Imelda Munster (Louth, Sinn Fein) | Oireachtas source

I thank the Leas-Chathaoirleach for the opportunity to speak to this Bill. It has never been more important to ensure that Irish interests across our entire island are protected throughout the Brexit process. We have seen how the Tories continue to undermine the process and, indeed, Irish interests, most recently through the United Kingdom Internal Market Bill, which is both dangerous and illegal. Surely at this stage we should know never to trust a British Government when it comes to Ireland, Irish interests and our people. We have to make every effort to ensure that a free trade agreement that protects Irish jobs is agreed. This is a matter of great concern in my constituency, particularly given the enormous damage caused to our economy by the pandemic and the closure of businesses this year. Some people feel that, as a result of the pandemic, the focus has shifted away from the potential difficulties Brexit may pose. We need to assure communities and businesses that they will be able to work and live their lives as normal once Britain leaves the EU.

On the specifics of this Bill, I will raise the proposed changes to the retail export scheme and the effect these will have on tourist-focused retailers. As we know, this scheme enables tourists from outside of the EU to claim a VAT refund on exported holiday purchases on sales worth more than a minimum of 1 cent. Since the 1980s, the scheme has played a part in helping local businesses to grow and has contributed greatly to attracting tourism spend. This Bill changes the scheme so that tourists can only avail of it if they are willing to spend more than €175 per store. It is estimated that 80% of tourists who use the scheme spend less than €175 per store. This figure rises to 90% along the west coast and in the midlands, areas that cannot afford any further blows to tourism. The types of businesses on which this change will have the worst impact are the arts and crafts businesses, the pottery businesses, the Irish woollens businesses, businesses selling musical instruments such as bodhráns, and so on. Tourists would have availed of this VAT relief when shopping in such businesses. This measure will hit small retailers hardest, particularly those outside Dublin where the majority of the tourist spend under the scheme takes place.

Other EU states are moving their existing thresholds while we are raising ours. It makes no sense whatsoever. Given the absolute hammering the tourism sector has experienced in 2020 and the potential for major travel restrictions next year, the timing of this move is absolutely disastrous for the sector, which is already on its knees. I ask the Minister to strongly reconsider this decision given the effects it will have.

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