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RAI Welcomes 9% VAT in Budget 2014

Published on Oct 16 2013 9:58 AM in Restaurant

RAI Welcomes 9% VAT in Budget 2014

The Restaurants Association of Ireland (RAI) welcomes a Pro-Jobs and Pro-Tourism Budget 2014.  The RAI were happy with Michael Noonan’s decision to retain the 9% VAT rate on tourism in the Budget 2014.

Chief Executive of the Restaurants Association of Ireland, Adrian Cummins said that “In our pre-budget submission, we set out objectives that we wanted met, and we believe that most of these have been met today. Retention of VAT at 9% into 2014 is something crucial to the sustainability of restaurants and indeed businesses in the tourism sector throughout the country.”

“We stressed that Budget 2014 needed to be a Pro-Jobs Budget.  The Government got it right by retaining the reduced VAT rate. The retention of VAT at 9% for 2013 is a huge coup for the tourism sector. Given that the sector created 15,000 jobs since its introduction in July 2011, and a further 5,000 jobs are expected to be created as a result of its retention over the next 12 months – this is the correct decision by Government. VAT at 9% keeps Irish tourism competitive, attracts overseas visitors and, most importantly, encourages people to spend their money in Ireland on Irish goods and services.”

 The RAI said they owe a big thank you to Leo Varadkar T.D. and Michael Ring T.D. for supporting the ‘Keep VAT at 9%’ campaign'. The RAI also welcomed the disposal of the Airport Departure Tax, which will optimise tourism growth and development.

However there will be an increase in Excise Duty on restaurants. This strikes when consumer spending is flat. Excise duty grew by 41% in Budget 2013. A further increase of 50cent on a 75cl bottle of wine, will prove difficult for restaurants in wine-trading. This move doesn’t tackle the below-cost selling of alcohol in supermarketsand off-licenses as the RAI requested in their Pre-Budget 2014 submission.

President the of RAI, Pádraic Óg Gallagher, says that “The Government have seized an opportunity to build on momentum gained through increased tourism numbers during this year of the Gathering. We’re delighted that the Government have seen the positive effect that the 9% VAT rate has had on our industry and we will continue to build on this tourism growth in 2014.”

The Irish restaurant industry employs 64,000 people (1 in 4 tourism jobs) and supplies €2 billion for the Irish economy every year.

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