Reduced VAT rate results in over 900 new jobs in Carlow since it was introduced in 2011

Restaurants Association of Ireland urge government to retain 9% VAT rate

Darren Hassett

Reporter:

Darren Hassett

Email:

news@carlowlive.ie

Restaurant Association says 9% VAT rate created 2,349 new jobs  in Donegal

Liam Edwards, President of the RAI and Adrian Cummins, CEO of the RAI

A report published by the Restaurant Association of Ireland (RAI) has revealed that 959 new jobs in the accommodation and food services sector have been created in Carlow since the introduction of the reduced VAT rate of 9% in 2011.

This report identifies the "direct and indirect employment associated" with the introduction of the reduced VAT rate and that employment in the sector in Carlow increased by 657 between Q2 2011 and Q1 2018.

Indirect employment as a result of the change in direct employment in the sector is estimated at 302.

The Restaurants Association of Ireland today is urging Government to retain the VAT rate for the tourism and hospitality industry as they believe it has improved the competitiveness of the sector, while ensuring the viability of many small businesses that have been going through challenging times. 

The RAI is asking Minister for Finance and Public Expenditure, Paschal Donohoe T.D, not to return the VAT rate to 13.5%.

In Q1 2018, it is estimated that 2,053 workers were employed directly in the Accommodation and Food Services sector in County Carlow. The total gross annual wage paid to those workers was €47 million. 

The total net annual wage paid to those workers was €42 million. The payroll taxes accruing to the Exchequer from this employment was €10.5 million.

Indirect employment as a result of direct employment in the sector is estimated at 944. 

Total employment in the Accommodation and Food Services sector in County Carlow increased by 657 between Q2 2011 and Q1 2018. The total gross annual wage paid to those extra workers is €15.2 million.

The total net annual wage paid to those extra workers is €13.5 million. The payroll taxes accruing to the Exchequer from this extra employment is €3.4 million. 

Indirect employment as a result of the change in direct employment in the sector is estimated at 302. 

Speaking about the success of the reduced VAT rate in recent years, Adrian Cummins, Chief Executive of the Restaurants Association of Ireland, said: “In terms of creating new jobs in the hospitality sector, the introduction of the 9% VAT rate in July 2011 has been a major driver of local employment growth.

"In Q1 2018 alone,171,700 workers were employed directly in the accommodation and food services sector and the total gross annual wage paid to those workers was €3.98 billion.

"Total employment in the accommodation and food services sector has increased by 54,400 people between Q2 2011 and Q1 2018. The impact the reduced VAT rate has had on this growth cannot be underestimated.”