Pat Casey (Fianna Fail) | Oireachtas source

The amendments all relate to the same issue. The VAT refund scheme was introduced in 1985 and was one of the most incisive decisions ever for the promotion of tourism in Ireland. I am concerned that the Department does not fully understand the impact this scheme continues to have on the economy. I am very concerned about the €75 threshold. Senator Buttimer mentioned Blarney Woollen Mills, whose success was based on the VAT refund scheme. We all know of the coachloads of Americans coming through the shop who got their tax-rebate forms at the end or else posted away and got the VAT back at that point. We have had Avoca Handweavers and many other success stories based on this VAT refund scheme which has been in place for 35 years. It is nearly as sacred to the tourism industry as the rate of corporation tax is to our nation.

The €75 threshold will disenfranchise the small craft shops in towns and villages throughout the country. A €75 threshold is fine for a tourist going to Blarney Woollen Mills, Avoca Handweavers and other such outlets. However, the little shop that is selling the trinkets and T-shirts with "I've been the Glendalough" printed on them will never reach a spend of €75 and tourists will never get the tax back.It was a simple message without complications; there was tax-free shopping as long as one lived outside Europe. The message is no longer that shopping is tax-free but that one must spend €75 per transaction in each shop to qualify for a tax rebate. That is fine when dealing with the English or American market but our American market is now the Chinese market. God help the poor salesperson trying to explain to a Chinese person at the till that his or her shopping has only reached €65 and will not qualify for the tax rebate when the coach is leaving in ten minutes and there is a queue forming. What does one do in that situation? I do not believe we have a full understanding of the practical workings of this measure or, more importantly, the impact it will have on rural Ireland and on every rural village. The Minister of State will know that these small craft shops do not sell Waterford Crystal; they sell trinkets and T-shirts.

As a member of a Government party, I will probably have to withdraw my amendment at the end of the day, but may I ask a few specific questions? Senator Buttimer has asked where the figures of €75 and €175 came from. I would like to understand that too. Why does it not apply to cumulative spend? If it did, it would not matter whether one spent €5 in one shop, €10 in another and so on, one would still be able to claim transactions of €75 to claim the VAT back. Why was that not looked at or evaluated? Why could that not be the solution? This would mean that people would just have to spend over €75 or €50 or whatever figure is agreed over the whole period of their holiday. The requirement to spend €75 in one transaction in one retail outlet must be looked at and amended. If it is not, this will be another hit to a sector that has been rocked this year. There are craft shops across the country that have not once opened their doors this year and which probably will not do so until next June. This is the last thing they need. Many of these small retailers do not even know this debate is going on or the implications this measure will have for foreign visitors to their shops.

I am told the fear is that, because of Brexit, the UK market will be able to avail of this VAT refund. Why are we not celebrating that? We have created a market of 60 million who can come to this country and buy our products before going back to the UK. Why are we not looking at this as a positive? Why are we looking at it as a negative? We have already taken a hit from decreased tourism from the UK because of the sterling exchange rate. The hospitality sector declined by between 15% and 17% in the first year after Brexit was mentioned. This would only go towards alleviating the difficulties caused by that currency exchange rate. It should be looked at as a positive.

I do not buy that it would add more bureaucracy for the Department to deal with. That is the greatest load of wally I have ever heard in my life. Revenue was creative enough to bring in a stay-and-spend initiative app. Why can the same not be done for the VAT refund scheme? Why can the Government not look at alternatives? I know this is not the responsibility of the Minister of State and that collective agreement must be reached but, for the sake of the small independent craft shops this measure will affect, I ask that the measure be looked at again and an alternative found before the Bill is passed. I do not know whether the Department realises the impact that this will have. I regret that retailers are not aware of this debate. That is a further frustration. They do not know what it will mean for them. They will no longer be able to say that there is tax-free shopping in their shops. I have reservations about that.

I will come back in again. There are probably a few things I meant to mention. I will raise the issue again. As the corporation tax rate is to our nation, this VAT refund scheme is to our industry. I ask the Minister of State to take that on board. We consider our corporation tax rate as sacred. The tourism industry considers this VAT rebate as vital to its success story. Let us look to the 60 million people next door as a positive and as an additional market from which we can now generate more revenue.