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Taoiseach rules out 0% VAT rate for tourism, but cut could be brought in by the next government

The Taoiseach said he is in favour of a tourism taskforce being set up.

File photo: Galway
File photo: Galway
Image: Shutterstock/Luca Fabbian

SLASHING OF THE VAT rate for the tourism sector could be on the cards for the next government, but it cannot be reduced to 0%, according to Taoiseach Leo Varadkar.

Speaking in the Dáil, the Taoiseach said reducing VAT on the tourism and hospitality sector to 0% would be contrary to the EU VAT directive, stating “that is not possible for as long as we are a member of the European Union”.

“It would be possible for the next government to reduce it should it choose to do so, but that will be a matter for the next government,” he added.

There has been speculation that senior figures in both Fianna Fáil and Fine Gael want to see the rate cut as the tourism sector is likely to be one of the most impacted sectors by Covid-19.

Yesterday, Junior Minister for Tourism Brendan Griffin said he supports calls for a 0% VAT rate to help them get through Covid-19.

“This is something I think is very necessary to give us a fighting chance to recover as quickly as possible and to take on the huge competition there is internationally.

“It is only when you go to places like the world travel market in London or the ITB in Berlin that you see the huge number of exhibitors that are there from all over the world.

“You realise how competitive it is for Ireland but also how well we do for tourism as we attract close to 11 million tourists per year.”

The Taoiseach said today that he “absolutely” agrees that we will need a tourism recovery task force “to get tourism going again”.

“I had the privilege of being Minister for Transport, Tourism and Sport in my first job in government and was able to oversee the implementation of the last report of the previous Tourism Recovery Taskforce, which led to record levels of tourism in Ireland. I believe that is possible again,” he said.

The Taoiseach was also asked about the possible changes in relation to the form people arriving in Ireland have to fill out about where they are socially isolating themselves for for 14 days.

It was revealed today that one in three people arriving into Ireland have not given their quarantine details to officials.

The forms are not yet mandatory, but the Taoiseach has indicated that they could be legislated for.

“They may well need to become mandatory. That is something we are considering at the moment… Making it mandatory for people to fill in forms in order to self-isolate for 14 days when they come to the country is not good for tourism. People will not come to Ireland if they have to isolate for 14 days.

“We need to get to the point where we can have air travel start again. I want air travel to start again for business and leisure but that will have to be done safely. That is being worked on at the moment.”

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