The Restaurants Association of Ireland (RAI) have launched a campaign to 'Keep VAT at 9%' at their annual conference, which was held at the Marker Hotel in Grand Canal Dock. VAT at 9% was introduced for restaurant and catering services on 1 July 2011until December 2012. The RAI, which represents 800 members, is now calling on the Government to retain the reduction due to the various benefits it has offered both to the hospitality trade and to the wider economy.
Describing the launch as a "Big day for industry and a big day for the Association", Adrian Cummins, Chief executive officer of the RAI pointed to the 'reversal of fortunes' that the VAT reduction brought about, noting that "In the past 18 months, over 10,000 new contracts were issued and this growth will continue with an additional 5000 jobs to be created over the next year if VAT at 9% remains in effect."
Cummins continued, "Reducing VAT to the level is a real success story so the RAI is sending a clear message to Government saying keep VAT at 9% […]. The message we will be sharing with the Minister is that the restaurant sector is a core tourist industry, accounting for in every four jobs, employing over 63,000 and contributing in excess of €2.5billion to the Irish economy - annually. "
"Keeping VAT at 9% benefits the entire economy and our industry will continue to create jobs, just as the Government hoped for when they introduced this measure."
Speaking at the launch of the campaign, Anthony Foley of DCU's Business School noted that at least 1000 jobs had been directly created in the restaurant sector because of the fiscal measure. However, he pointed to a serious lack of joined-up thinking by the Government when it came to the hospitality sector: . “The Government brought in the nine per cent VAT rate basically to help the hospitality sector but in the meantime it increased the general rate of VAT from 21 to 23 (per cent) which affects alcohol serving in restaurants. In addition it increased the excise rate on alcohol particularly in wine, by over 40 per cent,” he said.
“So in fact paradoxically if the Government didn’t maintain the nine per cent VAT rate in 2014, it would leave the restaurant sector worse than it was before it introduced the nine per cent rate in July 2011.”
Describing the 2011 initiative as 'imaginative', Foley noted that "Anything the Government can do it should be doing […] We have to build up the employment capability of the economy."
He stated, "My basic recommendation is we should keep on with the 9% for the next two years"
