VAT Cuts Proves To Boost Tourism

August 19, 2014 Taxation in Ireland

DUBLIN – Cutting VAT has had a proven positive result in Ireland, significantly boosting revenues, drawing in more tourists, and helping raise employment levels.

Late last week the tourism authority of Ireland Fáilte Ireland issued a statement with the results of a new report on the effect of cuts to the rate of VAT on the national tourism industry, showing that the reduction had a real and tangible positive effect on the country.

The report, which was completed by Deloitte, showed that since the rate of VAT faced by the hospitality industry was cut in 2011 from 13.5 percent to 9 percent, the number of tourists coming to Ireland has shown a marked improvement, which has increased activity enough to necessitate hiring an extra 30 000 extra tourism and hospitality employees.

The boost in the number of tourists resulted in an increase of VAT collection of EYR 100 million in 2013 alone.

The increase in the number of employees in the tourism sector has also boosted tax revenues, as collections improved by EUR 165 million.

It was also noted that the positive results seen following the tax cut have proven to be consistent, indicating that the boost to tax revenues and employment levels may be permanent

Photo By: Nikos Koutoulas