Download Restoring Competitiveness to Ireland`s Tourism Industry THE ROLE

 Restoring Competitiveness
to Ireland’s Tourism Industry
THE ROLE OF REDUCED VAT RATE
By Alan Ahearne February 2015 Restoring Competitiveness to Ireland’s Tourism Industry: The Role of Reduced VAT Alan Ahearne
February 2015
Summary
• Tourism has proven its potential to play a critical role in contributing to recovery in employment and the broader Irish economy over the last few years. The tourism industry had added more than 30,000 jobs since the VAT rate was reduced to 9%, accounting for more than one of every three net new jobs created in Ireland over this period. With international tourist arrivals projected to grow steadily and domestic consumer spending gradually recovering, there is huge potential for further employment growth in tourism across the country. • Competitiveness is key to a sustainable recovery in tourism. The reduced rate of VAT on tourism since July 2011 has provided crucial support to Ireland’s tourism industry. Tourism is a highly competitive, price‐sensitive sector and the reduction brought Ireland’s VAT rate on tourism in line with our main European competitors. The measure has resulted in lower prices and enhanced competitiveness, and thereby has contributed to increased tourism demand and significant growth in employment in the sector. • The benefits of the VAT reduction in terms of job retention and creation have exceeded expectations, while the cost to the Exchequer has been markedly lower than initially expected. The measure has proved to be a highly cost‐effective way of boosting competitiveness and employment. • The dynamic benefits to the tourism industry resulting from the measure have not received the attention they deserve. The additional revenues generated by the VAT reduction are being recycled in the industry on an ongoing basis to expand employment and increase investment in maintenance, refurbishment, renovation and innovation. This investment is critical for improving competitiveness and ensuring sustained growth in the industry. • The VAT reduction has contributed significantly to strong growth in tourism over the past few years. Looking ahead, competitiveness remains the key to sustained growth. There has been recovery in the tourism sector, spurred by the VAT reduction, but this recovery has not been uniform. If the industry is to continue to recover and create new jobs, Irish tourism will have to maintain and grow market share. The stimulus from the reduced rate of VAT remains hugely important to the viability and prospects for growth for the industry. 1 1. Introduction Tourism is a major component of the Irish economy, accounting for more than one out of every ten jobs in the country and 4% of Ireland’s GNP. The loss of competitiveness experienced by the industry during the bubble years rendered the tourism sector vulnerable to the domestic and external shocks that hit the Irish economy towards the end of the last decade. In May 2011, the Government announced a reduction in the VAT rate on tourism‐related activity from 13.5% to 9%. The VAT reduction measure was aimed at restoring competitiveness in the tourism industry by reducing costs. The objective was to boost activity in tourism and create additional jobs. This paper examines the effects of the VAT reduction on the tourism sector, and is organised as follows. Section 2 considers the economic challenges that faced the industry around the time of the introduction of the measure and the need for policy measures to support the tourism industry. Section 3 describes in more detail the reduced VAT rate measure and the Government’s reasons for maintaining the measure over the past few years. Section 4 includes a meta‐analysis of the economic effects of the VAT reduction based on a range of empirical studies. This section explores whether the VAT reduction was passed on to consumers; the effect on activity in the tourism industry; the effect on employment in the tourism industry; and the overall cost to the Exchequer of the measure. The evidence strongly suggests that the measure has been hugely successful, so Section 5 examines features of the tourism industry that may have contributed to that success. Section 6 concludes. 