UK’s duty-free golden goose will become albatross

Global Blue Holding

30/12/2020 09:52

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are her own.)
    By Karen Kwok
    LONDON, Dec 30 (Reuters Breakingviews) - The government’s
plan to end tax rebates for inbound tourists was part of its EU
horse-trading. But it’s a needless hit to ailing retailers’
Asian custom. Instead of raising revenue in 2021, it will just
become a symbol of the UK’s Brexit-era capacity for reckless
self-harm.         
    Full view will be published shortly.
    On Twitter https://twitter.com/karenkkwok
    
    
    CONTEXT NEWS
    - Sadiq Khan, the mayor of London, wrote a column in the
Evening Standard on Dec. 4 saying the government should drop the
proposal of a ban of duty-free shopping in the United Kingdom.  
    - London’s Heathrow airport is preparing to launch a legal
challenge to the Treasury’s move to end value-added tax rebates
for tourists, Sky News reported on Nov. 2. 
    - Zurich-listed duty-free retailer Dufry and Global Blue,
the $2 billion tax-free refund operator, are also said to be
participating in the legal action.
    - From Jan. 1, 2021, VAT refunds for overseas visitors in
British shops will be removed. However, tourists will still be
able to buy items VAT-free in store and have them sent direct to
their overseas addresses.
    - The government added that the “costly system” of claiming
VAT refunds on items they take home in their luggage would be
ended.
    - In July investor Dan Loeb ditched a merger of his Far
Point special purpose acquisition company with Global Blue.
    - For previous columns by the author, Reuters customers can
click on  KWOK/ 
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Sky News article    https://news.sky.com/story/heathrow-in-legal-challenge-over-government-ban-on-vat-free-shopping-12121718
Sadiq Khan article    https://www.standard.co.uk/comment/this-deeply-damaging-tourist-tax-is-the-opposite-of-what-britain-needs-b164064.html
CEBR report    https://internationalretail.co.uk/wp-content/uploads/2020/10/Final-report-on-impact-of-ending-of-tax-free-shopping.pdf
OBR report    http://cdn.obr.uk/CCS1020397650-001_OBR-November2020-EFO-v2-Web-accessible.pdf
BREAKINGVIEWS-Duty-free group bags the ultimate Chinese shopper 
   urn:newsml:reuters.com:*:nL8N2GW21V
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 (Editing by George Hay and Oliver Taslic)
 ((karen.kwok@thomsonreuters.com; Reuters Messaging:
karen.kwok.thomsonreuters.com@reuters.net))