VAT rate for Tourism sector
Those who have been vocal in their support of the retention of the 9% VAT rate in the hospitality sector will see its retention as a victory. There is no doubt that the introduction of the measure has been a success in terms of jobs creation and has provided the tourism sector with a timely boost. Hopefully its retention will lead to further growth in the sector.
Excise duty increase on tobacco
The increase will add 50 cent to the price of a packet of cigarettes; a move that will please the health lobby groups. They may have pushed for a more significant increase but the Minister would rightly point that a larger increase could result in an increase in tobacco sales in the shadow economy and a reduction to the tax take.
No Excise duty increase on alcohol
Publicans are likely to welcome the fact that there will not be an increase in excise duty on alcohol products although this measure may not, in isolation, help sustain employment in the industry.
No reduction in VAT rate on construction services
Leaders in the construction sector had sought a reduction in the rate of VAT on construction services which it was hoped could have stimulated activity in this labour-intensive industry. This could have led to the creation of long-term sustainable employment in this sector. As it stands, the share of construction employment in Ireland remains below the pre-boom average
Motor tax on commercial vehicles
The minister announced the simplification of the rates of commercial motor tax by replacing the 20 existing rates with just five rates of commercial motor tax, ranging from €92 to €900 with effect from the 1st of January. The most significant reduction are concentrated on the larger goods vehicles. The maximum rate of commercial motor tax will be €900 per annum, down from €5,195.
Excise duty relief for microbreweries
The excise duty relief of 50% on the standard Alcohol Products Tax for beers produced in microbreweries which produce not more than 30,000 hectolitres per annum will now be available upfront as well as through a rebate. This will result in a cashflow benefit to such producers.