Restaurateurs plan nationwide lobby to keep lower VAT rate

Restaurant owners have urged the Government to keep the 9 per cent rate of VAT on food and tourism services as a matter of priority in next month’s Budget.

The reduced rate was introduced in 2011 to boost job creation in the recession-hit hospitality sector.

The Restaurants Association of Ireland (RAI) is planning a series of events over the next nine days to raise awareness of the issue and to lobby politicians for its retention ahead of the Budget.

The association said it was vital the VAT rate was kept in place for 2014 and beyond, in order for the Irish economy to remain competitive.

As part of the campaign, local restaurateurs will be visiting TD constituency offices around the country. The RAI is also planning "an awareness event" outside the Department of Finance on Thursday.

The association said that since the introduction of the VAT cut, employment in the restaurant and tourism sector had increased by approximately 9,000.

It also claimed the money generated from the reduced rate was being passed directly through to the consumer.

RAI chief executive Adrian Cummins said: "When the economy went into decline, restaurants endured falling numbers of diners, rising prices and great financial uncertainty with many facing and/or experiencing closure. Money generated by this reduced VAT rate, however, has kick-started a reversal of fortunes.

Since the VAT cut, employment in the hospitality sector increased by about 9,000 and this growth will continue with an additional 5,000 jobs to be created over the next 12 months if VAT at 9 per cent remains in effect, according to Mr Cummins.

“Visitor numbers released in August 2013 point to a positive future for our sector. We are confident that with the retention of VAT at 9 per cent, our sector will continue to grow and create jobs.”

“VAT at 9 per cent is working and these 9 days of action is about sending a clear message to politicians and consumers that it’s working, therefore keep it in place.”

He said the restaurant sector was at the core of tourist industry, accounting for one in every four jobs, employing over 63,000 and contributing in excess of €2.5 billion to the Irish economy annually.

“A longer term commitment to VAT at 9 per cent will allow businesses to plan will be good for food, tourism and jobs,” he said.