Positive news for tourism, hospitality, hairdressers and more – Burke
The VAT rate for the tourism and hospitality sector has reduced to 9% today, Sunday, in line with the measures announced in Budget 2021, Minister Peter Burke has confirmed.
The reduced VAT rate, cut from 13.5%, will apply to the hospitality sector as well as catering and restaurant supply companies, tourist accommodation, cinemas, theatres, museums, historic houses, open farms, certain printed matter and hairdressing.
“This significant VAT rate cut was called for by the industry and the government responded,” said Minister Burke.
“It will mean a large reduction in the tax take by government but it gives a real boost to our local businesses involved in hospitality and other affected industries, who have been hugely impacted by COVID. The measure has the potential to benefit approximately 14,600 businesses.
“It is expected that the reduced VAT rate will cost the exchequer €336m in 2021 and €401m in total.”
He acknowledged that many of those businesses are closed now, but said that as we progress down the levels, we will see an incentive for people to get back on the main streets and market squares and support business people across the country.
“As Minister Paschal Donohoe pointed out, this reduction also will offer a boost now, not just when Level 5 is over as many businesses are trading via click and collect and takeaway.
“These businesses are still employing people and keeping people in jobs, so this cut will benefit these businesses. This is why Minister Donohoe put this in place as soon as possible after the Budget.
“Some 13% of those who are now on the Pandemic Unemployment Payment are in sectors like accommodation and hospitality and we need to help those businesses reopen and keep them open across 2021.
“While Level 5 will come to an end later this year, this tax measure is in place up until the end of next year. We are giving an important part of our economy the support that it needs to gradually reopen and get its people back to work.”