Peter Burke expects VAT reduction as part of plan to support tourism

By Cillian Sherlock, PA
The Enterprise Minister has said he expects a VAT reduction for some parts of the hospitality sector, as he refused to be drawn on whether hotels would be excluded from such a move.
Peter Burke said he expects a reduction in VAT will be “front and centre” of a new tourism strategy to be announced next month.
He said more than 200,000 jobs are dependent on businesses such as restaurants and coffee shops, adding that the sector had faced “a lot of challenge”.
The hospitality industry has long called for its VAT rate to be slashed from 13.5 per cent to 9 per cent.
Speaking to reporters on Monday, Mr Burke said: “This is a key tool, a key mechanism to support that job growth and ensure that that sector can remain resilient.”
He added: “They’ve faced a huge amount of regulatory increases over the last number of years, ones which I have given certainty to now, so at least businesses know now, in the near- and medium-term, exactly the cost they’re going to face.
“I think this will support those retail jobs and put our tourism sector in the best possible place to absorb that huge demand that there will be.”
Mr Burke said there were “a lot of exciting plans for tourism”, adding: “I would expect that front and centre of that will be a reduction in VAT, which is very important to the Irish government.”
His comments came after 22,000 people attended an American college football match at the Aviva Stadium in the capital at the weekend, which resulted in a spike in some hotel prices.
The minister was also critical of hotels increasing prices for other major events in Dublin, adding that it was at the “forefront” of his mind when entering Budget discussions.
On the event-related inflated prices, he said: “It’s important to recognise that not all hotels do that, but it is not good enough.
“When you see extortionate prices for concerts or for specific games, it really sends out a bad message for Irish tourism – so I would absolutely call them out on that, it’s not something that is acceptable.
“It’s something we’ll be looking at in the budgetary context, and how we frame the responses that we’re going to have.”
He added: “Areas like this are very much at the forefront of my mind as decisions that we make with the Minister of Finance (Paschal Donohoe) and my Government colleagues in the coming months.”

Pressed on whether the 9 per cent VAT rate should be split between food-based hospitality and accommodation providers, Mr Burke said he did not want to get into budgetary negotiations, adding he would discuss it with Mr Donohoe.
The minister was speaking to the media as part of the launch of the Government’s “market diversification” plan that was devised as part of the response to EU-US tariffs.
The action plan jointly developed by the Department of Enterprise, Tourism and Employment and the Department of Foreign Affairs and Trade is the result of extensive engagement across Government and with state agencies.
It also supports the ambitions of the forthcoming Global Ireland 2040 framework.
The minister said it reflects an ambition to build a “more resilient, competitive and globally-connected Irish economy”.
He said the US will remain a “key cornerstone” to policy but added that the Government is exploring opportunities in “expanding our network” into new markets.
Tánaiste Simon Harris said the Irish economy “remains robust and successful” but added that this cannot be taken “for granted”.
He said: “As a Government we have invested heavily with significant additional diplomatic and state agency resources in Asia, Latin America, Africa and the Gulf under Global Ireland 2025.
“Ireland is now represented by diplomatic missions in over 100 cities around the world, all of whom have trade promotion as one of their core priorities.”