Catherine Martin (Dublin Rathdown, Green Party) | Oireachtas source

While elements of the hospitality sector are also important parts of the wider tourism ecosystem, as Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media I do not have responsibility for the general hospitality sector or the food services sector. However, the Minister for Enterprise, Trade and Employment and I co-chair the hospitality and tourism forum, which brings together regularly these two important and interrelated sectors.

The Government has strongly supported the tourism and hospitality sectors through a range of fiscal supports, particularly during the Covid pandemic and more recently in dealing with the challenges facing the sector. Those supports have included the retention of the lower VAT rate from November 2021 until 1 September of this year.

In 2021 supports from my Department included €55 million for a dedicated tourism business continuity fund, €17 million in capital investment for an outdoor dining scheme and €5 million for an urban animation scheme. In budget 2022, the Government allocated €67.6 million in additional funding for tourism, of which a further €50 million was for tourism business continuity supports. These were in addition to significant supports provided through the employment wage subsidy scheme, EWSS, and the Covid restrictions support scheme.

The Minister for Finance has responsibility for VAT rates and other taxation measures. In assessing any proposals on such matters, the balance between the costs of measures against their impact and the overall budgetary framework is a critical consideration.

The total estimated cost of the reduction of VAT to the Exchequer over that period is €1.2 billion. Notwithstanding this, the Government recognises both the challenging business environment within which key elements of the tourism and hospitality sectors are operating this year and the role that such businesses play in driving employment and economic activity across Ireland.

As the Deputy will be aware, I am concerned about the possible impact on other tourism businesses impacted by the reduction in tourist footfall due to tourism accommodation stock displacement. In this context, my primary focus is on supporting those businesses that most merit further assistance. In the period before the budget, I raised with the Minster for Finance the question of applying separate rates of VAT to food and accommodation as a transitional measure on the road to the restoration of the full rate. The Minister reiterated his view that the conditions justifying further adjustments to the VAT rate no longer existed. He also outlined that the Revenue Commissioners have advised that there would be significant practical operational concerns in having different VAT rates applying to hotel accommodation and meals, given how the sector operates, with various packages ranging from bed and breakfast accommodation through to all-inclusive board and lodging packages. I am conscious of the points raised in this regard by the Irish Tourism Industry Confederation, ITIC, recently. I intend to meet ITIC next week and I look forward to that engagement.

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