An Saoi: We were directed by Europe some time ago that VAT must be charged by Local Authorities on certain services such as parking, waste disposal and entry into leisure facilities. Competitors had to charge it and as such it is appropriate that State & Municipal bodies should have to do so also. It was well know that this was going to occur and just as happened in relation to toll charges, we dragged our feet. The original Court Case in relation to those charges took place in 1997 and the law was finally amended here from 1st July 2001.
The extension of VAT to these services is an opportunity to reduce the standard rate of VAT to 20% and ensure that the adjustment is at least neutral to the economy. Adding VAT to those charges is very close to pure income for the Government as the allowable VAT inputs credits are very small.
A further reduction in VAT with effect from 1st July 2010 is just what a tired economy might need.