South Donegal TD calls on government to retain the 9% tourism VAT rate

South Donegal Independent TD Marian Harkin has said that the 9% tourism VAT rate must be maintained "as it is especially important for the sustainability of the hospitality sector along the border”.

She said: “The complete failure in the recent budget to address the chronic and worsening imbalance between the Northern and Western Region and the rest of the country could be somewhat ameliorated if the government extends this VAT rate beyond February.”

The Sligo Leitrim and south Donegal TD says the government had, and still has, the opportunity to do something concrete to help stabilise or reverse the ever-widening gap between the regions,

“If we can maintain the 9% VAT rate in the tourism and hospitality sector it will have a national impact and, crucially, a much greater impact in the Northern and Western Region. Tourism and hospitality are really important sectors in this region. We don't have the same numbers of high value jobs as other parts of the country, so our indigenous tourism and hospitality sector is essential to our economic well-being.

This is true, not just for larger towns like Sligo and Carrick-on-Shannon and but also for many smaller towns like Ballyshannon, Boyle, Drumshanbo, Tubbercurry, Enniscrone, Ballinamore and Manorhamilton, to name but a few”, she said.

“Any increase in the VAT rate would have an especially detrimental impact on the indigenous economy in this region, where the local hotels, restaurants and guest houses provide so many jobs, very often serving local produce and acting as important social spaces in the region. Allowing the VAT rate to return to 13.5% at the end of February will only serve to accelerate the growing regional disparities.

Ms Harkin said the sudden and steep drop in sterling is an added threat, hitting the border regions harder than anywhere else. “The sterling crisis should also cause the government to reconsider the future of the VAT rate. How can hotels, restaurants and guest houses remain competitive when their counterparts across the border will deliver better value to visitors with a strong euro or a strong dollar to spend?

“I'm asking the government to maintain the 9% rate on hospitality and tourism, at least for the next 12 to 18 months, it will make a significant difference nationally, but it will be a crucial intervention for the border counties.