Colliers Hotels and Leisure welcomes the tourism specific measures announced in the Irish Government’s July Jobs Stimulus Package
The measures will to a certain extent help tourism businesses and save jobs.
While we welcome the Stay and Spend Incentive that will see any taxpayer spending up to €625 on accommodation, food and non-alcoholic drinks (October 2020 - April 2021), being able to claim back up to €125 through a tax credit, we believe that a VAT cut on food and accommodation from the current 13.5% would have had a more immediate impact. We also think that a voucher scheme would have been less cumbersome and attracted greater take up of the scheme.
The extension of the Employment Wage Support Scheme (EWSS) is also welcome, giving a level of certainty to employers and specifically certain new hires and seasonal staff. However, once schools reopen in September, the hospitality sector will face immense challenges up to summer 2021 and beyond, when it is hoped that international tourists will start to return.
Tourism contributed over €9bn to the Irish economy in 2019 and employs in excess of 250,000 people. While total tourism earnings in 2020 are now forecast to be no more than €2.5bn, this vitally important sector will need further supports in the upcoming budget. On a population comparison basis, direct spending in Ireland is at over €3,000 per head (one of the highest in Europe), however hospitality and tourism remains disproportionally affected and must receive further stimulus such as the reduction of the 13.5% hospitality VAT rate, which remains at the second highest in Europe.
Other measures announced in the July Jobs Stimulus Package include:
• Business Adaptation Grant: €26m in funding is to be administered by Fáilte Ireland for tourism and hospitality businesses to contribute to re-opening costs (including costs of implementing Fáilte Ireland’s Guidelines for Re-opening)
• Restart Grant for SMEs: Many tourism businesses previously ineligible for the Restart Grant scheme are now be eligible for funding of up to €25,000 for costs associated with re-opening and reemploying workers following COVID-19 closures
• Credit Guarantee Scheme: The Department of Business, Enterprise and Innovation will manage this €2 billion scheme
• Commercial rates waiver have been extended by €600 million
• Some Tax Refunds such as a refund of some or all of corporation tax paid
• A new self-employed income tax relief for losses in 2020 due to COVID-19 is available
• Over €10m in Government funding is to be administered by Fáilte Ireland for the coach tourism sector
• Businesses will be allowed to delay payment of PAYE and VAT in part or in full for a set period with no interest or penalties