Sunday 15 December 2019

Taxman's cheers to Christmas drinkers

Why Revenue is raising a toast to tipplers with highest taxes in Europe

Sinead Ryan

Sinead Ryan

You thought Christmas was expensive already? It turns out Irish shoppers are paying the most when it comes to buying alcohol, and stocking up on champagne, spirits and wine can be a windfall - for Revenue.

Ireland has one of the highest VAT rates in Europe, at 23pc, which is payable on most goods and services. Our biggest trading partner, the UK, only charges 20pc, which is why getting the 'booze bus' to Newry is so attractive at Christmas time.

Kathryn D'Arcy, Director of the Alcohol Beverage Federation of Ireland said: "Irish drinkers pay some of the highest alcohol tax rates in the world and the second highest alcohol tax per person in the EU. Excise Duty is a tax that we can no longer afford - a tax on the hard-pressed Irish consumers".

In addition, shoppers are squeezed by the highest excise duties in Europe on wines and spirits.

Some 85pc of the cost of a €12 bottle of sparkling wine is paid over in taxes leaving very little left to enjoy.

A €22 bottle of whiskey sees 73pc of the cost being handed over to Revenue while an €8 bottle of still wine soaks up 58pc of its price in taxes.

Ms D'Arcy added: "Due to the anomaly of sparkling wine excise being double that of table wine, our taxes on sparkling wine are astronomically out of line with the rest of Europe. Fifteen of the EU-28 charge zero excise on wine."

Consumer experts have urged shoppers to shop around, as prices can differ between retailers.

An examination of prices showed a bottle of Moet & Chandon champagne costs €46 at a Tesco store in the Republic but in any of their UK shops the same bottle is just STG£25, or €31.31 - a saving of €14.69.

Not only that, but retailers have a currency differential to contend with also, attempting to set prices for Irish stores at a rate which won't see them lose money on the deal but can often leave them open to accusations of profiting on the exchange rate.

A Tesco spokeswoman said: "Our focus is on giving customers the best possible value and the certainty and pricing stability they need to control their budgets".

It gets worse once you go outside the EU. Anybody importing Christmas gifts online will find a short, sharp shock when the postman turns up at the door demanding a slice of the action.

Under Revenue rules VAT and customs duty must be applied to all goods landing in Ireland, and it varies depending on the country of origin, the type of item and how much it's valued at.

In the main, excise duty is between 0 and 17pc but there are extra charges on certain items from some countries, for example, bringing in a new bicycle made in China will add a hefty 48.5pc onto the price for a special "anti-dumping" countervailing charge which is intended to block counterfeiting.

Where VAT and duty is concerned, there are small exemptions for items coming from outside the EU: goods under €150 in value, or where the Duty would be less than €10 are exempt. Items under €22 in value are VAT exempted. Anything else and you're charged.

The most popular items imported by individuals are cars, mobile phones, electronics and clothing. Duty is calculated based on the cost of the item, plus shipping and insurance and then VAT is lumped on the top. It can make 'shopping around' in the global supermarket a lot less worthwhile.

A gold necklace costing $500 from the USA, with shipping/insurance costs of $30 will incur duty and VAT of a staggering €111.31, bringing its 'landed' cost to €538.21, a far cry from the $426.90 the piece was just using an exchange rate conversion. A pair of Nike Air Jordans from China costing €60 with shipping of €18 adds up to €95.94 by the time they arrive. And they won't be handed over until you pay up, with delivery companies and An Post obliged to collect the duties on behalf of the State. Officers from Revenue's Customs Service are permanently stationed at mail centres where foreign parcel post is received, namely Dublin, Portlaoise and Athlone, and the taxes are collected on delivery by An Post on behalf of Revenue.

Irish Independent

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