The Irish government has confirmed it will retain the lower 9 per cent VAT rate on tourism products throughout 2012 in a bid to continue supporting the sector's recovery.

Introduced this year as part of the Jobs Initiative, the reduced rate is designed to help Irish-owned hospitality and leisure firms whose services and products are "home-grown".

Transport, tourism and sport minister Leo Varadkar has now told the Good Food Ireland conference in Dublin that the government would retain the 9 per cent VAT rate next year.

Varadkar said: "The vast majority of hotels, restaurants and leisure businesses are Irish-owned and any profits stay in Ireland. The lower VAT applies to these domestic businesses whose services and products are home-grown.

"It has been very successful in boosting the tourism industry, which is showing good signs of recovery, and in creating jobs."