Over 21,600 jobs have been created in the food and accommodation sector since VAT on tourism-related services was reduced to 9%, according to the Restaurants Association of Ireland.
The association cited Central Statistics Office data, which shows accommodation and food services sector employment growing by 21,633 between the second quarter of 2011 and the first three months of this year.
The VAT rate was reduced from 13.5% in July 2011.
The RAI also said that a further 9,951 indirect jobs were created in other areas of the economy as a result of the VAT reduction, meaning a total employment rise of 31,584.
The association said these jobs had led to significant gains for the Exchequer, due to savings in social welfare payments as well as an increase in income tax take.
It also said that more tourists coming to the country felt they were getting good value for money.
The RAI has called on the Government to maintain the 9% VAT rate for the food and hospitality sector in the upcoming Budget.