Retailers call for VAT reduction in Budget 2018
Retail Excellence has called upon the government to reduce the 23% VAT rate as a matter of urgency, in the face of several challenges facing the industry ahead of Budget 2018.
29 September 2017 | 0
The government must reduce the VAT rate of 23% as a matter of urgency, according to Retail Excellence. This will help in a number of challenges facing the industry, including Brexit, Sterling devaluation, consumer sentiment and more.
The group’s Budget 2018 submission “Retail: Sustaining and Growing an Economy” calls for an overall reduction in the rate of consumption taxes to ensure Irish retailers maintain a competitive edge against the backdrop of Brexit uncertainty.
Lorraine Higgins, deputy CEO of the organisation, said that Budget negotiations have been ongoing for some time. “However,” she said, “government needs to be receptive to retail’s challenges to include the ramifications of Brexit, most notably sterling devaluation, increased online spend being fulfilled by businesses operating outside Ireland and the volatility of retail trends which combined are making it increasingly difficult to forward plan.
“Our priority is a reduction in the 23% VAT rate, which was introduced as a financial emergency measure some time ago,” Higgins said. “Such moves are critical for the wellbeing of Irish retail and the Exchequer. We are witnessing an increase in consumers travelling north of the border to shop with others buying over €14 million online from businesses operating outside of Ireland every single day. In relation to online spend this amounts to a loss of €1.2 billion in VAT receipts per annum for the Exchequer and this is only set to rise if corrective action is not taken.”