The Minister for Finance has announced that duty-free shopping for people travelling from Ireland to UK ports and airports would return in the event of a no-deal Brexit.

Paschal Donohoe was responding to a statement from the British government that it intends to reintroduce duty-free shopping for passengers travelling to EU countries if the UK leaves the EU without a deal on 31 October. 

In these circumstances, the UK will assume the status of a "third country" in terms of their trading relationship with the European Union.

The UK government said today's announcement does not apply to people travelling from Northern Ireland to the Republic as duty free shopping only applies to airports and ports. 

It said this policy is in compliance with EU law and Ireland's international obligations.

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Mr Donohoe said that excise and VAT free sales on purchases of tobacco and alcohol made at duty-free shops - subject to quantitative purchase limits - would operate between Ireland and the UK in the case of a no-deal Brexit.

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"The effect of the announcement by the UK government today on the return of duty-free shopping between the UK and EU Member States means that Ireland in respecting our international obligations will, as intended, reciprocate the UK government's decision and facilitate duty-free purchases for passengers travelling from Ireland to UK ports and airports," Mr Donohoe said.

Referring to CSO figures, the Department of Finance's Tax Strategy Group said that 7.6 million passengers arrived in Ireland from the UK in 2017 and about the same number arrived in the UK from Ireland. 

"For illustrative purposes, if 50% of the total passengers arriving in Ireland from the UK availed of tax-free allowances within the fixed limits for cigarettes and spirits alone, this would have involved the import of 760 million cigarettes and 3.8 million litres of spirits," the Tax Strategy Group said. 

"The excise duty receipts foregone on this quantity of tobacco and cigarettes would total approximately €350m per annum," it added.  

UK Chancellor Sajid Javid

In a statement, the Chancellor Sajid Javid said that as the UK prepares to leave the EU, he is pleased to be able to back British travellers. 

"We want people to enjoy their hard-earned holidays and this decision will help holidaymakers' cash go that little bit further," the Chancellor said.

The DAA, which operates Dublin Airport, said it had been contingency planning for all options in relation to duty-free post Brexit.

The DAA said it welcomed the clarity that today's announcement has brought.

Reacting to today's announcements, Evelyn Jones, from the National Off-Licence Association (NOffLA),  said the draconian levels of excise charged on alcohol in Ireland has resulted in a market which is already very challenging for its members, with soaring cross-border shopping and the illicit trade of alcohol.

"We are therefore calling on the minister to reduce the level of alcohol excise duty in Budget 2020. 

"This would curb demand for duty free shopping in the event of a no-deal Brexit, as well as reduce cross border shopping and the illicit trade of alcohol," Ms Jones said. 

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