Holiday shopping sprees cost the economy €1bn
OVER €1bn is being lost to the Irish economy due to the foreign shopping frenzy and Customs officials are turning a blind eye to €300m in lost taxes, business group ISME claimed yesterday.
ISME hit out at the "blase indifference" of Customs officials to the level of consumer products being brought in to Ireland by Irish shoppers which was having a serious impact on local shops and suppliers.
Many passengers may not know that travellers to Ireland from the US are only exempt from VAT and duty for goods up to a value of €175 per adult and €90 for a child under 15.
They are charged a reduced flat rate of 3.5pc duty and VAT at 21pc on another €350 worth of goods other than cigarettes.
In addition, shoppers can import up to 200 cigarettes, a litre of spirits, two litres of wine and 60mls of perfume tax free.
However, any goods above these values could be liable for tax of up to 30pc.
A recent survey of Irish shoppers in New York showed that the average spend ranged between €1,500 and €5,000, meaning that most of them were liable for VAT.
But ISME pointed out that Customs apprehended just four people who were over the limit last year although over 150,000 travelled to the US, according to the Comptroller and Auditor General's annual report.
Over €1bn worth of goods were being brought into the country without any customs intervention and the losses from these illegal imports was particularly significant in the run-up to Christmas, said ISME chief executive Mark Fielding.
He said shoppers in New York alone had spent upwards of €250m, and Irish people are department store Macy's third largest customers.
"Nobody bothers their barney about it," he said. "There is a lack of manpower and people are travelling over in droves with empty suitcases.
"It is galling to say the least that the authorities are not clamping down on the levels of products that are brought into the country illegally. If a small business was importing stock in a similar fashion the full rigour of the law would be applied to them."
Meanwhile it was estimated that consumers will spend over €4.46bn in Ireland this Christmas for the first time, with early indications that consumer spending will be up 5pc.
Spending would peak in excess of €25m an hour on Christmas Eve, with full employment, economic growth and consumer confidence all, Small Firms Association chairman Pat Crotty said.
He urged people to switch just €100 of their spending to Irish products which would result in an extra €200m of sales to benefit Irish business and jobs.
Revenue last night categorically rejected the suggestion that Customs officers were turning a blind eye to duty owed on US shopping trips.
Since October, officials had checked 350 flights to Ireland from the US and in this period challenged over 3,500 passengers and over 2,000 bags at Irish airports.