Séamus Kirk (Louth, Fianna Fail)
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1696. To ask the Minister for Transport, Tourism and Sport if he has received a copy of the recent report for Fáilte Ireland, An Analysis of the Impact of the VAT Reduction on Irish Tourism and Tourism Development; if he has noted its content; if his attention has been drawn to the fact that the report published by Fáilte Ireland outlined that the lower VAT rate of 9%, which was introduced to give the tourism sector a boost in 2011 and which has been maintained ever since, is continuing to have significant benefits for the economy; if he has noted that since its introduction more than 30,000 jobs have been added to the sector as a result of the measure being in place; and if he will make a statement on the matter. [33737/14]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am well aware of the recent report on the impact of the 9% VAT rate that was commissioned by Fáilte Ireland which shows that the rate continues to have a very beneficial impact on the tourism and hospitality industry, particularly in terms of employment.  Of course, taxation policy is a matter for my colleague the Minister for Finance, Michael Noonan TD, in the first instance. 

The report found that seasonally adjusted employment levels in the relevant sectors in Q4 2013 were 17,300 ahead of Q4 2012.  Employment in the 9% sectors is now circa 30,000 higher than it would have been had they performed in line with comparable service industry sectors.  Based on the assumption that only half of those newly employed were previously on social welfare, the increase in employment since 2011 equates to a benefit to the Exchequer of circa €165 million between additional income tax and social welfare savings. 

More broadly the VAT rate has contributed to a marked and continuing improvement in Value for Money (VFM) perceptions of Ireland by overseas visitors.  The net assessment of VFM by overseas visitors (i.e. negative perceptions subtracted from positive perceptions) has greatly improved over the past few years, as follows - 1% in 2010, 13% in 2011, 24% in 2012 and 26% in 2013.  This competitiveness has undoubtedly contributed to the increase in overseas visits to Ireland of 7.2% in 2013, while increases in visit numbers to date this year (up to end-July) are even more impressive at 9.9%.  There also was an increase in international tourism earnings of €363 million between 2011 and 2013. 

Finally, the report notes that similar measures have been introduced elsewhere to boost economic activity in tourism and hospitality sectors, including in Germany, France and Switzerland.  Some of these countries have reduced VAT rates to significantly below 9%.