With an increase in Value Added Tax for those working in the hospitality and tourism sector imminent in January, Clare councillors are demanding a strategy be implemented to alleviate the consequences of the hike.
In October’s Budget, Minister for Finance, Pascal Donohue raised VAT for the tourism and hospitality industries from 9% to 13.5%. At the time, he stated a review of the 9% VAT rate had found that the measure had “done its job”, the increase will generate €466m in 2019. To deal with the resulting challenges, the Dublin Central TD allocated €35m to the Department of Transport, Tourism and Sport to provide more targeted supports to the sector.
At Friday’s adjourned monthly meeting of Clare County Council, a joint motion from councillors, Pat McMahon, PJ Ryan and John Crowe requested “the Government to put in place a strategy to alleviate the dire consequences of the 50% VAT hike on the hospitality sector and other affected sectors.”
“Our worst fears were confirmed with the VAT increase. Ireland’s tourism VAT rate was in line with 19 other European countries. It is extremely hard to create jobs in rural Ireland and to sustain them. No other industry comes near in creating jobs in our own county, the Cliffs of Moher, Loop Head, the Wild Atlantic Way, Bunratty are all providing all year round jobs through hard shoulder. From the 1st of January this increase in VAT is going to have a major impact on those jobs. This VAT rate increase covers hospitality and hairdressing. We all know Brexit is a changing tide everyday, the IBC have said if the worst aspect of Brexit comes through we could lose €160m. It is vitally important that we as a Council try and sustain those jobs in rural Ireland”, Cllr McMahon commented.
Independent councillor, PJ Ryan stated, “Minister Ross was looking to increase VAT at 15%, he looked at the take Dublin hotels have but he forgot to look at the Bunrattys, Lahinchs and Kilkees, this is a big injustice. At the end of the day we have to battle for the rural areas and the rural hotels”.
Fine Gael’s John Crowe cautioned, “It’s going to do massive damage to rural Ireland”. He continued, “There is no comparison when you look at rural Clare and Dublin. These places were giving young people jobs which helped to put them through college. There is an awful bigger picture than throwing 13% VAT on it. The Minister should be contacted and stated the figures and facts, there’s another world outside Dublin”.
“It is impossible to get a room now in Dublin because of the so many events taking place. Many of our hotels are operating at minimum capacity, the West of Ireland is heavily dependent on tourism”, stated Fianna Fáil’s Richard Nagle. His party colleague, Cllr Clare Colleran Molloy referenced a call she received from an Ennis businessman who queried why the increase could not be done in a phased manner. Cllr Pat Hayes agreed that those currently working in the affected industries were “under severe pressure. The cost of doing business has hugely increased in the last few years”.
Cllr Pat Daly criticised the performance of Minister for Tourism, Shane Ross. “The average rate in Europe is 10%. Minister Ross is destroying the West of Ireland, he has attacked pubs and now this. The man shouldn’t be there”.
Ennis councillor, Johnny Flynn suggested the ideas be marked for the attention of the Minister for Rural and Community Development, Michael Ring. Cathaoirleach of Clare County Council, Michael Begley in concluding the discussion, indicated “there is scope for our Oireachtas members to work on this”.
