Tanaiste says shops can decide whether to pass on VAT cut

I know how difficult it is just to keep the doors open," said Taoiseach Leo Varadkar
Taoiseach Leo Varadkar

Finance Minister Paschal Donohoe denies "mixed messaging", stating that the government wants all retailers to pass on the VAT cut where possible



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28 July 2020

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In a recent RTE interview, Tanaiste Leo Varadkar said it was up to retailers whether they passed on the 2% reduction in the 23% VAT rate, which will apply from September.

“From my point of view, if I was going into a clothes shop today to buy a T-shirt or a suit or shoes, rather than a 2% reduction in the cost of that I would rather keep on the staff member,” Tanaiste Leo Varadkar said on RTE’s Today with Sarah McInerney show.

Finance Minister Paschal Donohoe had previously said the reduction should be passed on to consumers, but he denied that the government was sending “mixed messages” on the issue.

At a press briefing on the €7 billion July Stimulus package, Minister Donohoe said: “[We all] recognise the pressure that retailers are facing, that our shops are facing, at the moment. There are fewer customers coming into them.

“The Tánaiste was recognising that for some retailers that times are so hard at the moment if they were to (pass on) the full effect this could create a dilemma for them,” he continued.

“We want all retailers to pass on the VAT cut but we do recognise that for some retailers their situation is so precarious that they might pass some of it on to customers and keep some to retain their people employed,” Minister Donohoe added.



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