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Irish Retailers Call For Easing Of Tax Burden

by Jason Gorringe,, London

09 August 2017

Trade association Retail Ireland has warned that the sector is cautious and uncertain about what the second half of the year will bring, and called on the Government to ease the tax burden on consumers and retailers.

Retail Ireland's latest Retail Monitor showed that in the second quarter of 2017, retail sales values grew by four percent on an annual basis, and total sales volumes increased by 7.2 percent. However, Retail Ireland stressed that growth remains uneven.

According to the report, "Twelve months on from the UK's EU referendum result, the long-term impact of Brexit on exchange rates, consumer sentiment, and the outlook of the Irish economy has become clearer. Domestically, [the] concern is that the hard-won competitiveness gains of recent years are now unravelling, as cost increases emerge in every sector of the trade across a variety of budget lines."

Retail Ireland Director Thomas Burke commented: "In this post-Brexit era, control of costs and a focus on our competitiveness will be essential to sustain the recovery in Irish retail, and avoid placing the sector at a major competitive disadvantage compared to counterparts in Northern Ireland or pure play online-only retailers based in the UK."

Retail Ireland urged the Government to use the upcoming Budget to retain the special nine percent VAT rate, which covers the hospitality and tourism sector, and certain retail categories.

Retail Ireland said that, thanks to the reduced rate, the retail categories covered – including food service, newspaper sales, and hairdressing – have been able to employ and train increasing numbers of apprentices, and enhance training programs and other further education opportunities.

The report argued: "To foster growth and job creation in our sector, October's Budget must continue to ease the tax burden on consumers and retailers and incentivize job creation and training and education supports through changes to our tax system."

Also on the tax front, Retail Ireland called for the introduction of a scheme, based on the current R&D tax credit system, which would allow retailers to offset the cost of web developments against their VAT costs.

Retail Ireland would like the Government to put in place a fund to support retailers to mitigate the worst effects of Brexit, and to increase state spending on infrastructure. The report also called on the Government to delay the implementation of the Low Pay Commission's recommended increase of the National Minimum Wage, and to freeze the minimum wage at its current rate.

TAGS: VAT rates | VAT special schemes | tax | value added tax (VAT) | Ireland | tax incentives | training | VAT legislation | budget | travel and tourism | food | education | legislation | tax rates | tax breaks | tax reform | retail | trade association | trade

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