“SIPTU are arguing today that the Minister for Finance, Michael Noonan, should withdraw the reduced 9% VAT rate for the hospitality sector, as the benefits have not been passed on to customers, employees or the exchequer.
“The 9% tourism VAT rate is one of the most successful job creation initiatives in modern times, helping to create more than 30,000 new jobs. It has helped the tourism sector to remain competitive whilst offering competitive prices on our tourism product. Tourism is up by 12.3% year on year. This is thanks to the hard work of a sector that depends on keeping its operating costs as low as possible.
“SIPTUs call to increase the cost of VAT from 9% back to 13.5% is irresponsible in the extreme and will reverse the good progress we have made in restoring Irelands tourism industry to health.
“With wages accounting for 42% of all operating costs in hotels (one of the highest levels in Europe), the benefits have clearly been felt directly by hotel employees in the sector who are among best paid and most protected in Western Europe. Ireland has created tourism jobs by keeping prices low enabling tourism businesses to operate in a highly competitive international market. Annually, the initiative results in an Exchequer gain of €165 million in social welfare savings and additional income tax.
“I would call on SIPTU to reconsider their position and help to protect tourism jobs, not put them at risk!