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Government announces staycation tax rebate as part of July stimulus plan

The July stimulus measures were announced by the government this afternoon.

Image: Shutterstock/Summer Photographer

THE GOVERNMENT HAS announced a ‘stay and spend’ tax rebate for people to claim money back on part of their hospitality costs while holidaying in Ireland.  

The measure was announced today as part of the government’s multi-billion euro July stimulus plan hoped to boost the economy following the negative impacts of Covid-19. 

As part of this, it is understood that people can receive 20% back from their restaurant and hotel bills in the form of a tax credit at the end of the year. 

The rebate will come into force in October and it is expected to run until April 2021.

The maximum expenditure for individuals under this measure is €625, and up to €125  can be received in taxback. 

This amount will be doubled for couples, who can receive up to €250 back on a spend of €1,250. 

People must spend a minimum of €25 to avail of this measure, Taoiseach Micheál Martin said today. 

Martin said the late introduction of this rebate in the year will “give the support when it is most needed” to the hospitality industry. 

He said this will give “opportunities for people to take weekend breaks, go to restaurants and keep the industry going” when the summer tourism season ends. 

The Taoiseach added that it is “critical in the winter months that we can keep income going in the sector”, at the moment and into the future. 

The government has also announced an extension of the Pandemic Unemployment Payment and further measures for businesses.

The standard rate of Value Added Tax (VAT) is also being reduced from 23% to 21% for six months from 1 September this year. 

The president of the Irish Hoteliers Federation, Elaina Fitzgerald Kane, said she has “serious doubts” about the effectiveness of the staycation tax rebate scheme in encouraging holidays. 

“It seems overly cumbersome and convoluted, and we are urgently seeking further clarification from the government on how the measure will operate,” she said in a statement. 

“We are disappointed that the government failed to deliver a reduction in tourism VAT. This is a missed opportunity given how highly effective the previous reduced VAT rate was in promoting increased employment.”

In the UK, the VAT rate on food, accommodation and attractions was reduced from 20% to 5% between this month and January 2021.

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- With reporting by Ian Curran 

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