New 9% VAT rate means €1 reduction in restaurant meals

A new reduced VAT rate of 9% comes into force today. It will apply to restaurants, theatre tickets, hairdressing and to printed material including newspapers and magazines.

The Taoiseach has warned tourist providers to ensure they pass it on the new rate in lower prices to consumers.

"The industry had better understand that this is a situation where they must pass on these reductions to the customer," he said.

The previous rate of VAT applying to the sector was 13.5%. The reduction will stay in place until December 2012 before it comes up for review.

CEO of the Restaurants Association of Ireland Adrian Cummins said the VAT reduction is just the first step in the right direction.

"A customer paying €25 for a meal should be paying about €24 for a meal as of today," he said, describing this as "a huge bonus" for the under-pressure restaurant sector.