THE news that the Irish Government is to retain the 9% VAT rate for the hospitality sector in today’s Budget has increased the urgent need for the Westminster government to reduce the VAT rate for Northern Ireland according to SDLP MLA for South Down, and Party Spokesperson on Culture, Arts and Leisure, Karen McKevitt. 
“The hospitality sector in the south has benefited from a reduced rate of 9% and it has proved very successful.
“The Northern Ireland Hotels Federation called for VAT on the hospitality industry to be cut to 5%. As it is, the UK rate of 20% which we are faced with in Northern Ireland remains one of the highest in Europe.
“Last month the Treasury said that it did not accept the case for a UK wide VAT rate cut for restaurants and catering as it would cost around £9bn to the Exchequer.
“However, there is a case that Northern Ireland, sharing a border with the Republic, should be treated differently.
“Tourism is vital for the north, and border areas are particularly vulnerable to the disparity in prices that the reduced VAT rate in the Republic causes. Tourism is a major employer across the north also, especially in rural areas where other forms of employment are not as readily available.
“Tourism is the one of the bedrocks of our economy and more needs to be done to stimulate growth in the sector. The reduction in the VAT rate in the Republic is working with recent figures from the Irish Central Statistics Office showing that the number of overseas trips to Ireland by non-residents increased from 1.817 million in the second quarter of 2012 to 1.893 million trips for the period in 2013 which is is an increase of 4.2 per cent on last year’s figures.
“The low VAT rate in the Republic of Ireland must be replicated here if we are to give our tourism industry a fighting chance.”
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