Back in July 2011 a lower rate of VAT (9%) was introduced certain goods and services to try and boost the tourism sector . (The 9% VAT rate applied to restaurant and catering services; hotel and holiday accommodation; admissions to cinemas, newspapers etc).
Prior to July 2011 – the rate of VAT on these type of items was 13.5%. The full rate of VAT is currently 23%.
This cut from 13.5% to 9% was introduced as a temporary measure – and it is due to end in December 2013. There is a campaign by the tourism and restaurant sector to retain the 9% VAT rate. The Restaurants Association of Ireland (RAI) is planning a series of events over nine days to raise awareness of the issue and to lobby politicians for it’s retention ahead of the Budget. They say the restaurant sector is a core 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
This week the Minister for Tourism Leo Varadkar said he wants the 9 per cent VAT rate retained in the 2014 budget, saying that the sudden withdrawal of the rate could “do real harm”.