Business concern at VAT increase

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BUSINESS interests in Limerick and Shannon have expressed concerns about the decision to increase VAT for the tourism and hospitality sector.

Limerick Chamber has welcomed what it described as a fundamentally positive budget but expressed concern about the timing of the increase in VAT with Brexit around the corner.

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Responding to the Budget 2019, Limerick Chamber CEO Dee Ryan said that positive initiatives included Brexit measures to invest in making ports ‘customs ready’; the Future Growth loan scheme for SMEs, Agricultural and Food sector; as well as increased funding for Education and Childcare.

However, as the detail has yet to emerge on all of these initiatives, it is still unclear what shape they will take and if they will translate into actual cost savings for employees and their employers.

“It’s a time for holding-your-breath with regard to Brexit.  However, the increase in the VAT rate for the Hospitality sector, particularly its timing, is disappointing for our Mid-West members,” the Chamber CEO stated.

“It leaves hotels, bars and restaurants in our area even more exposed to the early downside of Brexit, which will undoubtedly result in a sharp drop in U.K. visitors once sterling devalues and makes Ireland a more expensive place for UK citizens to visit.”

The Chamber acknowledged the increased investment the government is committing to housing, education and health.

“Given the significant investment in Housing and Health, which is most positive, the overall amount left for other measures was limited. We support Minister Donohoe’s cautious approach with the establishment of a Rainy-Day fund, and welcome the balancing of the budget for the first time in a decade.”

Shannon Group Director of Public Affairs, Caroline Kelleher, told the Limerick Post that the group is “disappointed” with the decision to increase VAT.

And she added that the group ”would have liked to see an increase in funding for route connectivity in the region in the context of the National Planning framework. We feel that is very important to support FDI and Tourism”.

Read more Budget 2019 news here.