Michael Healy-Rae (Kerry, Independent)
Link to this: Individually | In context | Oireachtas source

102. To ask the Minister for Finance if he will maintain the support and growth of the Irish tourism industry by ensuring the 9% VAT rate is sustained; and if he will make a statement on the matter. [28834/16]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The 9% reduced VAT rate for tourism related services was introduced in July 2011 as part of the Government Jobs Initiative. The measure was designed to boost tourism and create additional jobs in that sector. The tourism sector is a key sector in the Irish Economy and the introduction of the 9% VAT rate was aimed at reducing costs during a very challenging time for the sector. The objective was to boost tourism and create additional jobs. While the VAT rate was due to revert to 13.5% in 2014, I retained the 9% rate on tourism activity in Budget 2014 because the initiative had proved to be a major success. Between the second quarter of 2011 and first quarter of 2016, on a seasonally adjusted basis, the number of people working in the Accommodation & Food Services Sector nationally increased by 31,000, taking total employment from 114,900 to 145,900. This increase of 27% compares to an increase of 7.2% in overall employment over the same period indicating that the measure may have been successful in terms of job creation and has made a significant impact on the competitiveness of the tourism product.

The Government, in the Programme for Partnership Government, has committed to increasing revenue from overseas visitors, growing employment in the tourism sector and increasing the number of visits to Ireland, through the retention of the 9% VAT rate on tourism related services, among other measures, providing that prices remain competitive. With reports of rising prices within the tourism sector, particularly in Dublin, it is incumbent on the industry to ensure that this relief continues to be passed through fully to the consumer. My Department will continue to monitor developments in this regard.