Promoting the Tourism Industry in NI through the Tax System

Promoting the Tourism Industry in NI through the Tax System

20 March 2017

The Northern Ireland Affairs Committee has called on the Government to investigate if powers over VAT, likely to be repatriated to the UK upon leaving the EU, can be used to boost the tourism sector in Northern Ireland. 

At present, the tourism industry in Northern Ireland is subject to a VAT rate that is more than twice that in the Republic of Ireland. The call comes as the Committee publishes its report, Promoting the tourism industry in Northern Ireland through the tax system.

Commenting on the Committee’s report, Colin Neill CEO Hospitality Ulster said;

“Hospitality Ulster has been calling for a reduction in Tourism VAT and Air Passenger Duty (APD) for a number of years and we are encouraged that after considerable investigations the NI Affairs Committee have backed our call for action.

“The Republic of Ireland has a Tourism VAT rate of just 9% and is our second largest market, not to mention our nearest competitor. This leaves us at a clear disadvantage as we are currently tied to the UK VAT rate of 20%. This also hampers us in our developing markets like Germany where Tourism VAT is just 7%. In fact, out of all the EU countries, only Denmark has a higher Tourism VAT rate then the UK, with the majority of EU countries having a rate significantly below 10%.

“We also welcome the inclusion of Air Passenger Duty (APD) in the report, you only have to look at the figures that show 67% of our out of state visitors came through the Republic of Ireland to see that we are again at a cost disadvantage in relation to flights. A disadvantage that is also holding back the development of new direct air routes into Northern Ireland. With the Scottish Highlands and Islands already exempt from APD there is no reason why Northern Ireland cannot be treated in a similar fashion.

“On the back of this report we will redouble our efforts at home and at Westminster to ensure our industry and the Northern Ireland economy get the appropriate tax regime as part of the Brexit process.”

Hospitality Ulster will be hosting a policy hack event next Monday at Ulster University, focusing on the impact of Brexit on the tourism and hospitality sectors.  Keynote speakers include Niall Gibbons, Chief Executive of Tourism Ireland and John McGrillen, Chief Executive of Tourism NI.