Donegal North East Fianna Fáil TD Charlie McConalogue has said that the decision to frontload a 2% increase in VAT will put serious pressure on businesses in border towns and villages.
Despite the Taoiseach’s assertions that currency fluctuations have a greater impact on cross border trade rather than the 2% VAT increase, Deputy McConalogue has said that we are at the mercy of global economic factors when it comes to currency fluctuations but we do have complete control over our own domestic VAT rate.
“Local businesses on this side of the border have been aggressively pursuing price cuts and competitive business strategies for the past number of years leading to better value for money for shoppers. Prices are well down on what they had been. This 2% VAT hike is an insult to their efforts to remain competitive. Worse still, it could be the final nail in the coffin for many local businesses.
“The 3% differential between us and Northern Ireland will naturally lead to a migration of shoppers faced with higher shopping bills to the North at a time when we can’t afford to be losing any business or spend on this side of the border. It will put businesses here under enormous pressure to stay afloat.
“The Fine Gael/Labour Government clearly have not thought this through properly. Frontloading a VAT hike will stifle businesses and entrepreneurship at the very wrong time in our recovery. There is no doubt that this will cost jobs in border communities. I am appealing to the local Government Deputies to fight for our communities and seek a reverse of this damaging decision.”
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