Hoteliers say hike in hospitality VAT is a severe blow to Irish tourism, with rural businesses being the most affected.

At midnight, despite pleas from sector representatives to maintain a reduced rate, the VAT for the hospitality and tourism industry increased to 13.5%. The rate had been lowered to 9% in November 2020 as part of the Government’s efforts to mitigate the financial impact of the pandemic on the sector.

Denyse Campbell, president of the Irish Hotels Federation (IHF), expressed her concerns about increasing taxes on holidaymakers and Irish consumers. She emphasized that this move would negatively affect Ireland’s ability to compete for international visitors, especially during a time when Irish consumers are already facing financial stress due to inflation and rising mortgage rates.

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Campbell further highlighted that the increased VAT rate of 13.5% would have an inflationary impact and would disproportionately affect rural businesses and those with small profit margins that rely on food and beverage sales. She described it as a significant setback for the sector, which has already faced increased business costs.

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