County Wexford Chamber calls on Government to retain 9% VAT rate

County Wexford Chamber firmly believes that the 9% Value Added Tax (VAT) rate for the tourism and hospitality industry remains at its current level. It should do so until at least the end of 2023 in order to safeguard the sector’s recovery and support further restoration of employment.

The 9% VAT rate makes a vital contribution to tourism throughout Wexford and delivers enormous dividends to the Exchequer in terms of employment and local economic activity.

Acting CEO Emma Dunphy recently wrote to the Minister for Finance, Michael McGrath TD, outlining the need to retain 9% VAT in this sector. This was in response to concerns raised by members about the negative impact on their businesses of the VAT increase.

Significant employers

Irish tourism businesses, including hotels and guesthouses, are collectively the largest indigenous employer in the country. They are a critical part of our national and rural economy, supporting over 270,000 livelihoods prior to the pandemic. This includes 10,000 jobs throughout Wexford, with tourism contributing €227 million annually to our local economy.

“Over the last year, this industry has made enormous progress in restoring employment, reaching almost 90% of previous levels. This was boosted by a number of short-term factors including high levels of pent-up demand, accumulated personal savings by consumers during the pandemic, and a  large amount of displaced business previously contracted for 2020 and 2021,” wrote Ms Dunphy.

Uncertainty ahead

This industry is facing into very worrying headwinds with enormous uncertainty around the future economic outlook. A full recovery is likely to be delayed until 2026, and it will be further impacted by a softening in demand because of downturns in the global economy.

“The overriding priority must now be to safeguard tourism livelihoods and secure the long-term sustainable development of this industry.”