Fáilte Ireland today welcomed the decision in Budget 2014 to continue with the reduced rate of 9% VAT for the hospitality sector, originally introduced by the Government in 2011.
The tourism group also said the scrapping of the air travel tax would act as an important boost to enticing more overseas visitors to our shores.
"The VAT reduction has provided a real kick-start to an industry which is only now starting to emerge into growth following four or five years of contraction", the group's chief executive Shaun Quinn said.
"The continuation of the VAT measure will allow tourism businesses to generate more revenue and jobs, particularly for those regions away from the major technological and industrial hubs which have been particularly impacted by unemployment," he added.
Meanwhile, the chief executive of Shannon Airport, Neil Pakey, today welcomed the decision to end the Air Travel Tax.
Mr Pakey said that for international airports like Shannon, the move may help tip the balance in its favour when it comes to convincing airline customers to enhance existing and put on new services.
"We ultimately hope that this will increase our chances of growing passenger numbers and it will have a positive knock on effect for not just ourselves but for the wider business and tourism sectors in the region we serve," he added.
Aer Arann, operators of the Aer Lingus Regional services across Ireland, the UK and France, also welcomed the move to end the tax from April 1, 2014.
However, the airline urged the Government to bring forward the date of the travel tax abolition to January 2014 to offer an immediate incentive to tourists to choose Ireland when making their travel plans for the New Year and further in 2014.
"Setting an abolition date of April risks undermining the bounce this decision offers. The early days of the New Year are traditionally a time when people make travel bookings for the year ahead. St Patrick's Day, Easter and school holidays are all key travel occasions in the first quarter of the year. We risk losing out on these and other bookings if the travel tax still applies,' the airline's commercial director Simon Fagan said.
9% VAT rate retained
The Irish Hotels Federation has welcomed the decision to retain the 9% tourism VAT rate.
IHF President Michael Vaughan said: "The retention of the reduced VAT rate provides us with greater certainty into 2014 and will enable us to compete more effectively abroad for holidaymakers,'' commented the IHF's President Michael Vaughan.
While it has welcome the retention of the 9% VAT rate, Retail Excellence Ireland said it was disappointed with a number of Budget interventions which it said will damage the Irish retail industry.
The group said that the increase in the tobacco licencing fee from €50 to €500 a year will penalise the legitimate and regulated tobacco seller instead of targeting black market tobacco sales.
Retail Excellence Ireland's David Fitzsimons also said that the increase in the pharmacy dispensing fee from €1.50 to €2.50 will lead to one in five patients forgoing certain prescribed drugs which will have a significant and negative impact on patient health.
"It is clear that the reduction of the VAT rate from 13.5% to 9% in last year's Budget has had a very positive impact on job retention and creation. According to the Department of Finance the measure retained and created 13,500 jobs. We are pleased that Minister Noonan has retained the rate," Mr Fitzsimons added.
Retail Ireland, the Ibec group that represents the retail sector, said the increases in excise duties are unwise and will impact negatively on consumers and retailers.
Retail Ireland's Stephen Lynam said that while retailers welcome the freeze in fuel duties and the freeze in VAT rates, the excise increases will negatively impact on responsible consumers and reduce spending in many retail outlets.
Road rage
The decision to ignore the motor industry’s "swappage" proposal will result in the further export of Irish jobs and tax revenues to the UK, SIMI has claimed.
The group's director general Alan Nolan said that the Industry is extremely disappointed that a swappage scheme was not contained in the Budget, a scheme which would have given motorists a VRT discount off the price of a new car.
