Ibec calls for the retention of the 9% VAT rate indefinitely to support the Experience Economy percent
Ibec, the group that represents Irish businesses, is calling on the Government to maintain the 9% VAT rate indefinitely for the Experience Economy. This rate, scheduled to conclude on August 31st, has played a vital role in sustaining businesses and preserving a significant number of the more than 300,000 jobs in the experience economy nationwide. The removal of the rate at this juncture could damage a significant portion of the Experience Economy, at a time when businesses continue to grapple with rising costs.
Sharon Higgins, Ibec's Executive Director of Membership and Sectors said:
“Our experience economy is a dynamic sector that encompasses a wide array of industries such as hospitality, retail, travel, food, beverage, tourism, entertainment, arts, events, and activities. It contributes substantially to employment in regions that are often harder to reach, serving as a pivotal component of Ireland's economic landscape.
Despite government interventions in energy cost concerns, businesses across the supply chain continue to grapple with escalating expenses, leading to higher costs for consumers. Furthermore, the projected rise in the minimum wage—potentially up to 12% in the coming year— along with auto enrolment and other costs, will contribute to further financial strain. For some sectors, with low pension coverage and high living wage levels, these costs may be significantly higher. By 2026 and 2030, respectively, they could add 13% and 17% to the wage bill in the Experience Economy.
As the Central Statistics Office (CSO) data highlights there has been a persistent 12% decline in the volume of activity within the Accommodation and Food Services sector during the first half of 2023, compared to the same period in 2019.”
The Experience Economy employs over 300,000 people, or 20% of the private sector workforce, and is worth €4 billion to the Irish economy.