Varadkar calls for retention of 9 per cent rate for tourism-related services

The Minister for Tourism has said he wants the 9 per cent VAT rate for tourism-related goods and services retained after the next budget. Leo Varadkar warned that the sudden withdrawal of the rate could "do real harm".

The rate, which had been reduced from 13.5 per cent, was introduced as a temporary measure in 2011 by Minister for Finance Michael Noonan.

The intention was to give a boost to the labour-intensive tourism industry and related services such as restaurants, cinemas, hairdressers, sport facilities and printed matter such as brochures, newspapers and magazines.

The measure was only due to apply until December 31st, 2013.

Mr Varadkar told the launch of a review into the future of the Irish tourism industry yesterday that he and the junior minister for tourism, Michael Ring, had been "fighting the good fight" in relation to retaining the rate.

Mr Ring said he had already met Mr Noonan in relation to retaining it at 9 per cent. “This is working, this is positive and it should be left as it is,” the Minister of State said.

Paul Carty, manager of the Guinness Storehouse, one of Ireland's biggest tourism attractions, said the VAT rate had helped to create 10,000 new jobs and had made the Irish tourism industry "vastly more competitive".

The review, which is the first in 10 years, will seek to provide a framework for Irish tourism into the 2020s. The principal focus will be on how to get the maximum return from new tourism facilities and from marketing Ireland abroad at a time when money is tight.

Another focus will be on how to replicate the success of The Gathering, which is expected to exceed its target of giving at least a 5 per cent boost to overseas visitor numbers this year.

Fáilte Ireland chief executive Shaun Quinn said the digital world had transformed the tourism industry since the last review was carried out in 2003. Visitors were now getting their information much more from fellow travellers though websites than they were from tourism offices, he suggested.

Mr Quinn also said the idea of a Gathering II, which had been suggested by some in the industry, was misplaced. Although the Gathering had been a success, he said it was an “innovative idea of its time” and it was time for new ideas.

The public has been asked to contribute submissions to the tourism strategy by November 1st. Those who wish to make a submission can contact the tourism policy review at tourismpolicy@dttas.ie