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A Dublin based business group, DublinTown, is calling for the government to enforce VAT compliancy on online purchases from abroad, saying a lack of enforcement puts Irish retailers at a disadvantage.

Launching its Pre-Budget submission for 2020, DublinTown has called for Government action to enforce the VAT compliancy, and suggested that alternatively, VAT rates should be reduced to bring them in line with common rates across Europe.

The group suggests a standard rate of VAT set at 20%, while services related VAT, including VAT on the hospitality sector, should be reduced to 10%. 

Speaking about the group’s pre-budget submission, CEO of DublinTown, Richard Guiney, said that Irish retailers are impacted by the ‘reality that the majority of online shopping is done on foreign sites’.

Guiney said: “Irish traders are already at a disadvantage, given Ireland’s high VAT rates. However, they are further impacted by the reality that the majority of online shopping is done on foreign sites, and although VAT should be charged on these purchases at the point of entry, in reality this doesn’t happen.

“We are calling on the Government to ensure there is a level playing field for Irish retailers to be able to compete online.”

‘Knock-on effect’

The submission also makes a call for the review of the ’Living Over the Shop’ and ‘City Living’ Initiatives, which would aim to alleviate pressures in the rental market by bringing unutilised space in the city to use.

Guiney said that because young people are spending so much money on rent, they’re spending less in stores. He said that retailers have also had people turning down jobs as they couldn’t find suitable, affordable accommodation within commuting distance.

Speaking on the issue, Guiney said: “Issues with the rental market are having knock-on effects on two fronts for retail and hospitality businesses.

“Firstly, with younger people spending so much of their income on rent, it has led to the 25-35-year-old demographic spending less on fashion compared to the previous generation.

“Not only that, but it’s also making it harder for employers to recruit staff, with feedback from our members that they have had people turn down jobs because they weren’t able to find suitable accommodation within commuting distances.

“There’s thousands of square metres of unutilised space in Dublin city centre that could potentially be converted into accommodation which the Government needs to look at as a solution in order to tackle the rental crisis.”

For more information or to review Dublin Town’s Pre-Budget Submission in detail, visit dublintown.ie.