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Costs in Ireland’s tourism and hospitality sectors will increase 

Dublin: Spending in Ireland’s tourism and hospitality sectors is set to increase significantly again.

The government reintroduced the 9% VAT rate to 13.5%, which had been reduced during the pandemic in the tourism, hospitality, and other sectors.

Even at the last minute, the government was not ready to accept the request of the business organisations to continue the lower rates.

The rate was reduced from 13.5% to 9% in November 2020. The government was ready to extend it in May last year and in February this year.

However, the VAT rate has been restored after it was determined that there is no economic case to extend the lower benefit. The exchequer is estimated to have lost €300 million in tax revenue over the last two years as a result of concessions in the tourism and hospitality sectors.

IBEC has advocated for a lower VAT rate, claiming that the benefit has been critical in sustaining businesses and protecting a significant number of the economy’s more than 300,000 jobs.

Organisations representing hairdressers and restaurant owners had also warned that the rate hike would have a negative impact on some businesses, but the government refused to accept any of them.

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