Dáil Éireann Debate, Wednesday - 3 February 2010
152 Deputy Seymour Crawford asked the Minister for Finance if an estimate has been carried out by his Department into the amount of VAT and excise duty lost through cross-Border shopping; if he is satisfied that sufficient efforts are being made to minimise this loss; and if he will make a statement on the matter. [5048/10]
View answerAs the Deputy may be aware, the Central Statistics Office (CSO) published on 4 December 2009 the results of a survey of cross-Border shopping as part of its quarterly national household survey (QNHS) Q2 2009. The results show that 16% of households in the Republic made a shopping trip to Northern Ireland in the 12 months to Q2 2009, with 41% in the Border area and 21% in Dublin so doing. The report estimates that the total expenditure between Q2 2008 and Q2 2009 on cross-Border shopping trips at €435 million. This is generally in line with the estimations published in March 2009 in the report on the implications of cross-Border shopping, which was undertaken on my behalf by the Revenue Commissioners and the CSO. The QNHS also showed that the majority of trips involved purchases of groceries (80%), with alcohol (44%) and clothing and durables (42%) being popular as well.
Based on the data contained in the CSO's QNHS survey on cross-Border shopping, Revenue has estimated that the VAT and excise loss in 2008 due to cross-Border shopping, taking into account seasonal adjustments for the Christmas period, would be in the region of €90 million.
The Irish standard VAT rate was reduced in the budget from 21.5% to 21% with effect from 1 January 2010. The UK standard VAT rate has reverted to 17.5% from 15% with effect from 1 January 2010. This means the standard VAT rate differential between Ireland and the UK has been reduced from 6.5 percentage points to 3.5 percentage points. In addition the excise duty rates on alcohol products were reduced with effect from 10 December 2009 and Sterling has appreciated slightly in recent months. These developments combined should provide less incentive for people to shop outside the State.
However, as previously stated, the main influence on cross-Border shopping and trade remains the significant depreciation of Sterling against the euro since mid 2007.
