Retailers are calling for tax cuts, town renewal funding, more support for e-commerce and improved access to finance among their top-line proposals for Budget 2019.

Retail Excellence, a non-profit organisation representing more than 1,800 retail companies in Ireland, is calling for the increased supports and tax cuts to “protect retailers from the onslaught of cheap, non-European imports”.

The organisation’s Budget 2019 submission suggests a raft of tax measures to combat the influx of goods bought online. Lorraine Higgins, chief executive of Retail Excellence, argues that the measures are required in what is “an increasingly boundary-less retail environment”.

“One of the single biggest threats to bricks-and-mortar stores in Ireland and, consequently the retail mix and vibrancy of our town centres, is the glut of cheap, non-European imports being bought by Irish consumers online,” said Higgins.

Tax Fairness

In Association with

“The prices of these goods and products are generally distorted, as many distance sellers are not registered for VAT in Ireland and therefore do not apply same or duties to the product price, which leaves our retailers at a competitive disadvantage. Consequentially, this is a tax fairness issue.

“We recommend online marketplaces are held jointly and severally liable for the collection of VAT and duties from distance sellers, and that all online advertisers acquire an Irish VAT number. We also propose that VAT and duties exemptions on imported products are discontinued.”

Retail Excellence is also asking for increased funding under the Digital Trading Online Voucher scheme to enable more retailers get online. The group wants linguistic, logistic, network and market support in other jurisdictions, “akin to that which is afforded to manufacturing and processing companies”.

Wage Costs

The rising cost of wages is also shackling the retail sector, according to Retail Excellence. Its budget submission in this regard suggests the following measures:

• The introduction of a permanent 4.25% employer’s PRSI rate for low-paid workers earning less than €380 per week;
• An increase in the Small Benefits Exemption (voucher) from €500 to €650, equivalent to approximately one week’s wages for those on the average industrial wage;
• Pay harmonisation between employees and the self-employed, so that tax credits for the latter are equal to the former, at a rate of €1,650 instead of €1,150.

Other budget measures recommended by Retail Excellence include the introduction of a strategic retail fund to help Irish retailers combat the consequences of Brexit. The group also wants immediate focus on the introduction of a “business-focused bank akin to
Metro Bank (UK), where half of its balance sheet lending is targeted at SMEs”.

Additional Retail Excellence proposals would see a cap on how much business rates bills can rise or fall, as well as the abolition of all upward-only rent review clauses to allow commercial tenants to pay market rents.

“Despite record numbers back at work, Irish retail remains vulnerable,” said Lorraine Higgins. “Traditionally, a booming economy would mean increased spend in retail outlets but consumer habits have changed and we must react accordingly. This is precisely why Budget 2019 demands retail-focused solutions.”