23% VAT on the way...

usamaoreilly

According to RTE a document has been spotted in Germay stating that we are in for a 2% vat hike in Decembers budget...In my view this will do more harm to the economy...Its so easy now to shop online where vat rates and prices are cheaper..I can also see the traffic jams reappearing in Newry as people head North for their TVs,car parts,building supplies,and all the other high end vat items..Oh ye and get a heap of groceries while they are up there..I think it will be another nail in our coffin if we go down this road,we need to get people out spending and this is not the way to do it....

Idbatterim

a vat rate of nearly 25% is madness! cutting waste is obviously not high enough up the agenda! was reading an article yesterday that stated, 32% of total government expenditure here goes on PS, in Germany its 18%!

Seth Brundle

The current government, like the previous ones has not got the balls to stand up to the PS unions.
I'm not sure whether its the banks, Germany, the unions or who that are in charge but one thing is for sure and that is that our government are not the ones governing!

gandalf

A higher VAT rate would be an absolute disaster for the economy. I hope this is one of this misdirection type stories that are used to make the actual budget seem less severe!

Elessar

I'm planning on buying a new car in the new year. If this is correct, I may seriously scrap that idea and keep saving instead. It will simply cost too much more than what I've budgeted for.

Lukker-

Madness.

eric hoone

Our VAT rate has to be a red-line issue as much as corporate tax in negotiations with our 'friends' in IMF/EU. This will strangle the domestic economy we try to get off our knees.

woodoo

Idbatterim wrote: »

a vat rate of nearly 25% is madness! cutting waste is obviously not high enough up the agenda! was reading an article yesterday that stated, 32% of total government expenditure here goes on PS, in Germany its 18%!

I suppose that was in the indo or some other independent news corp publication. I don't believe it to be true.

Teclo

At least the Germans gave us three weeks grace to get the Christmas shopping done.

K-9

VAT Receipts are down and below targets because people aren't spending. I can't see how raising it is going to make it better! People will just cut back more when it's combined with the other taxes and cuts coming.

thebman

K-9 wrote: »

VAT Receipts are down and below targets because people aren't spending. I can't see how raising it is going to make it better! People will just cut back more when it's combined with the other taxes and cuts coming.

Exactly it is an idiotic move especially when people will just buy online or up north to try to avoid it when they do spend.

It is an attempt to keep up their promise of not increasing income tax but to keep that promise they will put more people out of work.

K-9

thebman wrote: »

Exactly it is an idiotic move especially when people will just buy online or up north to try to avoid it when they do spend.

It is an attempt to keep up their promise of not increasing income tax but to keep that promise they will put more people out of work.

Not increasing income tax is another myth. They'll just either keep credits the same or reduce them, same with the tax bands. Stealth taxes as made famous by Blair.

Nothingbetter2d

lol at this rate fine gael and labour wont be getting re elected again

punchdrunk

41% band is too low! either up it or introduce a 3rd band

Dannyboy83

I'm confused as to where the question mark is around this?

I thought this was a given as of the 4th of November !?

http://www.finance.gov.ie/documents/publications/presentation/Fiscalstat.pdf
Page 19

Proposals in the area of VAT, excise duties and carbon tax are being examined to see how
indirect taxes can assist the Government in meeting commitments under the EU/IMF
Programme. This will be done in the context of the Programme for Government
commitment that any increase in VAT will limit the standard rate of VAT to 23%. In
addition, carbon taxes and excise duties on energy products are being examined with a
view to protecting revenues, while encouraging behavioural change and reducing our
greenhouse gas emissions.
Budget 2012 will be presented to Dáil Éireann on Tuesday, 6
th
December and will set out
in detail the nature of the revenue measures that are to be implemented over the coming
years.

Vat is due to increase to 23% this year, 24% by 2013 and 25% by 2015.

(My father told me it was 35% at some stage back in the 80s)

K-9

Dannyboy83 wrote: »

I'm confused as to where the question mark is around this?

I thought this was a given as of the 4th of November !?



Vat is due to increase to 23% this year, 24% by 2013 and 25% by 2015.

(My father told me it was 35% at some stage back in the 80s)

I remember that it actually was part of the plan. Still makes no sense to me, self defeating in a way. We know VAT receipts are going to drop so lets raise it to raise more revenue!

