The Mayor of Inishowen’s largest town is encouraging people to shop local as VAT is expected to rise a further 2% in the Republic.
Buncrana man, Councillor Nicholas Crossan believes the 2% increase in VAT will be a further blow to local retailers who have been fighting hard to remain competitive.
The Town Mayor is hoping the tax hike will not come into effect until Christmas Day at least.
Colr Crossan is worried the country is getting dearer and dearer.
“Once the price of petrol and diesel go up everything else will follow. Electricity and transport will then get more expensive,” said the Mayor.
“Buying Irish goods keep Irish jobs in the country and maybe if we pay a wee bit more on Irish goods now we’ll keep a few more jobs in the country long term. The mass exodus of our youth who have to travel abroad for jobs is a huge issue.”
Colr Crossan says the Inishowen retailers are doing everything they can to compete with shops across the border, but introducing voucher schemes to encourage people to spend money in their towns, whether it be Carndonagh or Buncrana.
Burnfoot councillor Jack Murray has said that a potential VAT hike would decimate the small business sector in Inishowen.
“The border region in Donegal is already struggling to compete with prices in Derry and other areas in the north. The government’s proposed VAT hike will, again, force prices up in Donegal and will drive even more businesses to the wall.”
He added: “Many small businesses in Inishowen have been hoping for a good Christmas in order to stay afloat but this news will be a cruel blow to pubs, restaurants and shops in the peninsula.”
The Sinn Fein Councillor also said that a VAT increase would disproportionately affect low and middle income families;
“Families across Donegal are struggling to cope; struggling to feed their families, heat their homes and clothe their children.
“The government now plans to further increase prices for these families. This is totally and utterly wrong and any claim that this hike would not disproportionately affect poorer families is simply untrue.”
Inishowen 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.
“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.
He added: “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.”