Retail Ireland, the Ibec group that represents the retail sector, today welcomed the cuts to income tax announced as part of Budget 2018, but expressed its disappointment at Government’s failure to address the growing competitiveness concerns of Irish retailers. It further expressed its disappointment at Government’s failure to introduce specific supports to address Brexit related concerns in the domestic economy.
Retail Ireland Director, Thomas Burke stated: “This mix of actions to ease the tax burden on consumers is to be welcomed, as it will help improve consumer confidence and increase spending power. This will in turn help sustain the ongoing recovery in the retail sector. However, retailers had hoped that the Government would also address spiralling input costs, and introduce measures to support the competitiveness of domestic Irish businesses, most exposed to Brexit pressures. It is disappointing that such measures have not materialised.
“The decision to increase the National Minimum Wage to €9.55 in 2018, a cumulative increase of over 10% since January 2016, will significantly impact the sector’s ability to provide job opportunities to new entrants and grow employment in the regions. Over the past four years, employment growth in the retail sector has been slow, with only 6,300 new jobs created. Today’s announcement of a further increase in the National Minimum Wage, along with an increase in the employers National Training Fund levy, will only serve to further slow that growth. Furthermore, it will increase wage pressures for retailers at levels well above the National Minimum Wage rate.
Retailers also signalled their disappointment at Government’s failure to introduce targeted measures to support domestically focused businesses facing Brexit related challenges.
“It is regrettable that Government have decided against introducing measures to incentivise the migration of Irish retailers into the e-commerce channel. Retail Ireland has long called for the introduction of a tax credit which would help Irish retailers, and the Exchequer, take a greater share of the increasing volume of online retail trade. Such supports would help wrestle back some of the 75% of total online spend which currently leaves Ireland to foreign based websites and would significantly increase tax take for the exchequer, with minimal investment.”