When it comes to taxation policy, consistency obviously isn’t the new Government’s forte. It may have ruled out more income tax increases but in other areas it would appear confusion reigns. A VAT reduction may be in the offing for some goods and particularly services but previous ‘untouchables’ now seem to be on the table.
According to The Sunday Business Post, the new Minister for Finance Michael Noonan is being advised in a briefing document to tax books, oral medicines, some foods and children’s shoes – all of which are currently VAT-exempt. Similarly, some goods that currently incur the reduced 13.5% rate should be moved onto the standard 21% rate – these would include home heating oil and green diesel.
In 2010, VAT yielded more than €10 billion – around 30% of the total tax take. The briefing document states “changing the standard rate and the reduced rate of VAT by one percentage point would yield €336m and €235m respectively in a full year”.
If you are concerned about the possible VAT changes, contact Noone Casey to discuss the matter further.