Earlier this evening I was privileged to contribute to a discussion (50.35 minutes in) of the unfolding airport VAT controversy on Matt Cooper’s The Last Word radio programme on Today FM.
In response to my charge that airport retailers are unfairly pocketing a VAT advantage at the expense of their customers, the Dublin Airport Authority’s Paul O’Kane countered that the DAA are using this benefit to lower prices for everyone.
Paul’s claims incidentally give rise to further issues, which Aisling Donohoe raises in her excellent blog post, but I’d prefer here to concentrate on the key question of transparency for consumers – and what I see as the obvious solution to this mess.
It is abundantly clear that airport retailers have sufficient point-of-sale system technology at their disposal to enable them to automatically allow the appropriate VAT exemption to non-EU customers, in the form of a reduction in their bill.
This would be a far more transparent and acceptable practice than effectively ripping off some customers and pledging to use the proceeds to benefit others.
During the discussion, Paul confirmed that the DAA already operate differential pricing for duty-free sales to EU & non-EU customers, so their point-of-sale systems are indeed equipped for this purpose.
Why not extend this functionality to VAT, and dispense altogether with the cloak and dagger approach?
At a stroke, this simple move would resolve this controversy, and kill the bad PR that continues to engulf the airport retailing sector.
And because everybody loves a bargain, I guarantee that will actually boost airport sales to non-EU travellers.
So everyone wins!