The reduction on VAT rates that apply to restaurants,catering services, hotel and holiday accommodation, entertainment venues, as well as hairdressing and printed publications, that came into effect on Friday has been welcomed by the local business community.
The VAT reduction is aimed at boosting the tourism and service industry service sector and business have been urged to pas on the VAT cuts their customers.
The new lower rate of VAT came into force on Friday as part of the Government’s jobs initiative with the rate dropping from 13.5% to 9%.
The reduction will stay in place until December 2013, but will be reviewed before the end of 2012.
One of the groups to benefit from the cuts is hair salons but according to Jennifer Cullen of Letterkenny’s Alternative Hairdressing on the Kilmacrennan Road at Carnamuaggagh the cuts are welcomed but the savings must be passed on to the customer.
“Obviously the cuts must be passed on to the customers and it means it will be easier on their pockets. It will be better for everybody providing it is passed on. It is coming at a good time for us and that’s thing with hair, it something you have to get done every so often so it will be saving for people. If they come in every few weeks then at the end of the month or every two months there is a saving in their pocket,” Jennifer stated.
Donegal Spokesman for the Irish Hotels Federation, Michael Naughton, says with reduced foreign visitor number they have been experienced they hope the cuts will help boost the domestic holiday market.
He says the VAT reduction couple with a drive from the sector to win new customers he says many hotels are now offering “excellent” good value deals for families.
“This is huge for us and of course we welcome the announcement. It will give a boost to the tourism sector after the last number of years. The reduction means people who are going to visit hotels are going to get better value. Some of the offers going at the minute have been the best in years/ there is definitely better offers out there and its has definitely come at the right time for us to help boost our local businesses here in the county,” Michael said.
He says they are focusing on the domestic market but are hoping the numbers of foreign visitors will increase.
“We can see the domestic market picking up more than anything. What we have seen so far to date is that it has been a bit slow in the foreign visitor market but we hope that improves with some of the offers that are going now. At the moment a family of two adults and two children can get a couple of days for about 400 euro and that is exceptional value compares to a few years ago,” he added.