Fitzpatrick hits out at Government over decision to raise VAT for tourism and hospitality in Budget 2019
Louth TD Peter Fitzpatrick voted against the Government on Budget 2019 yesterday after taking exception to their decision to increase the tourism and hospitality rate of VAT to 13.5%.
Deputy Fitzpatrick, who left Fine Gael just over a week ago, said Brexit presented a major challenge to tourism both locally and nationally and that increasing the rate was not what was needed at this time.
He said: ‘It was widely reported that the VAT measures introduced a number of years ago to help the tourism and hospitality were to be reversed and unfortunately that was the case in yesterday’s budget speech.
“The Minister in his speech stated that tens of thousands of extra jobs were created in the tourism sector since the introduction of this measure in 2011 and that the sector has never supported more employment than it does today.
“The sector alone supports 240,000 jobs and provides balanced regional growth as confirmed by the Minister Pascal Donohoe.
“Why the Government would threaten this by reversing a measure that was designed to protect and support our tourism sector in the first place does not make any economic sense at all,” said Deputy Fitzpatrick.
The Finance Minister stated that this increase will allow him to reduce his reliance on other taxes like corporation tax and prevent increases there but Deputy Fitzpatrick said he was disappointed that Brexit wasn’t acknowledged when making the decision.
He said: “In other words the Government want to increase the costs on local Irish indigenous businesses so that we do not have to increase taxes on companies who are already paying the lowest rate of corporation tax in the EU.
“I was very disappointed when the Minister did not acknowledge the threat of Brexit to the tourism sector, particularly along the border area.
“There is no doubt that Brexit will be very challenging to the tourism sector and now more than ever the sector needs all the supports and help to maintain its growth. Coming from the constituency of Louth and East Meath I know better than most the value of a thriving tourism sector. In my constituency we have some of the best tourist attractions in the country. In the north of the county we have the Carlingford Peninsula with attractions like Carlingford village, the Cooley mountains, the many walking routes in the area and of course the new greenway from Carlingford to Omeath. Further south we have the historic towns of Dundalk and Drogheda, the many attractions of the Boyne Valley and of course the seaside villages of Laytown and Bettystown. These areas suffered greatly when the economy collapsed and we were faced with years of austerity.
“On top of this we have the growing threat of Brexit and this will be particularly felt along the border areas. The 9% VAT rate has been critical to Louth and East Meath’s tourism’s success, having brought Ireland more closely in line with tourism VAT rates in other European countries with which we compete. Tourism is one of our largest indigenous industries and is essential for prosperity and economic well-being. Keeping the VAT rate at 9% is something I have always advocated for and I will continue to do so for in this year’s budget.
“As Great Britain plan to leave the EU, there is a level of uncertainty around Brexit about what this means for. We must also consider what this means for our future tourism and hospitality in. We are still in the process of achieving sustainability and a lot of our tourism and hospitality is seasonal. It’s undoubtable that we rely on tourism from the UK market, with tourists from the UK being are our largest overseas market. As the Euro has become increasingly more expensive than Sterling, visitors are spending less. Since the announcement of Brexit in 2016, UK visitors have reduced. The UK market is a challenge.”
The local Independent TD finished by saying: “With this in mind I cannot understand or agree with the decision to reverse the VAT rates from 9% to 13.5%.This measure was a great help to the tourist sector at the time of its introduction and I firmly believe it should be retained to help the industry cope with the undoubted effects of a looming Brexit. I for one cannot support this measure and will not be voting in support of it.”