Black economy crushing retail

Black economy crushing retail

Ireland’s black economy is creating havoc for genuine retailers, new government figures reveal.

Irish Small & Medium Enterprises Association (Isme) said their analysis of Central Statistics Office (CSO) retail sales figures for April suggests a surge in the incomes of illicit traders.

Year-on-year retail sales figures showed the squeeze on margins with an increase of 5.1 per cent in volume, but just 2.5 per cent in value.

When the motor trade is excluded, sales were 3.6 per cent higher in volume and 1.3 per cent in value compared with 2015.

Isme welcomed the continued positive trend, but called on the new Government to refocus its efforts on the effect the black economy is having on the small and medium sized retail sector.

It also called for more emphasis from Revenue on combating rogue traders.

Isme CEO Mark Fielding said: “In addition to reduced margins, the black economy is ‘booming’ at the moment and the effects of smuggled cigarettes and other goods on small local stores is devastating. Ultimately, these shops will close leading to, not alone a loss of jobs but a loss of opportunity for local areas, devoid of convenience retail outlets.

“The massive unfair advantage created by non-payment of excise and taxes within the black economy is creating havoc for compliant retailers. The Revenue Commissioners must put much more emphasis on the eradication of rogue traders who have a massive competitive advantage, which is causing job intensive SME retailers to suffer and in some cases, close.”

The first five months of 2016 saw Revenue seize smuggled tobacco products worth almost €12.3m to the Exchequer, an increase of €2m over the same period in 2015.

Meanwhile, the solid fuel sector has complained Revenue has no reliable way to estimate the size of the smuggled solid fuel trade across the border. This €2m increase came following the excise increase of 50c in October 2015.

“The new Government must implement immediate policies to tackle the scourge of the Black Economy and the reduction of the cost base in order to secure the thousands of retail jobs in the economy”, Mr Fielding added.