Not sure about VAT but there was 55/65% Income Tax rates at not that high levels of income, PRSI on top.

stephendevlin

Ah they'll cut away until theres nothing left to cut. They put VAT to 21.5% before and they withdrew it as people flocked to the north like mad. The North will advertise bargains to draw the custom in if they up the VAT again it will be too easy. I dont blame them either.
As long as we pay thier pensions though who cares right?

Dannyboy83

K-9 wrote: »

I remember that it actually was part of the plan. Still makes no sense to me, self defeating in a way. We know VAT receipts are going to drop so lets raise it to raise more revenue!

No disagreement there.
It's sheer idiocy imo; which is why I'm not surprised they're doing it.

n97 mini

kbannon wrote: »

The current government, like the previous ones has not got the balls to stand up to the PS unions.

Because they have the ability to shut the country down.

Anything is easier than taking them on.

the groutch

stephendevlin wrote: »

They put VAT to 21.5% before and they withdrew it as people flocked to the north like mad.

that's BS. It was because the UK rate had been dropped to 15% and the pound and euro nearing parity that everyone went north.
Now that the UK rate is 20% and the euro is worth about 85p very few people are going north.

ardmacha

It was because the UK rate had been dropped to 15% and the pound and euro nearing parity that everyone went north. Now that the UK rate is 20% and the euro is worth about 85p very few people are going north.

UK prices have increased by some 10% since 2009 when the Euro has 95p. And the UK may increase VAT further too, as they need the money also.

pacquiao

Vat has to be increased. Bonds were issued, remember?

[Jackass]

Ah jesus lads.

Fix the country, but cut / don't increase taxes and increase / maintain spending on hospitals and barracks...

How short your memories are. Do you think this Government inherited a golden nugget or a piece of sh*t.

This sinking ship was three quarters of the way to the bottom of the ocean by the time they got their hands on it, typical FF, take a hit in one election, then let the other guys make all the hard decisions, we'll be back in by dinner time. The Irish electorate hasn't failed them on this policy yet.

The VAT increase is expected and was known before an election was held. It's no major secret. Are we really going to bitch and moan about EVERYTHING they do to fix this mess? You'd swear this was all outrage perpitrated during years of boom...

Tigger

punchdrunk wrote: »

41% band is too low! either up it or introduce a 3rd band

high income tax and low vat would work to drive spending in my opinion but as it is we pay 50% on everything over 32,000 thats not low thats crazy high

mikep

They are Memorandum of understanding...

Go read them! See what else is coming....

HellFireClub

kbannon wrote: »

The current government, like the previous ones has not got the balls to stand up to the PS unions.
I'm not sure whether its the banks, Germany, the unions or who that are in charge but one thing is for sure and that is that our government are not the ones governing!

It's an Irish solution to an Irish problem, let's not deal with the 11 days/year average sick leave taken by PS workers, let's not tell TD's, ex Taoiseach and Presidents that they cannot get their gravy train pensions until they have actually reached retiremet age, lets not tell the same crowd of free loading bástards that if they want a car, they will have to buy one themselves and if they want a driver, they will have to pay for one out of their own pocket.

This country makes me want to throw up.

BeeDI

It's confirmed.

http://www.irishtimes.com/newspaper/breaking/2011/1118/breaking3.html

Noonan confirms VAT hike after 'disappointing' release


Any chance we could have an army coup, please, while we still have a bit of an army to do it.
Fock the politicians into spike island, and leave them there

kippy

Nothingbetter2d wrote: »

lol at this rate fine gael and labour wont be getting re elected again

I think was obvious from the get go. Getting into government this time out was the most dangerous of chalices to be in possession of.

The issue is, SF are getting stronger and are most likely going to be in government next time round. Imagine them having to implement their policies!

This 2 % VAT increase is a joke. Again, as mentioned countless times, will make the situation far worse.

secman

We are only bringing the unavoidable DEFAULT closer and closer. We simply cannot tax our way out this whilst paying unsecured bondholders. The tax takes are already substantially down, and can only continue the downward trend. People will spend less as they will have no option, more jobs will be lost, SW payouts will increase, PAYE intake will fall. Its all very very predictable, not sure what the game plan is, are we going to be the good boy in class and the teacher will eventually give us a treat, by way of a write down ( not default !)

Put in simple terms, you are in business, sales are flagging, do you increase price to customer ? and hope the extra income will keep you afloat, any half wit will tell you that your income will fall. You have to cut costs to survive.

