Ireland's tourism industry is to be handed a boost by the country's government, after plans to reduce the tax burden on the sector were revealed by finance minister Michael Noonan.

Between 2007-2010, Ireland has posted a 25 per cent cumulative decline in visitor numbers, with tourism and travel-related earnings for the same period falling by around 30 per cent. In his speech, Noonan announced a raft of measures that are designed to reverse the decline and "capitalise on the potential" of the Irish tourism sector to encourage economic growth.

VAT rates on tourism products, including theatres, cinemas, amusement parks and sporting facilities, have been reduced by Noonan from 13.5 per cent to 9 per cent. The new rate will also apply to hospitality businesses such as restaurants, hotels and holiday accommodation; a move welcomed by the Restaurants Association of Ireland (RAI).

RAI chief executive officer Adrian Cummins said: "It is a sensible approach to have a meaningful VAT reduction of a targeted nature, rather than a very small cut spread more thinly." Elsewhere, Noonan revealed that the €3 (£2.60) air travel tax is to be abolished, subject to an agreement with airlines to bring in additional passenger numbers to the country.

Noonan said the policy - along with the reduction in VAT rates - would be revisited in 2012 in order to evaluate its success in stimulating the tourism industry. Meanwhile, visitors looking to travel to Ireland and holding a visa allowing entry to the UK will not have to apply to the Irish government for a separate visa.

It is hoped the measure will enable Ireland to "capitalise on the hundreds and thousands of visitors who will be travelling to the London Olympics next year". Ryanair spokesperson Stephen McNamara said: "[The] decision to scrap the tourist tax is a welcome move by the new government towards change and reform of Irish tourism."

Image: Andrei Nekrassov/shutterstock.com