January 26, 2021
Business News

Tax rule change threatens Waterford’s tourist and retail trade: top economist

Changes in the rules governing retail exporters could be disastrous for the tourist trade and tourist-related retail trade in Waterford, an economist has warned.

The changes relate to Brexit and would end the small tax perk which allows tourists from outside the EU to claim VAT refunds on small purchases.

The current Retail Export Scheme allows non-EU tourists to claim VAT refunds on craft and gift items purchased in Ireland. It supports small retailers in Waterford and encourages local crafts people 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 Waterford will have to spend at least €175 on a single purchase to claim a VAT refund.

Almost 85% of refunds under the current scheme are for purchases less than €175 and it is an important concession for retailers in Waterford, many of whom are small, family-run businesses that do not sell high-value items.

Leading economist and Waterford native Jim Power has  published the findings of an economic report which outlines the  damage proposed tax changes would have on the retail and tourism sectors in Waterford and which urges the Government to urgently rethink its proposals.

”The Retail Export Scheme contributes €108.1 million to the economy, with a large proportion of this spent outside of  Dublin,” said Mr Power.  “The proposed new legislation will risk many jobs in Waterford 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 Waterford 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.”

An alliance of independent retailers and tourism businesses across Ireland has launched a campaign on the issue.

”We are days away from Brexit and the Government is currently on a collision course with the retail and tourism sector,” said a spokesperson.

 

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