VAT increase - will Irish business close as a result?
Letter to the Irish Government:
VAT increase to 23% - damaging to Irish business!
Please join MemoryC.com in fighting this VAT increase!
At www.MemoryC.com we are convinced that the proposed 2% increase in the VAT rate will damage Irish small and medium sized businesses, cause a drop in employment - and ultimately result in the Irish State taking in less VAT than is the case at present.
MemoryC.com and the VAT increase - what it will mean:
VAT on EU orders will be lost and instead be paid abroad. Lost revenue to Irish State: €125,000+(*)
Loss of competitiveness as Irish consumers are forced to shop around for deals abroad
Drop in exports as our higher VAT rate will make Ireland too expensive for EU consumers
Net impact to MemoryC.com: Drop in sales, declining export, expansion plans hampered
(*) This is the estimated VAT amount on our EU export orders, for the next 12 months.
About 80% of our sales are to countries outside Ireland. On every sale to another EU country we bill 21% Irish VAT, which means the Irish State "earns" the VAT on every order we ship abroad. The current VAT rate of 21% is already higher than the VAT in some of the countries we ship to: 19% in Germany, 19.6% in France.
Assuming the proposed VAT increase to 23% is implemented we will no longer remain competitive in those markets if we continue to bill Irish VAT. Our only option to remain competitive is to register a VAT number in each of the countries where the VAT rate is lower. This is something that is perfectly legal, and it means the VAT on every order we ship outside Ireland will go straight to Revenue in the relevant country. This means a net loss for the Irish State on every order we export!
Furthermore, a VAT rate of 23% will damage the business we do in Ireland. We pride ourselves in offering excellent value for money on every product we sell, and we are often able to match or beat the pricing of any of our larger competitors in the UK, Europe or further afield.
A VAT increase to 23% will make it harder for us to offer our Irish customers the same excellent value for money. And we cannot blame our already cash-strapped Irish customers for shopping around for the best value on every product - something that will be even more difficult for us to sustain after the VAT increase.
In our opinion this proposed VAT increase is an extremely shortsighted solution, which will in fact result in LESS VAT being taken by the Irish State!
To contact MemoryC.com about this issue please email us at enough@memoryc.com.
Thank you for your time!
Please join MemoryC.com in fighting this VAT increase - share this with everyone you know, and let us make our voices heard. Who knows, if enough of us voice our opinion, the guys in Leinster House might even listen?
On behalf of the entire team at MemoryC.com
Jakob Kristensen
Managing Director, GoBeyond Limited, www.MemoryC.com
