Northern Ireland

Ryanair in travel tax row with the Irish government

A row has broken out between the Irish transport minister and Ryanair over the Republic's three euros travel tax.

It follows confirmation by Leo Varadkar that he will not abolish the tax as planned, until he gets solid commitments from airlines on how they will increase capacity.

Ryanair has rejected claims that it was not offering to commit to bringing in additional passengers.

The airline is due to hold a press conference later on Wednesday.

As part of its jobs initiative the Irish government announced that it would suspend the three euros travel tax.

Capacity

The move has now been put on hold.

Mr Varadkar said it had not been possible to secure solid commitments from airlines on inbound routes or capacity.

The abolition of the three euros travel tax was one of a number of proposals announced by the Irish government in May to help attract more tourists to the country.

VAT on restaurants, hotels, cinemas, theatres, sports fixtures and other attractions fell from 13.5% to 9% from 1 July.

The lower VAT rate will run until December 2013.

The government said it would be kept under review to make sure the savings are being passed on to the customer.

Newspapers, magazines, golfing fees and hairdressing also came under the new lower 9% VAT rate because of their links with the tourism industry.

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