Reduced VAT Rate Created 31k New Jobs, Claims Restaurants Assoc. Report
The Restaurants Association of Ireland (RAI) has published a report claiming the reduced VAT rat, introduced in July 2011, has created over 31,000 new jobs in the last three years.
The report, entitled ‘9% VAT – Food, Tourism & Jobs – Rebuilding Ireland’s Economy’, highlights the positive impact of the current 9% VAT rate, including over 21,000 new jobs directly in the hospitality and foodservice sectors.
Speaking about the launch of the report and the success of the reduced VAT rate, Adrian Cummins, Chief Executive of the RAI, said that: “As this report proves, in terms of creating new jobs in the food and accommodation sector, the introduction of the new VAT rate in July 2011 has been a major success. 31,584 new jobs have been created across the country, with 21,633 of these being direct jobs in the food and accommodation sector.”
The report uses national employment data from the Central Statistics Office and covers the direct and indirect number of jobs created, an estimate of social welfare savings as well as the increase in revenue for the Exchequer (e.g. PAYE, USC and PRSI Employer contribution) at a county and national level.
The Report demonstrates the considerable social welfare savings made by Exchequer using the model that “for every 10,000 people off the live register, and back in employment, it results in a net gain to the Exchequer of some €200 million”.
Tourism has also increased every year since the new VAT rate was introduced, with overall visits to Ireland rising by 17.82% since July 2011. There is further good news for Ireland’s tourism sector regarding Ireland’s Value for Money (VFM) rating as the number of visitors rating Ireland ‘good’ or ‘very good’ VFM has increased from 28% to 40% from 2009 to 2012 and the number of visitors rating Ireland ‘very poor’ or ‘poor’ for VFM has fallen sharply from 40% in 2009 to 16% in 2012.