Further Govt boost for tourism & transport in Finance Bill – Varadkar

Today’s Finance Bill provides a further stimulus for Ireland’s tourism and transport sectors, and will encourage investment in the aviation sector, Minister for Transport, Tourism & Sport Leo Varadkar has said.

 

“This Finance Bill contains important measures to stimulate growth and job creation in the transport and tourism sectors. In transport, the fuel rebate will make a big difference to hauliers, bus and tourist coach operators grappling with high diesel prices. The measures for the aviation sector are an innovative means of growing this hugely important sector.

 

“Several other measures will encourage new investment in the tourist accommodation sector to pay for renovations and refurbishment, while the changes in the VAT cash receipts threshold will assist many small tourism businesses with cash flow. Many of the measures relating to transport and tourism were suggested by me and my Department following discussions with representative groups like the Irish Road Haulage Association (IRHA) and Irish Hotels Federation (IHF) and ITIC among others. I’m grateful that the Minister for Finance was willing to accept some of the proposals I put forward.”

 

Key measures for transport and tourism include:
• The diesel fuel rebate for hauliers, bus and coach operators;
• Incentives to promote the construction of new aviation facilities;
• Hotels and accommodation providers will benefit from:
o Extending the Employment and Investment Incentive Scheme to encourage investment in tourism accommodation;
o Confirmation of their eligibility to participate in Real Estate Investment Trusts;
• Small transport and tourism businesses will benefit from the higher VAT threshold of €1.25 million.

 

Transport & coach tourism

The return of a fuel excise rebate is very welcome for hauliers, bus and coach operators which have been badly hit by the high cost of diesel. It will support job-creation and growth by reducing the cost of moving goods, and will also give a further stimulus to tourism in the year of The Gathering.

 

The rebate will be worth up to 7.5 cent per litre, depending on the price at which the fuel is bought. Because the rebate will only be available to properly-licenced and tax-compliant operators, it will help to prevent them from being undercut by other operators which are infringing the licencing or taxation regimes.

 

Aviation incentives

The Government has prioritised Ireland’s aviation sector as a growth area, and is also keen to develop Irish airports as the sector undergoes transition. The Finance Bill provides new incentives to benefit the aviation sector, and promote the construction of new airport infrastructure.

 

For a period of five years from commencement, the construction of new aviation-specific facilities such as hangers, and teardown pads – special parking areas for aircraft being dismantled – will enjoy an accelerated capital allowance over seven years.

 

Minister Varadkar said: ‘These measures are designed to attract additional aviation sector businesses and jobs to Ireland and to encourage Irish and overseas businesses already located here to expand their operations. Although these incentives were originally proposed by the Shannon Aviation Business Development Task Force which was established by Minister Bruton and I, they are being made available to all airports in the State that wish to avail of them’.

 

Tourism accommodation

The 2011 Jobs Initiative prioritised tourism as a growth area, with strong results. This Finance Bill provides further measures, including incentives to invest and upgrade the standard of accommodation in the tourism sector.

 

“These new measures should assist the accommodation sector to find new investment for their businesses, keep jobs going and ultimately contribute to a positive experience for visitors to Ireland. Tourist accommodation is a large employer with an estimated 51,000 jobs in the hotel sector alone out of the overall tourism and hospitality employment figure of 185,000,” Minister Varadkar said.

 

Eligible hotels, guesthouses and self-catering accommodation will be included under the Employment and Investment Incentive Scheme (EIIS), which is being extended to the end of 2020. The EIIS allows qualifying investors to avail of a tax deduction as part of investing equity in certain SMEs. The inclusion of tourism accommodation will be reviewed after two years.

 

Real Estate Investment Trust

Following an information request by Minister Varadkar, the Minister for Finance has confirmed that hotels and other tourism accommodation will be eligible to participate in the Real Estate Investment Trust (REITs) regime. REITs can be attractive to holding structures where, for example, a hotel premises is owned as a rental investment asset by investors, and leased to a separate operating company who would engage in the taxable trade of hotel-keeping.

 

Increase in threshold for the cash receipts basis

Many small tourism businesses will benefit from the higher VAT threshold, which shall rise from €1 million to €1.25 million. This will give companies with a small turnover more time to pay VAT bills thus improving cash flow.