Saturday, 23 January 2010

VAT and local authorities

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.


Antoin O Lachtnain said...

I basically agree with you, but:

this will not actually make that much difference. Outside Dublin, garbage collection is mostly franchised out to private operators in one way or another so already is subject to VAT.

there will be a real cost to this in the Dublin area. When 13.5 percent VAT is put on top of the current local authority waste charges, the LA services will be patently uncompetitive and unviable. Dun Laoghaire Rathdown is already said to have lost half of its domestic garbage collection business to private operators. The whole thing will have to be restructured and there will be major redundancy costs.

An Saoi said...

Antóin, Tá bron orm nach raibh deis agam freagra a thabhairt duit roimhe seo. Má thógann comhluchtaí an gno ó na Comhairlí, beidh an CBL á ioc ar aon nos. Faoi lathair baineann Comhairle na Cathrach úsaid as chuid don síntiúis le ioc as seirbhísí eile. Gan an t-airgead sin, ní bheidh aon rogha, ach foinse eile a fháil.

progressive-economy@tasc said...
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