Restaurants Association of Ireland welcomes VAT retention at 9% in Budget 2015
RAI welcomes VAT decision, stating Budget 2015 gives much needed assurance of continued job creation
14 October 2014
The Restaurants Association of Ireland (RAI) today praised the government’s decision to retain the 9% VAT rate on tourism services in the Budget 2015 announcements. The association however is discontented by aspects of Budget 2015 that will have a negative impact on the restaurant sector.
Adrian Cummins, chief executive of the Restaurants Association of Ireland, said that: “In our Pre-Budget Submission, we set out objectives that we wanted met, namely the retention of VAT at 9% into 2015 which has been guaranteed. VAT at 9% into 2015 is crucial, not only to the sustainability of restaurants and businesses in the tourism sector, but also to job creation and regrowth for our economy.”
As outlined by Minister for Finance, Michael Noonan, in the Budget 2015 announcements, “this initiative is delivering”. The success of the lower rate of VAT is evident in the 34,052 new jobs that have been created since its introduction in 2011 and in the savings to the Exchequer of €699.72 million in the past three years.
The Restaurants Association of Ireland is pleased that government has not placed any further increases on alcohol excise, as the industry has felt the blunt of excessive increases in the previous two Budgets. This decision not to reverse excise on alcohol, however, is a missed opportunity to create further jobs and increase overseas tourism visits to the country. The high cost of alcohol when dining out is one of the main reasons tourists will not return to Ireland, therefore the RAI calls on the Government to reverse excise on alcohol in next year’s Budget in order to improve tourists perception of value and increase visitors to Ireland.
Chef training remains a priority for the restaurant industry and the association was disappointed to see that no training initiative was outlined in Budget 2015. RAI believes that in order to meet the demands of further tourism growth and job creation, investment in chef training should be given the utmost priority. Job positions are there but the skilled workforce are not. In its pre-budget submission, the Restaurants Association of Ireland proposed 1,000 apprenticeship places in the restaurant sector with participants allowed access to training allowances equal to those given to FÁS apprentices. The RAI calls on the government to focus on training in 2015 and points out that the Irish restaurant industry employs 72,000 people (one in four tourism jobs) and contributes €2 billion to the Irish economy each year.
Cummins said the budget that was delivered today would bring a mixed response from the industry. Positive gains from the VAT retention would be levelled out by the negative effects of failing to reverse excise duty.