Jimmy Deenihan (Kerry North, Fine Gael)

The Minister did not respond to my question on competitiveness in his previous response. The VAT rate is putting pressure on the competitiveness of our tourism industry. Our VAT rate of 13.5% on both accommodation and food is one of the highest in Europe. In Spain the rate is 7% on accommodation and food, in Portugal it is 5% on accommodation, in Greece it is 8% and in France it is 5.5% on accommodation. Throughout Europe the average rate is 10% on accommodation and food.

Excise duty on wine is also forcing up prices here. The excise duty on a bottle of table wine, for example, is €2.50. In Portugal, Spain and Greece, our main competitors, it is nil while in France it is 3c. The duty on a bottle of sparkling wine is €4.10 in Ireland while in France it is 6c. Our VAT and excise duty rates are making Irish tourism less competitive. I appeal to the Minister to make a special case to the Department of Finance to consider reducing them to some extent in the forthcoming budget.

The Minister referred to business tourism. I urge the Minister to make a special case for allowing people who come to this country for conferences to get a refund of VAT on their return. If people attend a conference in Belfast, for example, they will get a refund of VAT paid. Promoting business tourism in this country is at a major disadvantage because there is no refund scheme available for business tourists.

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