Fianna Fáil TD Dara Calleary has described as bizarre the government’s decision to leave out a number of essential tourist services from the cut in VAT. Deputy Calleary has said moves to keep car hire, tour guide services and drinks served in restaurants at the higher rate of 13.5% make no sense whatsoever.
Deputy Calleary commented, “I fail to see any logic in the government’s decision to omit a number of key tourist goods and services from the cut in VAT. Fine Gael and Labour claim that the measure is aimed at stimulating the tourism sector, and yet some of the most popular items for all domestic and international tourists are omitted from the cut.
“One of the first costs that many tourists investigate before booking a holiday is car rental. When visiting an island nation like Ireland, car rental is particularly important as most foreign visitors travel by air. But despite this, the government has decided to leave car rental at the higher rate of VAT.
“In addition to this, tour guide services which have the potential to generate significant income have also been left out of the VAT cut. These are added extras for many foreign and domestic tourists and they simply won’t be used if they are not perceived to be good value. Where is the sense in this, if we are trying to tempt tourists into spending money?
“Meanwhile, the cost of soft drinks and alcohol served as part of a meal in a restaurant will also remain at the higher rate of VAT. That’s despite the cost of drinks from a vending machine being reduced to the lower rate. There is a complete disconnect in this strategy. Cutting vending machine prices will do absolutely nothing to stimulate the tourism industry.
“I am dismayed at the complete lack of logic in the Fine Gael/Labour government’s VAT policy. It is another example of their failure to think things through. If the government want to create jobs by stimulating tourist demand, why have they left key tourist items out of this strategy?”