A return to 13.5% VAT will cost the state €173 million, 13,500 job losses and will return the economy to recession according to Retail Excellence Ireland.
Chief Executive David Fitzsimons has written to Minister Noonan to draw attention to “the damaging impact a reversion to the 13.5% VAT rate from the current 9% rate would have on labour intensive sectors.”
He said the Government’s claim that the intervention cost the State €350million “is incorrect.” And “According to a recent Deloitte report the intervention has cost the State €88million in net VAT receipts. When you factor in your own Department’s assessment of the success of the intervention the employment gain equates to €261million in increased exchequer employment taxation receipts and social welfare savings.”
He concluded “The withdrawal of the 9% VAT rate has the potential to return the economy to recession.”