Keeping 9% vat rate vital for border after Brexit vote

THE 9% vat rate on hospitality has been vital to rejuvenating the sector along the border, directly creating 831 new jobs over the last few years, according to a new report.

The report by the Restaurants Association of Ireland (RAI) entitled ‘9% VAT – Food, Tourism and Jobs’ assessed the impact of the introduction of the new VAT rate in July 2011, when it was reduced from 13.5% to 9% for tourism related services and goods.

Adrian Cummins, RAI Chief Executive said maintaining the lower rate was vital, particularly after the vote by the UK to leave the European Union

‘Given the uncertainty around Brexit there are no certainties, but the risks to Irish tourism from a sharp slowdown in the UK economy and weaker sterling are clear.’

‘Against this background of intense uncertainty for the Irish economy in general and the Accommodation and Food Services sector in particular, it would not make sense to increase the VAT rate applying to the sector, given the extra vulnerability that has arisen from the Brexit vote.’

The report, which highlighted how the lower rate has benefitted the sector showed that along with the 831 jobs directly created in Louth, there were 382 indirectly created. The job creation also resulted in €16.6 million social welfare savings from employment in the hospitality industry.