Simon Harris (Wicklow, Fine Gael)
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213. To ask the Minister for Finance the estimated benefit to the overall economy, the hospitality sector and to the employment sector of the 9% VAT rate for tourism, hospitality and entertainment sectors; and if he will make a statement on the matter. [28021/13]

Michael Noonan (Limerick City, Fine Gael)
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With regard to numbers employed in the tourism sector, research to this effect was carried out by my Department and published in the Medium-Term Fiscal Statement in November 2012. This report, entitled “Measuring the impact of the Jobs Initiative: Was the VAT reduction passed on and were jobs created?” contains detailed information with regard to the impact of the 9% VAT rate on prices and employment numbers, and is available on my Department's website. Using statistics from the Central Statistics Office, the report indicates that an additional 6,200 jobs had been created in the accommodation and food sectors from Q2 2011 to Q2 2012, an increase of 6%. While there are other factors that will have impacted on employment rates in these sectors, I am in no doubt that the 9% VAT rate has contributed in no small part to these employment gains. Furthermore, these figures may understate the positive impact of the 9% rate, as other comparable sectors experienced declines in employment number over the period concerned, which indicates that employment in the accommodation and food sectors may also have declined without the introduction of the 9% rate. With regard to prices in the tourism sector, the response to the 9% VAT rate has been positive and the report indicates that the VAT reduction was for the most part passed on to consumers. With regard to the impact of the 9% on tourism, while tourism numbers fluctuated over the period since the introduction of the 9% in July 2011, expenditure by overseas travellers to Ireland in 2012 increased by €37 million from 2011; this excludes transport and air travel costs which are exempt from VAT.