Sunday 17 December 2017

Sales taxes way above world average, study shows

Aideen Sheehan Consumer Correspondent

AN international study shows taxes on routine purchases in Ireland are among the highest in the world.

The figures emerged as the latest retail sales figures revealed yet another decline in consumer spending in January.

The study of sales taxes showed that the Government takes over 60pc of every euro motorists here spend on petrol – compared with a worldwide average of 36pc.

And over a third of the price of a bottle of wine here goes straight to the taxman, well above the international norm of 23pc.

For cigarettes a whopping 80pc of the Irish price goes to the Government compared to 51pc internationally, while for chocolates, smoothies, music downloads, legal, medical and other professional services, we also pay taxes that are well above the odds.

The study of sales taxes – including VAT and excise duties – in 22 countries worldwide including the US, Britain, China, Australia, Russia and Canada, was carried out by Irish accountancy firm Farrelly Dawe White.

Its head Alan Farrelly said Ireland's high taxes for consumer products did not compare well with other countries and could undermine the recovery in spending by squeezed householders.

"Reducing sales taxes could be a gamble worth taking to help jumpstart the economy," he said.

New figures from the Central Statistics Office show that retail sales fell again in January as cashstrapped householders continued to cut back.

Department stores were the big victims with a 15pc slump in purchases while bars also saw an 8pc dip in business.

Boost

Overall the seasonally adjusted volume of retail sales fell by 1.7pc in January compared with December and they're 1.2pc lower than a year ago – while the value of these sales also fell by a similar amount.

However some sectors enjoyed a boost, with furniture and lighting sales up 6.6pc.

Fuel sales also rose 1.6pc in the month, but they're 1.3pc lower than a year ago, suggesting motorists are responding to high prices at the pumps by cutting back on journeys.

Motor sales are also 3.6pc down in the month and 8.8pc lower than this time last year.

Retail Excellence Ireland said it was disappointing that the volume and value of sales were still falling in 2013.

Irish Independent

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