VAT reduction would stem northern flow of shoppers

Mullingar Chamber is calling on the Government to reduce VAT rates in order to help stem the flow of traffic across the border in the run up to Christmas.

A letter has been sent by the Chamber to Taoiseach Brian Cowen, Minister for Finance Brian Lenihan, and Tanaiste Mary Coughlan asking that the VAT rate be reduced from 21.5 per cent to the lower rate of 13.5 per cent, at least for a trial period up to Christmas.

“This would not only match the rate in Northern Ireland but would be even lower. If this could be done even up to Christmas, it would make a difference. Retailers are definitely losing business across the border, and we as a chamber are putting pressure on the Government to reduce VAT,” president of Mullingar Chamber of Commerce, Paul O’Brennan, told the Advertiser.

Mr O’Brennan believes the Government needs to take a more long-sighted approach to the VAT issue.

“A small amount of VAT for the Government is better than no VAT or having to pay out unemployment benefit when people lose their jobs. In addition, local authorities will lose out on rates if shops close down,” he commented.

He also called on retailers to play their part in encouraging people to shop locally. “If we are to encourage people to shop locally, retailers have to be seen to do their bit. Maybe they could advertise that they are willing to reduce their pre-VAT price. If retailers could see a way of cutting margins and shoppers see this happening, they might be more loyal.”

The Chamber president also believes there is a strong “moral obligation” on locals to do as much of their Christmas shopping as possible locally.

“While I won’t condemn anyone in need who cannot afford to shop here, those who can afford to, have a moral obligation to support the local community. If the local shops close down people will always have to cross the border or go elsewhere. People need to realise they are jeopardising the jobs of their friends, families, and maybe their own jobs.”

Encouraging local businesses to take advantage of Mullingar Chamber’s voucher scheme, Mr O’Brennan said the only way to keep money in Mullingar was to use the vouchers to ensure repeat business. “This way people will spend their money in retail outlets in the area. It has to have an effect,” he said.

 

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