Hike in Retail Export Scheme threshold in Brexit bill damaging for tourist-retail sector

25 November 2020
  • Over 1,000 jobs at risk with rise in RES threshold from 0 to €75.
  • Government sneak in damaging change through amendment to Brexit bill.

Labour’s Finance spokesperson Ged Nash TD has said that over 1,000 jobs in the tourism retail trade could be lost arising from a government amendment to the Brexit Omnibus Bill that will hike the Retail Export Scheme (RES) qualifying threshold from €0 to €75.

Deputy Nash said:

“At present all non-EU visitors to Ireland can claim a refund on VAT on goods purchased in Ireland. Changes to the RES proposed by the government in the Brexit Bill will mean any goods under €75 purchased by non-EU visitors will not qualify for a VAT refund.

“Another element of the same section of the Bill also provides that UK visitors will have to prove that all taxes and importation duties due to the UK on purchases made in Ireland would have to be paid before VAT could be reclaimed from this State.

“At a time when craft and souvenir shops have been hammered by the pandemic and the consequent fall off in tourism as a result, this measure could bury the sector for good.

“The government’s argument that the threshold is being increased to deal with the potential abuse of the scheme by our neighbours in the UK does not hold water. There is little or no objective evidence available to us to suggest this.

“In fact, other parts of the relevant section of the Brexit Bill makes it particularly onerous on UK visitors to reclaim VAT on goods purchased in Ireland in the event of a no trade deal Brexit. Concerns about possible abuse of the RES are wide of the mark and over-egged.

“Removing all purchases under €75 from the benefit of the RES will have a huge impact on retail on the western seaboard in particular and will impact on visitors from countries such as the US, Japan and China.

“An independent review commissioned by the sector that will be most adversely impacted by this measure concludes that 1,200 jobs could be lost as a result of this proposed change. It is also believed that almost 50% of purchases under the Scheme are valued under €75.

“It is ironic that at a time when government is pumping billions into businesses to help keep the doors open that this burden is being placed on a very vulnerable sector that needs to be given every chance to survive.

“We sought in our amendments to allow the €0 threshold to remain and for a review to be undertaken after twelve months. Government faced down that amendment and this represents very bad news indeed for the sector”

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