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Irish VAT Cut Helped Our Industry, Restaurateurs Say

by Jason Gorringe, Tax-News.com, London

28 August 2014


21,633 jobs have been created in the food and accommodation sector since the 9 percent value-added tax rate (VAT) for the hospitality sector was introduced in 2011, according to the Restaurants Association of Ireland (RAI).

A new report from the RAI, 9 Percent VAT – Food, Tourism & Jobs – Rebuilding Ireland's Economy, highlights the positive impact of the initiative. It shows that an additional 9,951 indirect jobs were created elsewhere in the economy, giving a total employment increase of 31,584.

The RAI also claims that the Exchequer was able to make EUR433m (USD571m) in social welfare savings as a result of the boost to direct employment in the sector. In addition, these new jobs generated an extra EUR103m in Universal Social Charge and employee and employer pay-related social insurance revenues.

Since the rate cut, there has been a 17.82 percent increase in overall visits to Ireland.

Fine Gael TD and member of the Oireachtas Committee on Tranport and Tourism, Patrick O'Donovan said: "The decision by Michael Noonan to reduce VAT in the tourism sector from 13.5 percent to 9 percent together with his decision to reduce the travel tax to 0 percent, are having a very positive impact on the hospitality industry."

TAGS: VAT rates | tax | economics | value added tax (VAT) | Ireland | tax incentives | fiscal policy | budget | travel and tourism | food | ministry of finance | tax authority | tax rates | revenue statistics | tax reform | trade association | trade

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