Budget 2017: How Will It Effect The Hospitality Sector?

Every October the country is faced with news from the news of changes to our countries budget for the year ahead - and this year was no different.

 

Changes have been introduced in a number of different sectors, with new jobs being created and money being invested, but what changes have been made in the hospitality sector?

 

The Irish Tourist Industry Confederation (ITIC) has welcomed the announced regarding the 9% VAT rate, citing that it 'allows Ireland to remain competitive in this key period of post-Brexit uncertainty'.  Chairman of ITIC Paul Gallagher commented:  "17 of the 19 euro-zone countries have tourism Vat rates of 10% or less so the tourism Vat rate in Ireland is right-sized and competitive at the moment. Tourism employs 230,000 people throughout the country and its future growth is predicated on a competitive industry and appropriate government policies".

 

The Budget was the announcement by Finance Minister Michael Noonan that a new tax on sugar sweetened drink is to come into effect in April 2018, while cigarettes are getting a 50c hike in excise duty, bringing the price of a packet of 20 cigarettes to €11. There's been no increase or decrease on the excise duty on alcohol.

 

Meanwhile, the Alcohol and Beverage Federation of Ireland (ABFI) has said the Government's decision not to reduce excise on alcohol in next year’s Budget is a "missed opportunity" for one Ireland's largest indigenous sectors.

 

Commenting on Budget 2017, Ross Mac Mathuna, Director of ABFI, said: "The drinks industry has come under increasing pressure this year following the Brexit vote and subsequent plunge in the value of sterling. The industry employs 92,000 people across the country from the grain to the glass and contributes €2 billion to the Irish economy. However, we continue to pay the highest price for alcohol in the EU – on a standard €9 bottle we pay a staggering €3.19 in taxes, meaning it is 12% more expensive than the equivalent in the UK. This is putting jobs at risk and we are increasingly vulnerable to cross border trading.

 

"The reality is excise is a tax on jobs, consumers and tourism and needs to be reduced. We will continue to engage with policymakers to campaign for a cut in this punitive tax.  A cut in excise would positively impact jobs and small businesses in every town and village across the country in a time of increasing economic uncertainty."

 

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