2. Economic backdrop: The need for measures to support the tourism industry The Irish tourism industry was particularly hard hit by the economic and financial crisis, from which the Irish economy is now emerging. The severity of the downturn in tourism reflected the combined effect of two different shocks that hit the industry simultaneously. The first shock stemmed from the severe retrenchment in discretionary spending in the domestic economy, as the wider economy plunged into deep recession and the Government introduced budgetary 2 consolidation measures to correct the public finances. In addition, Ireland’s tourism industry was hard hit by a drop in overseas visitor numbers, which in turn reflected a worldwide decline in international tourist arrivals in 2008/2009 amid recession in the global economy. Broadly speaking, the services offered by the tourism sector are ones for which demand tends to decrease more than proportionally as household income declines. Households under financial pressure tend to cut back sharply on discretionary spending, such as spending on holidays, dining out and socialising, in order to maintain expenditure on economic necessities and to meet debt‐servicing obligations. In addition, cash‐strapped businesses in a recession slash discretionary spending on items such as non‐essential travel and business conferences to reduce outlays, which also has a negative effect on the tourism sector. Figure 1: Irish household disposable income and spending (€, billion) 120
Consumer spending
Disposable income
100
80
60
40
20
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: Central Statistics Office. Figure 1 shows the boom and bust in overall consumer spending in Ireland over the past decade. Consumer spending (excluding purchases of homes) jumped 50% from €60 billion in 2002 to a peak of €90 billion in 2008. The spending boom was driven in large part by heady gains in households’ disposable (that is, after tax) income and optimistic expectations for future increases in income and asset prices. In turn, disposable income was boosted by unsustainable wage increases, 3 reductions in taxes and hikes in social benefits.1 During that period, many households also accumulated large amounts of debt to buy new homes. The bursting of the credit‐fuelled construction bubble and the global financial crisis exposed enormous imbalances in the Irish economy. Employment slumped and the unemployment rate surged to nearly 15%. Government revenues collapsed and a huge budget deficit emerged. The Government responded by cutting spending, including on public sector pay and social benefits, and hiking taxes to restore order to the public finances. As a result, household disposable income dropped €15 billion (about 15%) over the period 2008‐2012. The squeeze on incomes and the efforts of over‐indebted households to reduce debt levels depressed consumer spending, which plunged to below €80 billion in 2009 and in the following years from a peak of €90 billion in 2008. The contraction in consumer spending had a profound effect on many sectors of the Irish economy, and especially on tourism. As shown in Figure 2, tourism revenues dropped sharply during the crisis from a peak of about €6½ billion in 2007. Figure 2: Total tourism revenues* (€million) 7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
2009
2010
2011
2012
2013
2014e
Source: Fáilte Ireland and IHF. *Total revenues include foreign exchange earnings and domestic trips. 1
Both public and private sector pay rates rose rapidly during the boom. Reductions in income tax burdens were delivered though cuts in marginal tax rates, increases in tax credits and a widening of tax bands. As a result, the proportion of tax units exempt from income tax increased from 34 per cent in 2004 to 42 per cent in 2008. At the same time, the proportion paying at the higher marginal rate fell from 23 per cent in 2004 to just 16 per cent in 2008. Meanwhile, government spending on social welfare soared 160 per cent from €6.8 billion in 2000 to €17.8 billion in 2008. Source: National Recovery Plan 2011‐2014. 4 A key development that rendered the tourism sector and indeed the broader Irish economy especially vulnerable to such shocks was the loss of cost competitiveness experienced throughout the economy during the bubble years (Figure 3). The loss of competitiveness affected all sectors of the economy, but proved especially damaging to internationally traded sectors operating in highly competitive, low‐margin activities, like tourism. Figure 3: Measures of Irish competitiveness (1999=100)
Disimprovement
130
Nominal HCI
Real HCI
125
120
115
110
105
Imporvement
100
95
90
85
80
Source: Central Bank of Ireland. Having lost its competitive edge, the economy haemorrhaged jobs during the crisis. Successive governments responded with measures to try to support the tourism industry and other sectors, with an emphasis on initiatives to help the industry to bring down prices and the costs of doing business here in line with those of our main trading partners. 