RAI Calls For 9% VAT To Be Maintained

By Dave Simpson
RAI Calls For 9% VAT To Be Maintained

The Restaurants Association of Ireland (RAI) has launch its pre-budget submission 2019 which features a plan that the association believes will sustain jobs, maintain competitiveness and deliver certainty for the restaurant and tourism sector.

RAI cheif executive Adrian Cummins commented, "Brexit is the hospitality industry’s most immediate threat in 2018 and that danger will follow into 2019. We must retain measures such as the 9% VAT rate to allow businesses remain competitive while we continue to measure the potential damage that Brexit could introduce to the industry."

The RAI believes the VAT rate of 9% must be retained until 2022 and asserts that since the VAT cut, 54,400 jobs have been were created in tourism and restaurants. Cummins warns that it is critical that the reduced VAT rate is kept in place for until 2022 in order for the Irish economy to remain competitive.

He stated, "When the economy went into decline, restaurants endured falling numbers of diners, rising prices and great financial uncertainty, with many having to close their businesses. Money generated by this reduced VAT rate, however, has kick-started a reversal of fortunes. Since the VAT cut, employment in the restaurant and tourism sector increased by approximately 54,400 direct jobs with an additional 25,024 indirect jobs which gives a total employment increase of 79,424. This growth will continue if VAT at 9% remains in effect."


Cummins continued, "Restaurateurs are entrepreneurs; the government needs to be reminded of that. When a restaurant opens or expands, they will create several jobs and generate business for the area and their suppliers. Restaurants all over Ireland are relying on the VAT to remain at 9% for the survival of their business."


The RAI is calling on the Department of Finance to make decisions about the current Irish tourism VAT rate, not based on what can be recouped in VAT revenue, but in terms of the revenue that can be gained from overseas tourism as a result of a competitive VAT rate. A key figure from Failte Ireland 2017 Tourism Facts for consideration is that there is 23c in every euro going back to the Exchequer in direct tourism related taxes.

© 2018 Hospitality Ireland – your source for the latest industry news. Article by Dave Simpson. Click subscribe to sign up for the Hospitality Ireland print edition.