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VAT changes on the cards

Wednesday, 18th November, 2020 5:42pm

A new report has outlined the effect proposed tax changes could have retail and tourism sectors in Cork.

Leading economist Jim Power published the findings of the report this week which urges the Government to 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.

It's proposed that 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 Cork will have to spend at least €175 on a single purchase to avail of a VAT refund.

According to Mr Power the Retail Export Scheme contributes €108.1 million to the economy, with a large proportion of this spent outside of Dublin.

He added: “The proposed new legislation will risk many jobs in Cork 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 Cork 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.’’

Mr Power continued: “The tourism and retail sectors in Cork 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 Stop Another Tourism Tax campaign on the issue and commissioned the report.

A spokesperson for the 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 Cork to contact their local TDs and ask them to stop another tourism tax.’’

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