Restaurants in Ireland have been urged to pass on the savings from the new lower rate of VAT in the country of 9% to customers. The Restaurants Association of Ireland said that the change in the VAT rate for restaurant from 13.5% to 9%, which will remain in effect until December 2012, would have a “great knock-on effect” for businesses in the sector. The association said it had instructed member restaurants to pass the reduction on to consumers in the form of lower prices. It also said that the new rate was one step in building a more competitive market, which will also support employment growth within the sector. The new 9% rate will remain in effect until December 2012 but will be reviewed in the 2013 Budget. The association said it wanted to ensure that this new VAT rate will not be just a ‘once-off’ and that it will remain in force after 2013. Adrian Cummins, chief executive of the Restaurants Association of Ireland said, “We are very pleased the Government has taken those steps to reduce VAT rate with the aim of making Ireland more competitive to do business and attract more tourists to the country. This is the first step in the road to recovery in the restaurant sector in Ireland and we will continue to advocate for the abolition of the Joint Labour Committees and Sunday Premium Payments.” The Irish Restaurant industry employs 64,000 people (1 in 4 tourism jobs) and contributes €2bn to the Irish economy each year.