Secman

coadyd

straw camels back :mad:

OMD

People are over reacting massively here. The 2% rise will push up prices of vat liable goods by 1.65%. People will not make decisions to shop in the north based on this. If you have €1,000 to spend it means that you would save €16.50 by going north. Obviously most people will be spending way less than €1000.

In last 5 months sterling has strengthened by 5% meaning effectively prices here became 5% cheaper relative to the north. Has anyone noticed?

In last 12 months UK inflation has been running approximately 4% higher than Ireland reducing prices here relatively by another 4%. Again has anyone noticed?

Finally if the government were going to do The opposite and reduce the rate of VAT by 2% everyone would be on saying it would have absolutely no effect on the economy.

Bullseye1

If you are currently buying an item/service at 1000 + VAT your paying 1210. If you then have to pay 23% your up to 1230. So your basically looking at 20 quid extra for every 1000 spent. It does not seem much but its all adding up to people having less to spend or people who will be unwilling to spend.

Its hard enough for self employed people to get work with having to add 21%. I can see alot more self employed people going to the wall.

Tazz T

People are omitting that prices go up by more than 2% when VAT goes up. A €4 beer won't go up by 8c. It will go up by 10c or more.

OMD

Bullseye1 wrote: »

If you are currently buying an item/service at 1000 + VAT your paying 1210. If you then have to pay 23% your up to 1230. So your basically looking at 20 quid extra for every 1000 spent.

Goods that cost €1,000 before the VAT rise will cost €1,016.50 after. So for example a TV that cost €490 before the VAT rise will cost €498 after. Most people won't notice.

_Kaiser_

kbannon wrote: »

The current government, like the previous ones has not got the balls to stand up to the PS unions.

n97 mini wrote: »

Because they have the ability to shut the country down.

Anything is easier than taking them on.

HellFireClub wrote: »

It's an Irish solution to an Irish problem, let's not deal with the 11 days/year average sick leave taken by PS workers, let's not tell TD's, ex Taoiseach and Presidents that they cannot get their gravy train pensions until they have actually reached retiremet age, lets not tell the same crowd of free loading bástards that if they want a car, they will have to buy one themselves and if they want a driver, they will have to pay for one out of their own pocket.

This country makes me want to throw up.

The reasons behind all of this is that the people who could/should make changes are the same people mentioned above. It's like asking Turkeys to vote for Chrtistmas.

Don't forget either that a good number of our TDs are teachers themselves by profession so are even more unlikely to implement measures that would directly affect their friends and colleagues.

Of course, that in itself is half the problem. We have people in government who know nothing about running a country (even though you could argue the need to have a government at all at this stage, seeing as the decisions are being made by Germany anyway! - there's a tonne of cash saved right there!) and a civil service that as above, is never going to voluntarily bring in (and more importantly - enforce) the changes needed.

We need to wipe the slate clean and start over. The Irish as a people aren't ready/can't be trusted to govern themselves (just under 100 years of independence has proven that where we first were ruled from Rome and now from Germany) and until we get over this "ah shure it'll be grand.." approach to EVERYTHING, coupled with a "me (and my family/mates) first" attitude we'll never progress - either as a nation or as a people

loldog

The thing about VAT is that it affects people on low incomes much more than people on higher incomes, so it is socially unjust. It amounts to a tax on poverty.

.

[Jackass]

That's a silly statement. A tax on poverty??

It gets worse.

Well presumably wealthy people would buy a lot more expensive things and a lot more often and therefore will pay significantly more. It's a blanket percentage tax that targets no one.

Padraig Mor

loldog wrote: »

The thing about VAT is that it affects people on low incomes much more than people on higher incomes, so it is socially unjust. It amounts to a tax on poverty.

.

The poverty industry always come out with this clanger. Yet, they also tend to claim that 'the most vulnerable' spend all their money on food - most of which is zero VAT rated. You can't have it both ways guys.....