3. Reduced VAT rate: A radical policy measure to boost tourism and stimulate employment Against the challenging economic backdrop described in the previous section, the Government in May 2011 announced a reduction in the rate of VAT on tourism‐related goods and services, including restaurant services and hotel accommodation, from 13.5% to 9% as part of its 5 Jobs Initiative to boost employment.2 The new rate took effect from July 2011 and initially was due to expire at the end of 2013. In the event, the 9% rate was retained in both Budget 2014 and Budget 2015. The Government recognised the tourism industry as a critical, labour intensive indigenous sector that needed support to create and retain jobs. Announcing the VAT reduction, the Minister for Finance Michael Noonan described the objective of the measure: “The purpose of this targeted VAT relief is to boost tourism and stimulate employment in the sector and I am confident that it will give the tourism sector a much needed shot in the arm.” In subsequent Budget statements, the Minister explained the reasons for retaining the reduced VAT rate on tourism: “In recognition of the importance of the tourism sector to the overall economy and as a major source of jobs, I reduced VAT in this sector to 9% in the Jobs Initiative in May 2011. As I outlined earlier, this initiative has proved to be a major success, helping create over 15,000 new jobs as well as protecting existing jobs. As Deputies will be aware, the rate of VAT for the tourism and hospitality sector and the other sectors to which it applies is due to revert to 13.5% at the end of this year. However, it is important that we reinforce success when possible, so I have decided to continue the 9% rate of VAT for these vital sectors. This will support the increased number of jobs already in place and accelerate the creation of new jobs.” In his Budget 2015 statement, the Minister added: “Tourism delivers income and jobs in every town and city and to every corner of our country. The abolition of the air travel tax last year will result in over one million extra passengers 2
The 9% rate applies to restaurant and catering services, hotel and holiday accommodation and various entertainment services such as admissions to cinemas, theatres, museums, fairgrounds, amusement parks and sporting facilities. In addition, hairdressing and printed matter such as brochures, maps, programmes and newspapers are also charged at the 9% rate. 6 through additional capacity on many existing routes, as well as the introduction of new services. The reduced 9% rate of VAT on tourism related activities has been a great success and there are now an extra twenty three thousand employed in the sector since mid‐2011. This initiative is delivering and I am retaining the 9% VAT rate for these services.” The 9% rate undoubtedly has helped the Irish tourist sector to compete against other countries with reduced rates of VAT. Even still, many countries across Europe have similar or lower VAT rates on tourism. For example, as shown in Table 1, 15 European countries have the same or a lower VAT rate on hotel accommodation as Ireland at present. Table 1: VAT rates on accommodation European countries, 1 January 2015 Country Rate (%) Luxembourg 3 Switzerland 3.8 Belgium 6 Netherlands 6 Portugal 6 Greece 6.5 Germany 7 Malta 7 Norway 8 Turkey 8 Poland 8 Bulgaria 9 Cyprus 9 Estonia 9 Romania 9 Ireland 9 Country Rate (%)
Slovenia 9.5
Austria 10
Finland 10
France 10
Italy 10
Spain 10
Iceland 11
Latvia 12
Sweden 12
Croatia 13
Czech Rep
15
Hungary 18
Slovakia 20
U.K. 20
Lithuania 21
Denmark 25
Source: HOTREC member associations, KPMG TaxNewsFlash. 4. Economic effects of the VAT reduction: A Meta‐Analysis Several recent studies have examined the economic effects of the reduction in VAT on tourism. Although these studies explored different aspects of the policy measure, the empirical evidence presented in these papers can be pooled to address some of the key questions to evaluate the effects of the VAT reduction: 7 •
Was the VAT reduction passed on to consumers? •
What was the effect on activity in the tourism industry? •
What was the effect on employment in the tourism industry? •
What was the overall cost to the Exchequer of the measure? Was the VAT reduction passed on to consumers? Many of the studies point to the predictions of economic theory that a VAT reduction is likely to be passed on to consumers in a highly competitive industry such as tourism. Moreover, there is empirical evidence to support this hypothesis from studies of previous episodes of reductions in VAT on tourism in other European countries. For example, a 2007 European Commission report found that “the empirical evidence from major changes in VAT rates supports the conclusion that changes of VAT rates to a very large extent are passed on to consumers” (Copenhagen Economics, 2007). In Ireland’s case therefore, there were ex‐ante good reasons to expect significant pass‐through to consumers. In the event, the evidence indicates that the VAT reduction was in large part passed on to consumers, albeit with some time lag. •
Data on inflation from the Central Statistics Office show that in the twelve months following the VAT change, the rate of inflation for the items covered by the 9% VAT rate was 3.1 percentage points below overall CPI inflation. This gap widened to about 4 percentage points in the subsequent 12‐month period and has remained at around that level (Deloitte, 2014). •
Detailed counterfactual analysis found evidence of full or partial pass‐through in most categories. A Department of Finance paper concludes that the “9% reduced VAT rate appears to have had the desired impact” in terms of price pass‐through to consumers. (O’Connor, 2012) 8 •
