Cork-based hotels president welcomes plans to cut vat rate

The Cork-based President of the Irish Hotels Federation has outlined that plans to cut Vat for the hospitality sector would be an important step to support the industry.

The comments from Michael Magner, who also owns the Vienna Woods Hotel in Cork, come following on from an interview on RTÉ Radio 1 with Minister for Enterprise, Tourism and Employment Peter Burke who defended government plans to cut Vat for the hospitality sector.

The current Programme for Government contains a commitment to reduce the Vat rate in the hospitality sector from 13.5% to 9%.

Speaking to The Echo, Mr Magner said the proposal would assist vulnerable food led businesses that have faced an uncertain future and rising cost challenges in recent years.

“The commitment from the Minister to stand over the commitment that is in the programme for government towards the reduction of the Vat rate to 9% is welcome.

“It is needed on the basis of the food sector. The cut in Vat hospitality is for food businesses. Therefore it doesn’t apply to hotel accommodation as is our understanding.

“What it would mean for those businesses whose turnover is primarily made up of food sales, it will allow them an opportunity to again to have some viability into the future.

“The current government has been formed since the start of this year. With that, we see tourism and hospitality being moved into the Department of Enterprise, Trade and Employment.

“That is the absolute correct place for the industry to be in and it is something the sector and the profession have been calling for a very long time.

“We now have a Minister in Peter Burke, who is really supportive of our industry and understands the complexities of the sector.

Mr Magner added that with the right policies and a positive businesses environment, he believes tourism and hospitality can have a positive future ahead.

“The industry wouldn't be calling for a restoration of 9% Vat if it didn’t make sense and that is the reality of it.

“The isn’t a case of whereby businesses are trying to profiteer or return what could be seen as super normal profits.

“This is actually about ensuring businesses have a chance of survival and that is what it comes down to."