A recent report from the Restaurant Association of Ireland (RAI) revealed that 2,399 new jobs in the housing and food services sector have been created in County Wicklow since the introduction of the reduced VAT rate of nine percent in July 2011.
This report identifies direct and indirect employment related to the introduction of the reduced VAT rate. Between Q2 2011 and Q1 2018, the number of people working in the housing and food services sector rose by 54,400 nationwide, bringing total employment from 117,300 to 171,700 on a seasonally adjusted basis.
The RAI urges the government to retain the tariff because they believe it has improved the competitiveness of the sector while ensuring the viability of many small businesses in difficult times. The RAI asks Minister of Finance and Public spending, Paasdoen Donohoe not to reduce the VAT rate to 13.5 percent.
In the first quarter of 2018, an estimated 5,136 employees were put to work directly in the County Wicklow sector. The total annual gross salary paid to those employees was € 119 million. The total net annual wage to these employees was € 105 million. The income tax of the Treasury on this employment amounted to € 26.2 million. Indirect employment resulting from direct employment in the sector is estimated at 2,363.
Total employment in the housing and food services sector in County Wicklow increased by 1,643 between Q2 2011 and Q1 2018. The total annual gross salary paid to these additional employees is € 38 million. The total net annual wages paid to those additional employees is € 33.7 million. The payroll taxes that the Treasury receives from this additional employment amount to € 8.4 million. Indirect employment resulting from the change in direct employment in the sector is estimated at 756.
Speaking of the success of the reduced VAT rate in recent years, said Adrian Cummins, Chief Executive of the Restaurants Association of Ireland: & # 39; Regarding the creation of new jobs in the hospitality industry, the introduction of the nine percent VAT rate in July 2011 was an important driver of local employment growth. & # 39;