The UK government’s decision to end tax-free shopping for tourists in January 2021 has had a significant impact on the country’s economy, leading to a loss of £10.7 billion in GDP and a decline in tourist numbers. The move, which was made following the UK’s exit from the EU, has caused non-UK visitors to choose neighbouring European countries like Paris and Milan for their shopping, instead of London.
Neil Clifford, CEO of Kurt Geiger, is now urging the newly elected Labour government to reinstate the tax exemption in order to boost business and attract more international tourists. The UK luxury sector’s official body, Walpole, has also recommended the introduction of a digital tax-free shopping scheme and a duty-free arrivals scheme to help stimulate spending.
Marco Passoni, from luxury and fashion brand consulting firm 2.0& Partners, has called on the new UK government to reconsider the decision to end tax-free shopping, stating that the policy has backfired and is harming the country’s finances and global reputation. Passoni and other industry experts believe that bringing back tax-free shopping is essential for the UK’s economic recovery and future growth.
As the UK continues to navigate economic challenges stemming from the pandemic and geopolitical conflicts, the pressure is on for the government to reconsider its decision on tax-free shopping and take proactive steps to support the retail and tourism sectors. The fate of the UK’s economy and international standing may depend on how quickly and effectively these policy changes are implemented.
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