A new report from the Restaurants Association of Ireland (RAI), has claimed that the reduced VAT rate, has created over 31,000 new jobs in the last three years.
The VAT rate that was introduced in July 2011, sits at 9%, which the RAI believes has had a positive impact on Ireland’s economy.
Speaking about the launch of the report and the success of the reduced VAT rate, Adrian Cummins, Chief Executive of the Restaurants Association of Ireland, said; “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 examines 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.
It 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 found that considerable social welfare savings were 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”.
Viewed on a national basis, the Exchequer made a €433m in social welfare savings as a result of the 21,633 direct jobs created since the VAT rate was reduced.
It also noted that 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 has also been strong growth in the number of overseas visits to Ireland.
According to the CSO figures overseas visits to Ireland grew by 10.3% overall in the period from January to June 2014 when compared to the corresponding period of 2013.
More information on the report can be found on the RAI website here, where you can also download it in full.
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