Surveys of tour operators suggest that the “reduced VAT rate was fully reflected in prices from the time of its introduction.” (ITIC, 2013) What was the effect on activity in the tourism industry? Economic theory suggests that the reduction in prices to the consumer as a result of the VAT reduction would have lead to an improvement in the competitiveness of the Irish tourism industry. In turn, lower prices would have boosted activity in the tourism sector by increasing the number of tourists, both from overseas and domestic. In addition, since the price cuts were funded by reduced VAT and not by reduced margins, the VAT reduction would have boosted revenues (net of VAT) to the sector. As shown in Figure 4, the number of visitors from overseas increased in the February‐April period in both 2013 and 2014 compared with the same period a year earlier. More recent data show continued growth with the number of visitors from overseas increasing from 2.26 million in Q3:2013 to 2.44 million in Q3:2014, equivalent to an increase of nearly 8%. Figure 4: Overseas tourist arrivals in Ireland (000’s) 1,600,000
1,550,000
1,500,000
1,450,000
1,400,000
1,350,000
1,300,000
Feb ‐ Apr 2011
Feb ‐ Apr 2012
Feb ‐ Apr 2013
Feb ‐ Apr 2014
Source: CSO. How strong was the effect of the price cuts on the volume of tourist activity? This is ultimately an empirical question on which there is no clear consensus among the studies of effects 9 of the VAT reduction. The effect on volumes demanded of any change in prices depends on the so‐
called “price elasticity of demand” for tourism goods and services. Estimates of the price elasticity for Irish tourism vary across studies and across different tourism products: •
ITIC (2013) cite empirical estimates of price elasticity for Irish tourism in the range ‐0.6 to ‐
1.2.3 Callaghan and Tol (2013) estimate a range of between 0 to ‐1.1, with higher elasticity values for shorter trips. Divisekera and Deegan (2010) report a range of elasticity values between ‐0.1 and ‐0.7 for different tourism services and products. •
Durbarry (2008), using data for the UK tourist market, estimates a price elasticity of ‐2.0, meaning that tourism demand is very sensitive to price changes. Foley (2013) reports high price elasticity values for the restaurant sector. In framing this analysis in terms of estimates of price elasticity, it is important to note the argument by O’Hagan and Harrison (1984) that the appropriate measure of demand for tourism is not tourist numbers but rather tourist expenditures. After all, even if a reduction in prices has no effect on tourist numbers (that is, an estimated price elasticity of zero) but spurs existing tourists to purchase more goods and services when visiting, then activity would have increased as a result of the price cut. As Divisekera and Deegan (2010) put it: “This finding also lends support to the view that tourist demands are much more price sensitive than revealed from own‐price elasticities of demands.” In other words, estimated values for price elasticity tend to underestimate the effect on tourism activity of the VAT reduction. What was the effect on employment in the tourism industry? Given the labour‐intensive nature of the tourism sector, the increase in tourism activity as a result of the VAT reduction undoubtedly contributed to the creation and retention of jobs in the sector. As shown in Figure 5, the accommodation and food service sector added 21,000 jobs over the 3
A price elasticity of ‐1.2, for example, suggests that if tourism prices decrease by 1% in Ireland, then tourist arrivals will increase by around 1.2%, ceteris paribus. 10 period 2011:Q2‐2014:Q3 on a seasonally adjusted basis (or 25,300 jobs on a non‐seasonally adjusted basis) representing an increase in employment in that sector of 18.3 per cent.4 That sector alone accounts for more than one of every three net new jobs created in Ireland over this period. The wider tourism industry had added more than 30,000 jobs over the same period. Figure 5: Employment in accommodation and food service sector (000’s, s.a.) 140
135
130
125
120
115
110
105
100
Source: CSO Quarterly Household Survey. Previous studies have focused the effects of the VAT reduction on both the creation and retention of jobs in tourism. They have aimed to answer the question: How much greater is employment in the tourism industry than it would otherwise be as a result of the VAT reduction? This is important since other initiatives besides the VAT reduction, such as the Gathering, the Great Western Greenway and the Wild Atlantic Way have boosted the number of visitors to Ireland. •
ITIC (2013) report estimates of between 4,000 and 25,000 more jobs in tourism than there would have been in the absence of the VAT reduction, depending on what method is used. 4
