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E-mailOn 16 July this year, the European Court of Justice (ECJ) handed down a decision requiring local authorities to charge Vat on the services they provide. This means local authorities in Ireland must soon charge Vat at up to 21% on refuse collection, entry to swimming pools, parking etc.
The EU Water Framework Directive means that schools and farmers etc, are already charged for use of water, but is now compounded by this ECJ tax decision which means that public authorities in competition with private providers will have to charge Vat for services such as water as well.
Asked about this ECJ ruling by a national newspaper, Niall Campbell, head of global indirect tax services at KPMG Ireland, said: "It is fair to say that, in this case, Ireland lost on all counts."
The ruling also contradicts the government's claim it has "guarantees" that Ireland will have full control over its taxation system. UK foreign secretary David Miliband has already stated, "Every head of state agrees that these guarantees do not change the [Lisbon] treaty." These "guarantees" are a simply PR con job.
EU political leaders including Merkel, Sarkozy and Barroso are already on record stating they want to raise an EU tax. On top of that, an EU Commission report of 14 July 2004, lists four different options for raising this tax, including a new energy-based tax, a fiscal Vat resource and a resource based on corporate income. Article 311 of Lisbon gives the EU power to unanimously "establish new categories of own resources". The last part of article 311 states the rules on this new tax are to be decided by qualified majority voting – ie, we lose our national veto on its details.
Even the government's own white paper (chapter 10) says: "The treaty allows for the implementing measures, such as how 'own resources' are to be made available and accounted for, to be decided by QMV."
In conclusion, the treaty of Lisbon gives EU institutions power to raise new taxes and to tax you and I; surely not a good state of affairs.
Brian McDermott,
Annagassan,
Dundalk,
Co Louth.
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Sorry, but presenting the harmonisation of the VAT rate as somehow linked to the Lisbon Treaty is extremely disingenuous. The Sixth VAT Directive is the source of law for VAT rates in all member states.
Also, this isn't the first time Ireland's rates have been contrary to the Directive. Toll charges changed from being VAT exempt to being charged at the 21% rate in September 2001.