RETAIL Excellence, Ireland’s largest retail representative organisation, said that there is an urgent need to reduce the 23% VAT rate in the face of a number of challenges to include Brexit, sterling devaluation, the 3% VAT differential between Ireland and the UK, retail volatility and a dip in consumer sentiment.
Retail Excellence’s Budget 2018 submission ‘’Retail: Sustaining and Growing an Economy’’ calls for an overall reduction in the rate of consumption taxes.
Deputy CEO of Retail Excellence Lorraine Higgins 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.
“Our priority is a reduction in the 23% VAT rate which was introduced as a financial emergency measure some time ago. Such moves are critical for the wellbeing of Irish retail and the Exchequer. We are witnessing an increase in consumers travelling north to shop with others buying over €14million 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.
“Consequently, we believe not only is a funding scheme or a Government provided loan scheme urgently required to make retailers online enabled but State agencies must also assist retailers’ journeys. The provision of supports which have been traditionally made available to manufacturing and processing companies like market, linguistics, logistics and network supports in other EU countries would help retailers develop new markets and drive sales while ultimately, leading to further employment within the digital realm”.