Retailers want cheap online purchases from outside Europe to be hit with taxes
Retail Excellence is calling for the end of tax and import duty exemptions on certain goods.
THE COUNTRY’S LARGEST retail industry group is calling on the government to introduce a slew of measures to curtail the trade of non-EU online sellers.
In its pre-Budget 2019 submission, Retail Excellence said the greatest threat to traditional bricks-and-mortar shops is “the onslaught of cheap, non-European imports coming into the country”.
Businesses operating outside Ireland account for about two-thirds of online spend here with “a significant portion of imports emanating from Asia, America and beyond”, according to the lobby group.
“Given this amount equates to over €14 million per day, it is physically impossible for the authorities to intercept each and every parcel.
“As a result, this represents a significant loss not only to retailers in Ireland but the Exchequer in VAT receipts, duties and other taxes,” Retail Excellence said in the policy recommendation.
To combat the issue, the organisation has suggested that the government should slap tariffs on items bought online that are currently exempt from Value Added Tax (VAT) and import duties.
Retail Excellence CEO Lorraine Higgins
Currently, consumers don’t have to pay VAT on items imported from outside the EU that are valued up to €22. Retail Excellence wants to see the removal of this exemption.
It has also recommended that the State axe its general duties exemption on non-EU goods valued up to €150.
It wants customs and tax authorities to be provided extra resources to conduct audits of so-called ‘distant sellers’ and apply liability notices and impose penalties where needed.
‘Vulnerability’
Retail Excellence, which is one of Ireland’s most active business lobby groups, also thinks that online marketplaces should be obliged to ensure all advertisers on their websites display VAT numbers.
If an advertiser on an online store doesn’t have an Irish-registered VAT number, the website should be liable for any unpaid taxes, it said.
In the Budget 2019 submission, Retail Excellence CEO Lorraine Higgins said the country’s low unemployment rate and economic growth suggests that “Ireland has regained some of its purr from the days of the Celtic Tiger”.
However, Higgins – who took up the role of chief executive this week – added that “a degree of vulnerability continues to exist” for retailers despite overall improvements in the sector, particularly when it comes to issues like Brexit.
With that in mind, Retail Excellence has urged the government to reduce Ireland’s standard VAT rate from 23% to 20%, which would put it in line with the UK’s rate.
It’s also calling for a “strategic retail fund to help Irish retailers stave off the worst excesses of Brexit”.
Other recommendations in the pre-budget submission include:
- The re-introduction of a ‘Living Over the Shop’ tax-friendly scheme to encourage shops to convert empty space into residential units
- A cap on increases in commercial rates bills
- The introduction of a permanent 4.25% employers PRSI rate for workers earning less than €380 a week “to enhance job retention and creation in the retail industry”
- On-the-stop checks of casual and seasonal sellers and unlicensed street markets
