Sinn Féin is pushing to increase the VAT rate on hotel beds
Fianna Fáil tourism spokesperson Robert Troy TD says the alternative budget proposals put forward by Sinn Féin represent a direct attack on Ireland’s tourism industry.
As part of Sinn Féin's "alternative budget", the party suggests ending the reduced 9% VAT rate on hotel rooms, but maintaining it for bars and restaurants.
"This is a dangerous proposal which will have a detrimental impact on the tourism industry", Troy says. "If implemented it would result in a drop in the number of tourists travelling to Ireland, which will inevitably lead to job losses.
"The tourism industry is still in a fragile state due to the threats associated with Brexit, a sharp fall in Sterling and an uncertain international economy. The last thing we need to do now is to implement a measure which will only serve to increase uncertainty in the tourism industry."
However, finance officials previously told Minister for Finance Michael Noonan in June that the VAT rate has "done its job"and that scrapping it would raise €640 million.
In briefing documents for the minister, they added: "The general recovery of the economy and increasing prices in the sector raises questions about its future."
If the VAT rate for the hospitality industry returned to 13.5pc it "would result in increased revenues of some €640m".
The news comes as the pound hit a three-year low against the euro yesterday, piling further pressure on the tourism industry as Irish destinations become more expensive to UK holidaymakers.
Sinn Féin also proposed abolishing water charges and property tax, subsidising childcare and raising taxes on those earning over €100,000. The budget proposal also mentions “backing rural Ireland” by creating jobs, restoring the farm assist payment and improving staffing of rural schools.