Restaurants Association of Ireland outraged by SIPTU’s call to reverse 9% VAT rate to 13.5% in upcoming budget.

SIPTU’S CALL TO REVERSE 9% VAT RATE IS ANTI-JOB CREATION ACCORDING TO RAI

October 9th, 2014, Dublin, Ireland.

The Restaurants Association of Ireland has called SIPTU’s proposal to reverse the 9% VAT rate back to its previous 13.5% in the upcoming budget a nonsensical statement that is completely anti job creation considering the resounding success the lower rate of VAT has been.

Since the introduction of the 9% VAT rate in 2011 the Irish Tourism Industry has seen 23,324 direct jobs created while 10,728 indirect jobs have been created bringing the total increase in employment since 2011 to 34,052.

Chief Executive of the RAI, Adrian Cummins said; “SIPTU have once again proved their removal from reality with their typical anti-job creation rhetoric. This call to reverse the VAT rate is directly hindering the creation of 50,000 jobs by 2020 which will be possible if the VAT rate is kept at 9%”

Restaurant employees are on the highest wages in Europe with a 38% turnover.  Adrian Cummins says “The benefits of the 9% Vat rate are clearly felt by the employees in the restaurant sector who are among the highest paid and most protected in the EU”.

According to SIPTU Divisional Organiser, John King, hotels and restaurants have failed to pass on the real benefits of the lower rate of VAT to its customers, employees or the exchequer. However a recent economic report published by the Restaurants Association of Ireland and compiled by economist Jim Power outlines that:

  • Between Q2 2011 and Q2 2014, direct employment in the Accommodation & Food Services sector increased by 23,324 from 114,904 to 138,228:
  • An additional 10,728 indirect jobs were created elsewhere in the economy, giving a total employment increase of 34,052;
  • The employer & employee payroll taxes resulting from this increase of 23,324 in direct employment was €111.07 million;
  • The number of people signing on the Live Register at a national level declined by 58,910 between June 2011 and July 2014
  • The increase in direct employment of 23,324 in the Accommodation & Food Services sector at a national level saved the Exchequer €699.72 million in social welfare payments

Since 2013 Fáilte Ireland, Deloitte, The Department of Finance and The Restaurants Association of Ireland have released reports which contradict entirely the stance of SIPTU with regards the current VAT rate’s significant benefits. “It is clear from all the statistics and reports that the 9% VAT rate must be kept” says Adrian Cummins, CEO RAI, “Doing as SIPTU have called for will hinder Ireland’s journey to solvency as well as the creation of quality jobs and the re-building of Ireland’s strong economy”

 

ENDS

For further information contact:

Adrian Cummins,

Restaurants Association of Ireland

11 Bridge Court, Citygate,

St. Augustine Street, Dublin 8.

 

Mobile: +353 86 8263311

Telephone: +353 1 6779901

Fax: +353 1 6718414

Email: info@rai.ie

Website: www.rai.ie

Twitter: @rai_ie

Facebook: www.facebook.ie/RestaurantsAssociationOfIreland

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