed by Cllr Clarke. Cathaoirleach, Cllr Tom MacSharry, appealed to the Fine Gael group to reconsider the percentages as specified in the motion. He agreed that the motion was welcome, but argued that it should go a step further.
Cllr Thomas Walsh explained that it was their understanding that it was illegal to have a 0pc VAT rate, as per comments from the Taoiseach on European regulations. The Councill compromised with the wording changed to the ‘ lowest VAT rate possible’, and the motion was agreed.