Call for VAT rate in tourism sector to be slashed to 5 per cent

Coronavirus pandemic has had ‘devastating’ impact on arts sector, Dáil committee hears

About half the jobs in tourism in Ireland depend on international visitors. Photograph: Getty Images

About half the jobs in tourism in Ireland depend on international visitors. Photograph: Getty Images


The tourism taskforce has recommended a VAT rate for the sector of 5 per cent, the minimum that would be allowed under EU rules, the Covid-19 committee has been told.

Chief executive of Fáilte Ireland Paul Kelly said that at 13.5 per cent Ireland had one of the highest rates in the EU where the average was 10 per cent to 11 per cent.

The tourism taskforce comprises representatives from the hotel and restaurant sectors as well as other stakeholders and is chaired by Ruth Andrews, Chief executive of the Irish tour operators association

Sinn Féin arts spokesman Aengus O Snodaigh called for a reduction in VAT for the arts sector which he said would be the last to open while Independent TD Michael Collins sought a zero VAT rate to help the industry, which had been decimated by the pandemic.

Mr Kelly said the tourism taskforce recommended a 5 per cent VAT rate as it was not possible under EU directives to have a zero Vat rate.

The committee, which is looking at the arts and entertainment sector, was also told that the pandemic has had a devastating effect on the culture and arts sector.

Secretary general of the Department of Culture, Arts and Heritage Katherine Licken said there had been wide ranging consultations since the pandemic started and an additional €25 million in funding was an immediate response.

The Department is also conducting a survey on the ongoing impact of the pandemic and said that €20 million of the €25 million would go to the Arts Council bringing its budget to €100 million. This included funding to assist performance venues, bursaries.

Ms Licken pointed to the surge in online interest showing the fundamental role the arts and culture played in difficult times with performances by the national cultural institutions reaching audiences of over 2.7million with 1.15 million live views.

Director of Creative Ireland Tania Banotti said the pandemic turned out to be “the making of the Cruinniú na nÓg” initiative which “took off like a rocket”.

She said there had been 1.6 million views of the Ceidlí in your kitchen online project.

Ms Banotti said performances would also be provided by bands and groups to those in nursing homes and congregated settings.

She added that the Fighting Words organisation established by Roddy Doyle will have four publications and there had been a phenomenal response to the climate change video by Cappabue national school, a rural school in Cork.

Speaking about the tourism sector Mr Kelly also told the committee that a €1 million public information campaign will be launched this weekend by Fáilte Ireland to instil public confidence in the safety of tourism operations during the coronavirus pandemic.

More than 700 businesses had signed up and 15,000 employees had been trained for the fáilte Ireland Safety charter which follows a €1.5 million “Make a Break for It” advertising campaign to encourage people to holiday at home.

Mr Kelly also warned that tourism will need the same “unprecedented” scale of support during the coronavirus pandemic that it received during the economic recession a decade ago.

He said that when the country was plagued with high unemployment during the financial crisis it was the tourism industry and initiatives like the Wild Atlantic Way that got people back to work faster and in larger numbers than any other sector.

Some 180,000 of the 260,000 jobs in tourism worth €8 billion to the economy, were based on international tourism. One in nine people are employed in the industry and in some counties along the Wild Atlantic Way tourism accounts for more than 1 in 5 jobs.

He said that for July 70 per cent of hotel capacity was unsold but 74 per cent was unsold for August. There was significant interest in self-catering and camping facilities and there was plenty of capacity.

Mr Kelly said there was good value available but acknowledged there were “exceptions” when Social Democrats TD Gary Gannon highlighted claims of “price gouging”. He said but he said people should shop around.

He said previous advertising campaigns generated a €10 return for €1 spent and €4 in €10 for the exchequer.