Cut Tourism VAT

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Wednesday, 02 December 2015

Northern Ireland Committee Meeting – Impact of Tax Structures on Tourism in Northern Ireland

Ufi Ibrahim, CEO of the British Hospitality Association, and Janice Gault, CEO of the Northern Ireland Hotels Federation, spoke at the Northern Ireland Committee on Wednesday December 2. The inquiry was focused on the promotion of Northern Ireland tourism through VAT cuts. The committee heard that only 14% of visitors to Northern Ireland are international, approximately 400,000 people, compared with the year on year growth experienced by the Republic of Ireland.

“Our problem has never been when we have got them there; our problem has been getting them to come, and that has been the ongoing challenge for [Northern Ireland].” – Janice Gault

Janice Gault commented on the detrimental effect of high tourism VAT, “Our argument is that we are faced with a number of challenges, one of which you have quite rightly pointed out.  Having VAT at 20% certainly does not help the situation, and that is one difference that we have. We are attached to somewhere that has recognised that a VAT reduction and a more effective tax system does help your tourism product grow, and they have proved it.  They have proved that you can grow your tourism product.”

Ufi Ibrahim cited responses from a survey conducted by the BHA, describing how establishments would invest money following a VAT cut, “The British Hospitality Association has carried out surveys in that respect with its members, and one of the surveys where we had 200 respondents I have here to share with you.  Over 90% of those 200 businesses said that if a 5% VAT rate was achieved some or all of it would be passed on to the customer.  82% said that they would invest more in their products and facilities.  67% said they would employ more people.  57% said that they would be able to invest more in training; this was a particularly prevalent point among SMEs, who find it very difficult at the moment to find readily available working capital to invest in training.  Finally, just under half, 48%, said that it could have a positive impact on overall wage levels across the whole board of the employee base.” Ufi Ibrahim

Link to watch meeting: http://www.parliamentlive.tv/Event/Index/e69c2fba-b387-4d32-b693-4898828b25e6

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