Galway lobby says VAT rate cut is recipe for success

Galway has been one of the biggest beneficiaries in the country of the special VAT rate for the hospitality sector, with almost 1,750 jobs created in the industry over the past three years.

According to a new report from the Restaurant Association of Ireland – as part of a lobbying campaign to retain the reduced 9% rate in the upcoming Budget – 1,203 extra jobs were created in the food, tourism and hospitality sectors between July 2011 and the beginning of this year.

And the body has said a further 546 jobs have been created indirectly in the city and county during that period, bringing the total to 1,749.

It also believes that when the VAT rate was reduced from 13.5%, up to sixty local restaurants were saved from closure in the space of two years.

Other key findings of the report on Galway found that the total numbers employed in the accommodation and food services in early 2014 was 7,502, with a gross annual wage bull of almost €174 million.

The group stressed the sectors’ contribution to the Exchequer, with €17m in employee taxes and €18.7m in employer PRSI contributions.

Adrian Cummins, Chief Executive of the RAI said: “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 driver of local employment growth.”

“1,203 new direct jobs have been created in Galway alone, with 21,633 new direct jobs created across the whole country,” he added.

See full story in this week’s Connacht Tribune.