VAT anomalies leave scope for reform
VAT is set to be a big issue in next month's Budget. This country already has one of the highest 'standard' rates at 23pc, so there is little scope for another hike in the top rate.
VAT is also set to be imposed at a rate of 13.5pc on domestic water bills from next year.
But there is scope for Finance Minister Michael Noonan to carry out some reform of our inconsistent and, frankly, illogical VAT rates.
A group calling itself the Campaign for VAT Reform, headed by Kells, Co Meath, town councillor Brian Collins, has pointed out that there is 23pc VAT imposed on Irish dancing lessons, while ballet is VAT free.
Catheters for medical use are taxed at 23pc, but caviar is at 0pc.
And then there is the crazy situation where VAT is charged at an astonishing 232pc on garlic imported from abroad, if it is out of quota. Imported apples, on the other hand, are taxed at 9pc.
These anomalies leave lots of scope for reforming our VAT system.
The question is, will Minister Noonan just use the excuse of reforming the system to apply the higher, standard rate of 23pc on a larger number of goods and services in the Budget?