Dáil debates

Wednesday, 15 June 2016

Priority Questions

VAT Rate Application

2:45 pm

Photo of Pat BreenPat Breen (Clare, Fine Gael) | Oireachtas source

I thank Deputy Quinlivan for his question.

The setting of VAT rates is a matter for the Minister for Finance. In July 2011, the VAT rate for tourism related goods and services was reduced from 13.5% to 9% by the Government as part of a measure to promote job creation. This incentive for job creation was due to expire at the end of 2013 but the measure was retained in budgets 2014 and 2015 owing to its positive impact on the sector.

Between the second quarter of 2011 and first quarter of 2016, direct employment in the accommodation and food services sector increased by 28,000, from 114,400 to 142,400. While it cannot be claimed that the reduction in the VAT rate has been the only factor driving employment in the sector, it has made a significant contribution and has had a very positive impact on the competitiveness of the tourism product.

Ireland has a robust suite of employment rights legislation to protect all workers, including minimum wage legislation. These rights apply across all sectors. Other wage setting frameworks include joint labour committees, registered employment agreements and sectoral employment orders which are underpinned by recent legislation. Engagement in these frameworks is voluntary on the part of the stakeholders concerned.


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