VAT increase unlikely to hit demand and employment in hospitality sector

A new report indicates demand and employment in the hospitality sector is unlikely to be affected by an increase in the VAT rate.

The rate was cut from 13.5% to 9% in 2011 during the recession to boost the sector.

The Department of Finance study on the reduced VAT rate says it has met its objective.

Patricia King, General Secretary of the Irish Congress of Trade Unions, says there's little to be gained from continuing with the lower rate.

"The amount of money involved here is about half a billion euro per annum," she said.

"The report underpins that there's little to be gained now from continuing this reduction for anybody other than the players in the industry."