Mulberry CEO Andrea Baldo has said that the government should consider axing the UK’s tourist tax as the Treasury seeks to boost growth.
The exec said that reintroducing tax-free shopping for tourists would “be beneficial for the economy,” The Telegraph reported.
He also noted that it would help luxury manufacturers such as itself to invest further in UK production and boost the country’s high street stores, restaurants, and hotels through a resurgence of tourism.
Baldo’s comments come as Chancellor Rachel Reeves faces pressure to increase Britain’s GDP after the Office for Budget Responsibility cautioned last week that low productivity meant the economy could no longer grow as quickly as in the past.
Baldo dismissed concerns that granting tourists tax relief could be an unpopular move for the Labour Government, insisting that it was a question of “international competition”.
He said: “You are competing with Paris, and you are competing with Rome. The fact that you are giving an unfair advantage to others doesn’t make any sense.
“Our business is increasing, which means more handbags would be produced in Somerset, and that’s why my production team would actually welcome a change.”
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The CEO estimated that Mulberry had lost nearly £10m of UK sales between the pandemic and today due to the loss of tax-free shopping.
He added: “When I look at London before the pandemic compared to today, we’ve probably lost around a fifth of the traffic from international visitors.
“We have stores in Dublin and in Amsterdam, and they have almost doubled their business from international travellers.”
Baldo said that the figures indicated that the decision to axe tax-free shopping in 2021 was “really affecting our business”.
Last month, Selfridges claimed that the loss of tax-free shopping in the UK and weaker consumer confidence had been significant factors in its annual sales decline.
In July, Burberry boss Joshua Schulman also called on the government to bring back VAT-free shopping for international visitors, saying it could help Britain reclaim its status as Europe’s top shopping destination.
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