The reduction in the VAT rate from 13.5 per cent to 9 per cent is a welcome tourism boost which allow hotels and tourism providers to reduce prices, when they are allowed to re-open their doors.
his reduction was ‘urgently’ needed according to Kerry tourism representatives.
In an open letter last week to Kerry TD’s the Irish Hotels Federation (IHF) representing some 106 businesses including hotels and guest-houses in Kerry sought ‘urgent government supports’ to maintain 11,600 jobs at risk – up to 5,000 directly related to tourism. The letter, penned on behalf of the chairperson of the Kerry Branch of the IHF also sought the rates waiver, which has also been extended in this week’s budget.
While both measures will help tourism businesses, the majority of whom have been forced to close their doors, the measures do not go far enough to help an industry that is on it’s knees.
“The VAT rate is only valuable next year and when we are open,” said Ms Randles.
“We welcome the budget measures but they did not go far enough.”
Ms Randles was particularly critical of the lack of changes to the rate of the Employment Wages Subsidy Scheme (EWSS). Finance Minister Pascal Donohoe said at the budget briefing this week that a similar scheme would be introduced in March, when this scheme finishes. The IHF had sought a return to the lower rate in their pre-budget plea.
“They didn’t do enough for employees. They should have done more for people.”
Publicans have also given a cautious welcome to the budget though they too feel it goes nowhere near far enough.
Vintners Federation of Ireland head Padraig Cribben said the budget measures offer a “degree of hope”.
“It’s clear pubs will be exposed to the full force of social distancing measures to suppress the spread of Covid-19 until a vaccine is found. In that context, the Budget needed to reflect the reality our members will face over the coming months. The CRSS provides a degree of hope in that it will supply much needed grant support to publicans for the next five months if we remain at Level Three or higher,” he said.
“The new scheme provides a bridge to the future where Covid is over and normal life resumes. Publicans have paid a huge price for closing their businesses so this announcement is the least they deserve. Government needs to address the fact these businesses have been closed for a protracted period and reflect that in the support package,” added Mr Cribben.
“The reduction in the hospitality VAT rate is a welcome development. At present it’s of little use to most hospitality businesses but hopefully they can avail of the full benefit in 2021,” he said.