VAT rate and the hospitality industry


Sir, – Ciarán Hancock’s piece on the reduced VAT rate on the hospitality industry should alert us to just how weird this policy is (“Time to replace tourism’s VAT rate with targeted investment”, Business Opinion, July 12th). A room whose ex-VAT price was €100 saw its VAT-inclusive price fall from €113.50 to €109, or slightly under 4 per cent. Would you suddenly fall over yourself to buy a holiday (still less a foreign holiday) as a result of such a meagre reduction in price? Of course not. Nor would you find the reduction in the price of a meal from €50 to €48 irresistibly tempting. I have not seen any research on this matter, and perhaps the industry’s lobbyists could point me in the right direction. In the meantime, those who say “look how much tourism has increased since the VAT rate was reduced” will continue to remind me of the primitive peoples who did a sun-dance every day just before dawn in the conviction that the sun rose because of this practice. – Yours, etc,



Co Dublin.