A leading economist has published the findings of a report that outlines the real damage proposed tax changes will have on the retail and tourism sectors in Clare and which urges the Government to urgently rethink its proposals.
The current Retail Export Scheme allows non-EU tourists to claim VAT refunds on quality Irish craft and gift items purchased in Ireland. The existing scheme supports small retailers in Clare and encourages local craftspeople and designers.
However, the Government’s Brexit Omnibus Bill 2020, currently moving through the Oireachtas, will exclude all purchases under €175 from the scheme. This means that a tourist in Clare will have to spend at least €175 on a single purchase to avail of a VAT refund.
As almost 85% of refunds under the current scheme are purchases less than €175, the Government is scrapping the scheme for retailers who do not sell high value goods. Many of the retailers in Clare who avail of the scheme are small, family run businesses who do not sell high value items.
The Bill also introduces heavy restrictions on the use of the scheme for visitors from the UK.
According to economist Jim Power; ‘’The Retail Export Scheme contributes €108.1 million to the economy, with a large proportion of this spent outside of Dublin. The proposed new legislation will risk many jobs in Clare and will put people out of business. It is crystal clear that economic activity, employment and the overall health of the retail and tourism sectors in Clare are at risk. Introducing the €175 limit on the Retail Export Scheme would undermine competitiveness and decimate the Irish tourism and retail sectors, particularly along the Wild Atlantic Way.’’
Jim Power went on to say; ‘’The tourism and retail sectors in Clare have been decimated by COVID-19 and they face a very challenging future. They need as much support as possible over the coming years. Increasing the Retail Export Scheme threshold to €175 would not represent support, and it would totally fly in the face of the ongoing efforts to promote Irish tourism.’’
An alliance of independent retailers and tourism businesses across Ireland have launched a campaign on the issue. A spokesperson for the ‘Stop Another Tourism Tax!’ campaign said; ‘’We are days away from Brexit and the Government is currently on a collision course with the retail and tourism sectors. Not only have the sectors been decimated by COVID-19, they are lining up another body blow for the industry. Our campaign is encouraging all retailers and tourism businesses in Clare to contact their local TDs and ask them to stop another tourism tax.’’