Turnstyle

The third nail in the coffin this week for Irish business's and the economy.
This goes completely against the grain of the crap they spouted surrounding the reduced rate reduction in July...
This increase in VAT is one of the worst things they could possibly do!
Kenny & Co have further demonstrated their lack of a spine in yesterdays public service reform, lets cut civil servants holidays by rewarding them with heaps more days next year, hurray !!! lets axe the quangos by simply merging them, hurray !!! and lets save costs by simply cutting the most important front line staff like nurses, teachers and guards... nice one lads
This country is seriously fu*ed and is right on course for being a total mire in five years time.
Kenny & Co out of power asap and in with some form of national government made up of selected professionals with the interest and will to stand up for us in Europe and sort out some form of a positive future for us

gurramok

Historic rates of VAT
http://www.revenue.ie/en/tax/vat/rates/current-historic-rates-vat.html

Big list of VAT items http://www.revenue.ie/en/tax/vat/rates/index.jsp

Adult clothing and shoes is 21% VAT, so does shampoo, toothpaste, towels, tyres, chocolates, sweets and mobile phone credit! Examples like these do hit the poorest hardest. Bottled water is 21% VAT, surprised at this http://www.revenue.ie/en/tax/vat/rates/decision-detail-02185.jsp

mikep

Maybe this is what they meant by spelling out to us what to expect for the future...getting the MOU increases out of the way in one go will allow people to budget accordingly and hopefully(?) if the VAT receipts do not increase accordingly they can go back to the cheque writers and get them to go back on the requirement to raise VAT and change it....

jacko1

In the general election FG promised to increase the rate to 23% - they got elected - its called democracy - get over it !

Idbatterim

wasnt Brian Lenihan slammed when he increased Vat and then had to rescind it and didnt exactly the same happen in the Uk not too long ago?

Bullseye1

jacko1 wrote: »

In the general election FG promised to increase the rate to 23% - they got elected - its called democracy - get over it !

They promised alot of stuff and won't be following through on those promises. So why should we believe anything they say at this stage.

Who actually thinks raising VAT by 2% will actually bring in the required money when existing VAT take is down already.

They need to reduce public expenditure not raise taxes.

Tragedy

[Jackass] wrote: »

That's a silly statement. A tax on poverty??

It gets worse.

Well presumably wealthy people would buy a lot more expensive things and a lot more often and therefore will pay significantly more. It's a blanket percentage tax that targets no one.

It's been proven time and again that wealthier people spend less of their income as a percentage than poorer people. Therefore, poorer people are hit disproportionately by VAT changes while income tax changes are more equitable.

MayoForSam

It was on Matt Cooper earlier that there are also plans to introduce VAT on 0%-rated goods at present e.g. bread and books.

Your cheap and cheerful sliced pan won't be seeing an increase but be prepared to spend an extra 13.5% on your bagels, ciabattas and barn bracs i.e. 'luxury' breads.

As for books, this is just another reason for people to start switching to e-books (I am a recent convert), Easons and your local bookshop will be in a lot of trouble. Bit ironic after just electing a man of letters to our presidency.

At what stage will the EU/IMF/Germans i.e.our paymasters, and the Government realise that that man-on-the-street just can't afford any more taxation unless the cost of living comes down rapidly (not much hope of that) and they rip up the Croke Park agreement and start cutting numbers / salaries / pensions for middle-management / non-frontline staff in the public service?

ebbsy

They will not get more VAT in, people will buy less and they will get less tax in. Shops cannot afford to absorb the extra 2%.

I know that and Im no finance minister.

[Jackass]

Tragedy wrote: »

It's been proven time and again that wealthier people spend less of their income as a percentage than poorer people. Therefore, poorer people are hit disproportionately by VAT changes while income tax changes are more equitable.

Of course rich people spend less "percentage" of their income than poor people, that's why rich people have millions in the bank and poor people don't. It's about how much VAT is collected from rich and poor, and it's a lot more in monetary terms from one rich person vs one poor person.

Everything, literally, everything to do with price effects the day to day budget of poor people more than rich people, as they have less disposable income. This is arguably the most basic economic premise imaginable. This does not mean that a shop charging an extra 5 cent on a kit-kat are targeting the poor, and a VAT increase is a blanket charge that may cost a poor person an extra 100 euro a year, and a rich person an extra 5,000 a year, but it will effect poor people more because they have less money, but what do you suggest we do, produce a certificate of earnings at the counter in Tesco and have a tiered system?

Also, common house hold goods, such as basic foods etc. are exempt from the increase.

More shoppers will be going up north now, good job MR Noonan, screw up the country even more with this stupid plan :mad:

Just after listening to Minister Noonan on RTE news now, the VAT increase is ok because "poor people spend more of their money on food than rich people!" What planet is this guy on?

Icepick

Thank you, unions.

[Jackass]

He means that poorer people spend a lot more of their disposable income on food, feeding themselves and their family, in terms of proportion of income. And presumably was making the point that these are exempt goods.