Minister Noonan says it will "act as a buffer for the weakness in sterling"...
Minister for Finance Michael Noonan has confirmed that the reduced 9% VAT rate enjoyed by the tourism industry will be retained as part of his Budget 2017 measures.
While he noted that the sector has "recovered well" enough that some might feel this is unnecessary, he stated that it was "prudent" to retain the reduced rate.
He said: "This will act as a buffer for the weakness in sterling."
Eoghan O'Mara Walsh, chief executive of the Irish Tourist Industry Confederation, welcomed the news:
"It's good news for the tourism sector. It's a very important policy. It's allowed the tourism sector to grow and there's a lot more jobs within the sector that we think can be realised, but only if the right policies, such as the VAT rate, are retained."
Chief executive of the Restaurants Association of Ireland, Adrian Cummins was similarly upbeat, saying:
"Very positive for our industry, very positive for restaurant owners and tourism. So I think it was a good day for the restaurant industry as a part of this Budget."
The Economic and Social Research Institute (ESRI) had questioned whether the Irish tourism and hospitality industry still needed its current VAT reduction.
The CSO revealed that Irish tourism has seen growth in both the number of people visiting and the amount of money they spend here for the first six months of 2016.
Total overseas visitors grew by 11% to 3.9 million – representing almost 400,000 additional visitors – in the first half.
Revenue from overseas visitors increased 9% to €1.93bn – an additional €165m for the Irish economy.
In August, the Restaurants Association of Ireland called on the Government to freeze VAT in the hospitality sector for five years, arguing that more than 45,000 jobs have been created since the 9% rate was introduced in 2011.