Mulroy calls on Government to immediately reduce tourism VAT rate

A WESTPORT councillor has appealed to the Government to immediately reinstate the reduced VAT rate to assist the tourism industry as an uncertain tourist season looms.

Fianna Fáil councillor Brendan Mulroy met Minister for Finance Michael McGrath during his recent visit to Mayo and called on him to restore the reduced VAT rate to assist the tourism industry as an immediate priority.

Cllr Mulroy said he told the Minister that the tourism industry is now at a crossroads having experienced unprecedented increases in operating costs over the last 24 months.

“Hospitality businesses in Westport, Newport, Louisburgh and across Mayo are being hit hardest, particularly those businesses heavily reliant on food services which are dealing with very tight margins and who are struggling to keep their businesses open.

“While the costs of operating a business is an issue throughout the wider economy, it is particularly acute for tourism and hospitality given the labour-intensive nature of its businesses,” commented Cllr Mulroy.

Following discussions, Cllr Mulroy strongly pressed Minister McGrath for the Government to introduce offsetting measures that take into account the disproportionate impact faced by the tourism and hospitality industry.

“Alleviation measures must be introduced without delay to off-set the increase in tourism VAT given the impact this decision has had on food-related services and where margins are very tight. At a minimum, the VAT should now be returned to 9 percent for food services within the hospitality sector and this will help secure jobs, boost employment and increase more economic benefits to towns like Westport, Newport and Louisburgh who heavily rely on tourism and where hundreds of jobs are dependent.”

Darren Madden of the Clew Bay Hotel in Westport said he and his fellow tourism operators are very worried that unless the Government takes steps to support the tourism sector, the ongoing effect of the increase in VAT will further impact on consumer sentiment over the next 12 months. “Businesses throughout the country, particularly regional tourism businesses like us, are already seeing the effect this is having on consumer spend on discretionary items, such as dining out. If the Government are serious about supporting tourism, the restructuring of Employers’ PRSI for our sector, including a targeted rebate for businesses within the sector is what is urgently needed.”

Mr Madden said that a widening and expansion of the existing business supports scheme is urgently required as it currently has very restrictive thresholds for qualification. He cited the Increased Cost of Business (ICOB) Grant Scheme, where businesses with a 2023 rates bill for their property over €30,000, do not qualify for this grant.

Cllr Mulroy added that tourism is vital to Westport, Newport, Louisburgh and surrounding towns and villages and that the industry should be supported further by the Government given the massive challenges it faces.

“Cost increases have been relentless, and it is not sustainable. I know from talking to tourism businesses in West Mayo that they face significant challenges in relation to competitiveness as tourism and hospitality is a labour-intensive business. Decisive action from the Government is what is needed now and without delay,” he said.