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‘Shane Ross must go’ Hospitality sector furious over VAT hike in #Budget19

Extra.ie logo Extra.ie 11/10/2018 Sean Dunne
a man wearing a suit and tie © Provided by Associated Newspapers (Ireland) Limited, t/a dmg Media Ireland

Shane Ross has been called on to step down as Tourism Minister after the VAT rate for the hospitality sector rose from 9pc to 13.5pc in yesterday’s Budget.

The lower 9pc rate was introduced in 2011 in an attempt to reduce some of the financial stresses on the sector during the recession.

The tourism and hospitality industry reacted with fury to the increase, warning that it could jeopardise thousands of jobs in the sector, particularly in the more vulnerable rural regions.

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The Restaurants Association of Ireland described Budget 2019 as ‘thoughtless’ for the wider tourism and hospitality sector. It called on Mr Ross to stand aside for failing to protect tourism.

a man sitting on a bench © Associated Newspapers (Ireland) Limited, t/a dmg Media Ireland

The group’s CEO, Adrian Cummins, said: ‘The Restaurants Association is asking the Minister for Transport and Tourism Shane Ross to consider his role, particularly for Tourism, in light of his failure to protect the 9pc VAT.

‘Minister Ross has consistently failed to protect tourism at the Cabinet table and should step aside.’ Speaking to Extra.ie, Sallyanne Clarke, who owns L’Écrivain restaurant in Dublin, said the VAT rise will have a ‘crippling effect’ on some businesses.

‘It’s been a tough few years and people were getting back on their feet, but this is a devastating blow to many,’ she said. ‘We could have handled a raise to 11pc, to which we thought it would go to, but 13.5pc will cripple some businesses.’

Ms Clarke also said Brexit is ‘coming around the corner’, and that ‘none of knows what this will mean for us’.

Paula Deen smiling for the camera © Provided by Associated Newspapers (Ireland) Limited, t/a dmg Media Ireland

‘We have to assume that consumers will now be forced to pay more because of the increased VAT,’ she said.

This could mean the average diner will see almost €4 being added onto their bill. A meal in a Dublin restaurant for two adults that currently costs €85 is set to increase by 4.5pc, adding an extra €3.80 onto the average bill.

Hotel rooms will face a similar hike. Finance Minister Paschal Donohoe said a review of the current 9pc VAT rate carried out by the Government had found the measure had ‘done its job’. He said that in the new economic reality it was appropriate to increase the rate of VAT in the tourism sector to 13.5pc from January of next year. This will raise €466million in 2019.

Mr Donohoe said he was conscious the change may present a challenge to the industry. He announced an additional €35million of ‘more targeted support’ for the sector, including an extra €4.5million for marketing and €10million to build greenways.

a man wearing a suit and tie © Provided by Associated Newspapers (Ireland) Limited, t/a dmg Media Ireland

The Irish Tourism Industry Confederation said it was very disappointed with the VAT hike. Eoghan O’Mara Walsh, CEO of the ITIC, said: ‘The increase in the VAT is likely to damage demand and, with Brexit less than six months away, this is extremely worrying for Irish tourism and will make trading conditions much harder for business’.

He said Brexit poses a major risk to Irish tourism with 39pc of all our international tourists coming from Britain. Michael Lennon, Irish Hotels Federation president and owner of the Westport Woods Hotel in Co Mayo, branded the VAT increase ‘a joke’.

He said: ‘It’s a reckless failure to recognise how important we are to the economy, the whole tourism industry. The growth to the economy has been helped by tourism.’

The VAT hike was also strongly criticised by the National Off-Licence Association, which also hit out at the Government’s decision not to decrease excise duty on alcohol in Budget 2019.

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