The figures for jobs in the accommodation and food service sector significantly underestimates the number of jobs provided by the tourism industry, as it excludes jobs in other tourism activities such as passenger transport (railway, road, water and air), cultural and recreational activities, and tourism‐related retail trade. A more accurate measure of the contribution of the tourism industry to employment, based on the CSO’s Business Demography database and making an adjustment to include proprietors, casual and temporary workers, suggests that there are more than 200,000 people employed in tourism. 11 •
Tourism has significantly outperformed the overall economy in terms of growth in employment. The 18.3% growth in employment in the accommodation and food service sector since 2011:Q2 compares with a figure of 3.2% growth for the economy as a whole. The analysis in a number of studies attributes some of this remarkable outperformance to the impact of the VAT reduction. Using this approach, Deloitte (2014) estimate that the VAT reduction created or retained about 20,000 jobs in tourism, while the Department of Finance (2013) points to a net employment growth differential of 8%‐9% (roughly equivalent to 9,000‐10,000 jobs) up until Q2:2012. Consistent with these estimates, the Minister for Finance cited a figure of 15,000 jobs in his Budget 2014 speech. •
O'Sullivan (2013), in contrast, argues that the weak increase in tourism revenues in 2012 suggests that the measure had a muted effect on job creation. This conclusion does not appear to allow for lagged effects, however, which evidence from other studies suggest are important. •
The Hotel Barometer published by the IHF in February 2015 reports two out of three hotels and guesthouses taking on additional staff in 2014, with 86% of hoteliers saying that the Government’s decision to retain the 9% tourism VAT rate will assist them to take on further staff in 2015. What was the overall cost to the Exchequer of the measure? •
The Department of Finance in May 2011 estimated that the VAT reduction (on both tourism‐
related and non‐tourism‐related items) would cost the Exchequer €120 million in forgone VAT receipts in 2011 and €350 million in a full year. This was an ex ante estimate which, as ITIC (2013) notes: “allows for neither buoyancy effects nor for the effects of behavioural changes induced by the reduction in the VAT rate.” Based on the Department’s figure of €350 million, O'Sullivan (2013) argues that directly reducing the taxation of employment 12 would be more effective than the indirect method of lowering taxes on the consumption of goods and services that are labour‐intensive. •
In a similar vein, based on data on UK tourists to Ireland over the period 1996‐2010, Callaghan and Tol (2013) forecast that although the VAT reduction would boost the tourism industry, the expected cost to the Exchequer in forgone VAT receipts would mean that the costs to the country as a whole would exceed the benefits. In the event, ex‐post studies of the VAT reduction point to much lower‐than‐expected costs to the Exchequer of the measure. •
Deloitte (2014) present data showing that actual VAT receipts in the 9% categories declined €107 million in the first 12 months following the introduction of the reduced VAT rate, much less than the expected €350 million figure. Over time, the annual rate of decline eased markedly and by mid‐2013 had turned slightly positive. •
ITIC (2013) argue that based on data from the Revenue Commissioners, the Department’s initial figure of €350 million in a full year should in fact have been €160 million. When buoyancy effects are taken into account, the ITIC study estimates that the measure would cost about €100 million. However, when increases in tourism spending and in employment brought about by the VAT reduction are accounted for, the cost of the measure to the Exchequer probably turned out to have been considerably less. 5. Why has the VAT reduction been so successful? Before the introduction of the VAT reduction on tourism in July 2011, there were sound reasons, based on the empirical evidence available at the time, to expect that the measure would provide a reasonable boost to activity and employment in the tourism sector, but at a relatively high cost in terms of foregone VAT receipts for the Exchequer. Reflecting the uncertainty about whether the 13 measure would actually deliver, the Minister for Finance announced at the time that the change in policy would be assessed and the measure reviewed before the end of 2012. With the benefit of three‐and‐a‐half years of data on developments in the sector since the introduction of the measure, it is clear that the VAT reduction has been a huge success and the cost to the Exchequer has been much lower than anticipated. This raises the question: What is it about the tourism industry over the past few years that made the VAT reduction policy so potent? There are several features of Ireland’s tourism industry that likely contributed to the greater‐than‐expected success of the measure: •
