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Government moves to protect duty-free status quo between Ireland and UK in no-deal Brexit

At the turn of the millennium, the EU abolished duty-free and tax-free sales on all air and sea routes within the trade bloc.

Shopping area at Dublin Airport
Shopping area at Dublin Airport
Image: Shutterstock/Milosz Maslanka

TODAY THE GOVERNMENT moved to protect the status quo of duty-free rules between Ireland and the UK in the case of a no-deal Brexit.

At the turn of the millennium, the European Union abolished duty-free and tax-free sales on all air and sea routes within the trade bloc.

Finance Minister Paschal Donohoe brought two extra measures to Cabinet today, which seeks to protect the current system. 

The two amendments to be included in the Brexit omnibus Bill at Committee Stage relate to duty-free sales at ports and airports, and the operation of the VAT Retail Export Scheme between Ireland and the UK, post Brexit.

The retail scheme relates to people who are resident outside the European Union who make purchases of goods in the EU. The scheme allows for a refund of the VAT charged on these goods.

The government states these changes are necessary to protect Exchequer revenues. 

The committee stage amendments will be published on Thursday.

Duty-free shopping 

Since the UK voted to leave the EU, there has been speculation about the re-introduction of duty-free on air and sea routes between Ireland and the UK after Brexit, with one report stating that it could inject an extra €45 million each year into the local economy.

The report commissioned by the Irish Duty-Free Alliance (IDFA), a lobby group that represents stakeholders in the local travel retail market including airports, airlines, ferry operators and retailers, found that the restoration of duty-free sales between Ireland and the UK alone could lead to an extra €45.4 million in annual travel retail sales, excluding airline revenue.

The change would also support another 450 jobs in the country, the analysis found.

However, today’s amendments seek to ensure that the status quo is maintained in the case that the UK does not agree to the withdrawal agreement.  

Tonight, the Dáil began its debate on the Brexit omnibus Bill which includes proposed legislative changes that will be needed if the UK crashes out of the EU.

The measures, which Tánaiste Simon Coveney has said he hopes will remain sitting on the shelf, deal with issues ranging from education, health to transport.

Votes

UK Prime Minister Theresa May told Westminster today that on or before Tuesday 12 March, a meaningful vote will be held on her withdrawal agreement with the EU. If parliament votes in favour of that, the UK will leave the EU with the deal in place.

If that withdrawal agreement is voted down, there will be another vote on Wednesday 13 March. This time, MPs will be asked whether or not they want to leave the EU without a deal.

If the House of Commons votes against a no-deal Brexit, however, there will be yet another vote held.

On Thursday 14 March, she said the government will table an amendment to seek a “short, limited extension to Article 50″. Extending Article 50 would mean that the UK does not leave the EU on 29 March, as it is currently set to do.

With additional reporting by Conor McMahon and Sean Murray.

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