UK to axe most duty-free sales.
The British government is planning to end VAT-free shopping for international visitors at the end of the year.
Under the VAT Retail Export Scheme, non-EU visitors are currently able to save 20% on goods purchased, but not consumed in the UK.
Businesses in tourist hotspots like London benefit from the rule, attracting millions of visitors seeking bargains each year.
However, that is all coming to an end on December 31 as the British government argues the scheme offers little benefit to many parts of the UK and was inconsistent with international norms.
Alcohol and tobacco are the only exceptions to the new law and will continue to be sold at British airports, international train stations and cruise terminals without the 20% VAT levy.
The announcement has drawn criticism with some arguing the move will put 70,000 British jobs at risk.
Experts predict that wealthy Chinese and Middle Eastern visitors will simply go elsewhere for their shopping vacations.
“Madrid, Milan and Paris are rubbing their hands with glee at this self-inflicted wound,” said Paul Barnes, chief executive of the Association of International Retail.
“If we charge a fifth more for the same goods, international visitors will not hesitate to switch their city breaks to other countries and the stores and jobs will follow within months.”
While international tourists reclaim VAT on £2.5bn of eligible purchases, they pay VAT on the rest of the £22bn they spend during their trip.
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