A BOOST FOR TOURIST TRADE

THE tourism industry was jubilant last night as the VAT rate on hotels and restaurants was kept at the reduced level of 9 per cent.

The rate was cut in summer 2011 on hotels, restaurants and admission prices to amusement parks and visitor days out by a third from 13.5 per cent.

But Minister Michael Noonan issued a warning to hoteliers against hiking prices during special events, in particularly in Dublin.

Irish Hotels Federation chief executive Tim Fenn said keeping the rate low will mean another 40,000 jobs in the industry over the next five years. ‘The 9 per cent VAT rate, in particular, is of enormous importance to the industry, helping to level the playing field for Irish tourism when competing with international destinations,’ he said.

The lower rate of VAT is also credited with creating more than 32,500 new jobs since it started in 2011. There were 7.3million overseas visitors last year, bringing a colossal €6.45billion boost to the economy.

Tourism Minister Paschal Donohoe said: ‘Keeping the lower VAT rate will allow us to continue to encourage more tourists to come to Ireland and help grow jobs in that sector.’

The Restaurants Association of Ireland also welcomed keeping the tourism tax rates low.

RAI chief Adrian Cummins said: ‘Keeping the 9 per cent rate was crucial to not only the sustainability of restaurants and businesses in the tourism sector but also to job creation and the continued growth of our economy.’