More calls for VAT cut to help retailers compete

THE head of the Irish division of international electrical retail group, DSG has become the latest figure to call for a reduction in Ireland’s VAT rate — branding Government inactivity on the issue “an astonishing lack of understanding”.

Declan Ronayne, managing director of DSG Retail Ireland — the group which operates the Currys and PC World electrical retail chains — said that the group’s three Northern Irish-based stores in Newry, Derry and Enniskillen will take more than €12 million out of the Irish economy this year, as Irish shoppers go North for cheaper deals. He said this would represent more than €2m being lost to Ireland in terms of VAT income.

The Republic’s 21.5% VAT rate was left unchanged in this month’s emergency budget.

“The lack of understanding of what’s happening to Irish retailers is astonishing. Sitting on the sidelines, offering uninformed spin and doing nothing as trade migrates to the North is not good enough. People are voting with their feet and no government can afford to ignore that.

“Cutting the VAT rate will help to stem the flow of this income out of Ireland by allowing retailers to compete more effectively with Northern Ireland,” said Mr Ronayne.

“With household budgets under such duress, it’s not surprising that shoppers go to where the value is.

“Our customers are telling us that they want to shop in the south but they simply cannot ignore the differential. Disappointingly, it appears that the Government is going to continue to be inert on this matter — however, our customers are clearly not willing to wait for them and neither is Currys,” he added.

To that end, Currys in Ireland is launching a price promotion for May, offering its leading products in prices that match the 15% British VAT rate.

Retail Ireland said last week that it will be upping its lobbying of the Government over some kind of reduction in the 21.5% VAT rate after the 15% rate in Britain remained unchanged after that country’s budget.