UK's Kemi Badenoch Vows to Reinstate VAT-Free Shopping for Tourists
Conservative leader aims to boost the ailing economy by bringing back tax-free shopping for international visitors, a move previously scrapped in 2021.
Kemi Badenoch, the Conservative leader, has pledged to reinstate VAT-free shopping for international visitors, aiming to revitalize Britain's economy. This commitment is part of a broader strategy to attract millions of overseas tourists and potentially inject £4 billion into the high street.
The proposal marks a significant shift from the policy enacted in 2021, which eliminated tax-free shopping for visitors. Badenoch stated her intention to reverse this decision, asserting that Britain should be an attractive destination for spending tourists rather than one that deters them.
"Five years of sending shoppers to Paris or Milan is more than enough," Badenoch commented, thanking the Daily Mail for its campaign to abolish the "hated tourist tax." She argued that the policy has been detrimental to tourism and the high street.
This initiative draws a contrast with the Labour party, which has recently introduced a levy on overnight stays. Badenoch accused Labour, led by Prime Minister Andy Burnham, of accepting economic decline and imposing higher taxes.
Badenoch's plan proposes restoring VAT refunds for eligible visitors from outside the European Union. Should initial evidence prove the scheme's economic viability, the policy could be extended to EU visitors by the end of the next parliamentary term.
Research from the Centre for Economics and Business Research (CEBR) suggests that reinstating tax-free shopping could attract an additional 2.35 million visitors and generate £4.1 billion in spending. The Conservative party believes this would benefit various sectors, including retail, hospitality, and transportation, while also curbing spending that currently flows to rival European destinations.
The announcement has garnered support from numerous business leaders, including those from prominent retail and hospitality firms. They have hailed the plans as "pro-growth" and "pro-jobs."
Even the Mayor of London, Lord Khan, who is affiliated with the Labour party, has previously called the decision to scrap tax-free shopping a "huge mistake."
A Labour spokesperson criticized the Conservative party's announcement as a "spectacular U-turn," questioning their rationale for previously abolishing the scheme and their plans for funding its reinstatement.