Warning over retail giant taxation
Taxing retail giants would discourage growth and endanger job creation in Northern Ireland, an industry lobby group has said.
At least 6,000 extra posts are planned over the next three years by large companies such as Tesco. Each store is assessed on its own viability and the levy being considered by the Department of Finance and Personnel would affect decisions on whether to open or expand, the Northern Ireland Retail Consortium (NIRC) warned.
Finance Minister Sammy Wilson has launched a consultation that could see big retail stores paying a lot more in rates and smaller businesses less in an effort to regenerate town centre shops. It would mean 26 companies with 77 retail premises paying an extra £85,000 a year per premises.
NIRC director Jane Bevis said: "The tax on large retail premises would discourage growth and endanger job creation. The tax being considered on large retail premises risks doing long-term damage to Northern Ireland's town centres, employment figures and business reputation.
"We agree small retailers need a helping hand and that high streets need investment and regeneration. But this levy would also hit high street locations and be a disincentive to growth, doing more harm than good."
Ms Bevis added that large retailers were considering whether to invest in new stores around the world and they could decide to go elsewhere. She added: "That's a threat to growth and job creation at a time Northern Ireland needs it most. It could also have a knock-on effect for the tourism, food and manufacturing sectors."
This month the Jane Norman fashion chain and UK-wide furniture firm Habitat went into administration, while chocolate maker Thorntons announced plans to close shops.
Tesco would be the company worst affected by the change in Northern Ireland, which would produce an average rates saving for small businesses of around £750.
The Northern Ireland Independent Retail Trade Association has welcomed the proposals. According to a report published by the association in April, the UK's more than 8,000 supermarket outlets account for 97% of total grocery sales, and 76% of groceries are sold by just the four biggest retailers. This has seen declining sales on the High Street by smaller town centre retailers.
The minister is proposing that the changes that are being introduced because of the economic downturn, last for three years. The levy is not expected to put any further pressure on the public purse.