The reduction in payroll costs forced on the industry in response to the economic and financial crisis was so severe than many businesses in the sector were left operating with skeleton staff levels. By adjusting payroll cost through reduced employee hours, businesses were able to survive the deep downturn in the sector, though the quality of the product on offer to customers was put at risk. When additional revenues began to accrue in the industry as a result of the VAT reduction, the large pent‐up demand for extra staff was suddenly unleashed.5 The labour‐intensive nature of the sector meant a large “bang for the buck” in terms of employment associated with the measure, as seen in the evidence presented in the previous section. •
Similarly, the industry responded to the crisis by sharply reducing spending on maintenance and refurbishment as well as on marketing. This retrenchment in investment spending allowed many businesses to survive the recession, but this underinvestment was unsustainable in an industry where the capital stock depreciates at a fast rate. There is evidence that the additional revenues and increased confidence generated by the VAT reduction are feeding into greater levels of investment. For example, the results of the latest 5
Not surprisingly, analysis based on linear models, such as those in some of the studies discussed in the previous section, is not capable of capturing these non‐linear effects. 14 Hotel Barometer from the Irish Hotels Federation show that 89% of hoteliers plan to increase investment in refurbishment and product development over the next 12 months, while 71% plan to increase their investment in marketing. These planned increases in spending come on the heels of reported large actual increases in capital investment in 2014. These features of the tourism sector meant that the VAT reduction has proved to be a highly cost‐effective way of boosting competitiveness and employment. Static v. dynamic gains from the measure The evidence on employment growth and investment plans suggest that additional revenues generated by the VAT reduction are being recycled in the industry to expand employment and increase investment in maintenance, refurbishment, renovation and innovation. Therefore, as well as the static gains to the industry from the VAT reduction that traditional economic models can attempt to quantify, there are also dynamic gains flowing from the measure on an on‐going basis that to‐date have not received the attention they deserve. 6. Conclusions The evidence reviewed in this paper strongly suggests that the VAT reduction has contributed significantly to strong overall growth in tourism over the past few years. The VAT reduction was a radical policy move that has proven to be successful in boosting tourism activity, employment and investment in the sector. Looking ahead, competitiveness remains the key to sustained growth. There has been recovery in the tourism sector, spurred by the VAT reduction, but this recovery has not been uniform. If the industry is to continue to recover and create new jobs, Irish tourism will have to maintain and grow market share. The stimulus from the reduced rate of VAT remains hugely important to the viability and prospects for growth for the industry. 15 References: O'Hagan, J., Harrison, M.J., UK and United States Visitor Expenditure in Ireland ‐ Some Econometric Findings, Economic and Social Review, 15, 1984, O’HAGAN, J. W. and M. J. HARRISON, 1984. “Market Shares of US Tourist Expenditure in Europe: An Econometric Analysis”, Applied Economics, Vol. 16, Callaghan, Niamh and Richard Tol, “UK Tourists, The Great Recession and Irish Tourism Policy”, The Economic and Social Review, Vol. 44, No. 1, Spring, 2013. Copenhagen Economics, “Study on reduced VAT applied to goods and services in the Member States of the European Union”, 21 June 2007. Deloitte, “Analysis of the Impact of the VAT Reduction on Irish Tourism & Tourism Employment”, Report for Fáilte Ireland, July 2014. Durbarry, Ramesh “Tourism Taxes: Implications for Tourism Demand in the UK”, Review of Development Economics, Volume 12, Issue 1, pages 21–36, February 2008. Divisekera, S. and Jim Deegan, “An Analysis of Consumption Behaviour of Foreign Tourists in Ireland’, Applied Economics, Vol. 42, No. 13, 2010. Foley, Tony, “Economic Impact of the Reduction of the VAT Rate on the Restaurant Sector”, Report commissioned by the Restaurants Association of Ireland, April 2013. Irish Tourist Industry Confederation (ITIC), “Lower VAT rate improves competitiveness, delivers jobs and helps tourism recover”, Pre‐Budget submission, July 2013. O’Connor, Brendan, “Measuring the Impact of the Jobs Initiative: Was the VAT reduction passed on and were jobs created?” Department of Finance, November 2012. O’Hagan, John and M.J. Harrison, “Market Shares of US Tourist Expenditure in Europe: An Econometric Analysis”, Applied Economics, Vol. 16, 1984. O’Sullivan, Cormac, “Budget 2014: The 9% Rate of VAT”, Publicpolicy.ie Report, November 2013. http://www.publicpolicy.ie/budget‐2014‐9‐rate‐vat/ 16