RETAIL Excellence the largest retail representative body in Ireland is calling on the Government to reduce VAT by 3% in Budget 2018 to protect retailers from the worst excesses of Brexit.
In their Budget 2018 submission titled “Retail: Sustaining and Growing an Economy”, Retail Excellence are calling for a general cut in consumption taxes, the cost of doing business, increased funding to get retailers online, increased infrastructural investment, Garda resources, town renewal funding, investment in the Home Renewal Scheme, introduction of measures to increase our competitiveness, and improved access to finance in the upcoming Budget.
Spokesperson for the organisation Lorraine Higgins said: “With external headwinds like Brexit and the limping on of negotiations between the UK and the EU, Ireland is already left exposed and this will impact on the sustainability of economic growth trends.
“While many industries talk about the potential impact of Brexit, it is clear retail is already being affected. Our quarterly Trading Reports compiled in conjunction with our partner member, Grant Thornton, have recorded three successive quarters of decline primarily as a consequence of sterling devaluation and a migration to online shopping. Therefore, it is critical measures are implemented to counteract the foregoing and Retail Excellence’s Budget 2018 proposals are formulated to deal with these challenges.
“Our priority issue is a reduction in the 23% rate of VAT which was introduced as a financial emergency measure. It needs to be cut by 3% in one fell swoop as we believe incremental reductions would be a piecemeal response given previous experience has shown small reductions do not tend to have a positive impact on consumer spend.
“High VAT rates impact on consumer confidence and sentiment which is exacerbated further by the negative VAT differential between us and the UK. This has contributed to the further development of online shopping trends which has led to e600,000 of spend every hour being fulfilled by businesses operating outside the country.
“It goes without saying, our unique geography exacerbates this situation further. This leak of spend to the UK predominately is hurting Ireland, is unsustainable and will cause retail failure if adequate Brexit-proofed measures are not implemented in Budget 2018.
“On the other-hand, we can also benefit from the huge online spend by European consumers in 2017 of €598billion. Consequentially, it is essential a Strategic Retail Support Unit is established and funded which should be a collaboration between various Departments to include Jobs, Communications, Education and State Agencies which would support and assist retailers from a network, logistics, linguistics and education perspective when they seek to diversify into other European Asian and American markets.
“We at Retail Excellence are focused on assisting retailers grow, thereby increasing sales, employment opportunities and ultimately return to the Exchequer. Our Budget 2018 submission seeks to provide a clear set of proposals which we feel are critical to ensure further economic and employment growth for the betterment of all of Ireland.”