THE VAT rate on restaurants, hotels, cinemas, newspapers and tourism-related activities falls from 13.5 per cent to 9 per cent from today.
A number of organisations representing businesses affected by the reduction – which also applies to theatres, hairdressers and golf clubs – said they expected their members would pass on the savings to consumers.
Taoiseach Enda Kenny said he expected businesses to reduce their prices in line with the reduction. “The industry had better understand that this is a situation where they must pass these reductions on to the customer,” he said.
Minister for Enterprise Richard Bruton said he would keep an eye on the impact the reduced rate had on sales and job-generation in the tourism sector.
The agency urged consumers to check if the prices they were paying for goods had been reduced. The reduction was one of the initiatives included in the Government’s jobs stimulus plan, which was announced in May. The rate will remain in effect until December 2012 and will be reviewed for the 2013 budget. There is no obligation on the industries to pass on the savings.
Adrian Cummins, of the Restaurant Association of Ireland, welcomed the development and said the organisation had instructed its members to pass on savings. “This is the first step in the road to recovery and we will continue to advocate for the abolition of joint labour committees and Sunday premium payments,” he said.
Mr Cummins said the savings would equate to a €1 reduction on a €25 meal in a restaurant. Fast food chain McDonald’s, which has 78 outlets in Ireland, said the price of products such as a Big Mac meal would fall by 25 cent from today
Tim Fenn, chief executive of the Irish Hotels Federation, said its members had also been asked to pass on the savings and said the organisation is pleased tourism is at the centre of Government plans for growth and recovery.
Frank Cullen, of the National Newspapers of Ireland, said the organisation had campaigned to have the rate reduced as the tax on newspapers was among the highest in the EU. The recommended retail price of The Irish Timeswill decrease to €1.85 on weekdays and to €2.15 on Saturdays.
The cost of making a call or sending a text message while overseas is to fall again from today. Roaming charges are to come down from 39 cent to 35 cent per minute (ex-Vat) for calls made while abroad and from 15 cent to 11 cent per minute for calls received. Receiving a voicemail message while abroad will be free.
