Businesses in Drogheda, Co Louth have begun a campaign to urge the Government to reduce the rate of value added tax (VAT) to 15 per cent to help them compete with retailers north of the Border.
The Drogheda and District Chamber of Commerce is leading the call for the reduction in VAT, claiming it will stimulate the economy and help stem the flow of shoppers to Northern Ireland.
In an open letter to Minister for Finance Brian Lenihan and Tánaiste Mary Coughlan today, the chamber called on them to “act urgently” to assist the commercial and retail sectors in the State to “stem the flow of income and sales North to the jurisdiction of the UK government”.
“On Monday next, December 1st, we in this part of the island of Ireland increase our VAT rate from 21 per cent to 21.5 per cent while the Northern Ireland economy sees a reduction from the present 17.5 per cent rate to 15 per cent, ignoring all the other negative factors which mitigate against us,” wrote chamber president Patricia Rooney.
Ms Rooney said Belfast City Council and other authorities all over Northern Ireland are “four-square behind their business sector and have organised a Republic-wide advertising campaign to attract the southern shoppers into their stores and hotels and restaurants with even more incentives”.
“They are helping to save and support employment for their residents and it is being done largely at our expense. Sainsbury’s supermarket in Newry is their leading store across the entire UK for turnover and this is almost exclusively because of southern shoppers.”
Ms Rooney also said the landmark Boyne bridge, which is tolled, was discouraging shoppers from entering Drogheda.
“The local Borough Council in Drogheda have been proactive and supported the retailers here announcing a free parking facility in all their owned car parks from December 4th until December 24th for four hours each day 11am to 3pm, which is most welcome but not nearly enough to assist us.”
The chamber president urged the Government to take an immediate initiative to help save jobs in the area due to the flow of business to the North.
“If we keep those jobs we avoid the additional burden on the public coffers to provide social welfare to those who will lose their jobs otherwise when many of those businesses collapse from the strain they are under,” she wrote.
The chamber will launch a website today to promote its 'Drop the VAT' campaign.
Superquinn said yesterday the retail sector faced substantial job losses after Christmas due to the number of shoppers opting to travel to the North.