How about a Single Vat Rate?

[aidanodr]

Hi Guys,

How about if the government setup a single VAT Rate - 16%.

As you know we have 0%, 10%, 12.5%, 21.5% - These rates are applied differently to services, products, training and the like.

Current & Historic Rates of VAT

Check out the Rates Subject Index on the menu left. The list of different products and services at different rates is enormous.

So - Supposing one simplified rate at 16% - this brings us close to the UK rate. All other rates would either come up or come down to this rate. Training at the moment is 0% - put this up to 16% also? Between the lower rates coming up and the price reductions for goods I could see a better VAT take overall surely. Things would balance out?

Another big thing is it would simplify things for business - one rate to deal with, no messing.

I realise it would increase electricity and gas costs from 12.5% to 16%, but put all this up against other options being thrown around like increased personal tax, taxes on houses etc - it sounds a bit more palitable. May also stem the tide to the North. AND if one ups the energy rating on your house - less electricity / gas costs, VAT costs.

Tied in with this - I would also say a ring fenced 0% rate on WORK/LABOUR costs done to up the energy ratings on existing housing stock along with - maybe - a grant. Absolute encouragement to get this work done which reduces fuel costs overall for the householder, provides work and helps toward our environmental obligations.

Constructively now please - what do you guys think? Im trying to think out of the box .. I think

Aidan

[kellsangel]

Hi Guys,

How about if the government setup a single VAT Rate - 16%.

As you know we have 0%, 10%, 12.5%, 21.5% - These rates are applied differently to services, products, training and the like.

Current & Historic Rates of VAT

Check out the Rates Subject Index on the menu left. The list of different products and services at different rates is enormous.

So - Supposing one simplified rate at 16% - this brings us close to the UK rate. All other rates would either come up or come down to this rate. Training at the moment is 0% - put this up to 16% also? Between the lower rates coming up and the price reductions for goods I could see a better VAT take overall surely. Things would balance out?

Another big thing is it would simplify things for business - one rate to deal with, no messing.

I realise it would increase electricity and gas costs from 12.5% to 16%, but put all this up against other options being thrown around like increased personal tax, taxes on houses etc - it sounds a bit more palitable. May also stem the tide to the North. AND if one ups the energy rating on your house - less electricity / gas costs, VAT costs.

Tied in with this - I would also say a ring fenced 0% rate on WORK/LABOUR costs done to up the energy ratings on existing housing stock along with - maybe - a grant. Absolute encouragement to get this work done which reduces fuel costs overall for the householder, provides work and helps toward our environmental obligations.

Constructively now please - what do you guys think? Im trying to think out of the box .. I think

Aidan

You mean like increase VAt on Labour? from 13.5 to 16%

Would that be good for employment in the construction sector?

[aidanodr]

You mean like increase VAt on Labour? from 13.5 to 16%

Would that be good for employment in the construction sector?

Hey Kellsangel,

Well as it is at the moment if you are in say a business like me - computers - if I go out and charge €60 per hour/part for a job - the VAT rate is 21.5%. Outside of construction most other firms pay 21.5% on labour. Im just saying ONE rate simplifies things, drops the rate on goods which just might get people spending. Im sure the gov would much prefer 10 of product A sold at 16% rate as opposed to 2 at the 21.5% rate. More overall VAT on the former.

As it stands at the moment the construction industry is at a lowest ebb. Note I mentioned also that work/labour on a project like the increase of energy rating on housing stock would be charged at a ring fenced 0%.

Aidan

[kellsangel]

Yes I know professional services are liable at 21.5%

It might make more sense to bring the labour rate down to 13.5% rather then increase them.

That said

do some work as an electrical engineer and its 21.5% do the same work as an electrician and its 13.5%

all subject to the 2/3rds rule

[MacCoise]

You see there's thing called the European Union.......

[aidanodr]

Well, I asked an accountant friend while ago - Why the different VAT rates? when he thought about it he didnt know why - just accepted it. So maybe the Gov are the same way - the usual its always been that way, mmmm.

Surely the Eurozone or europe has no hold on what we charge VAT wise. Thats a sovereign decision surely. Look at the UK dropping the rate to 15% recently. Last i looked the UK are in Europe also? Sorry if I misinterpretted your point ...

Aidan

[aidanodr]

Yes I know professional services are liable at 21.5%

It might make more sense to bring the labour rate down to 13.5% rather then increase them.

That said

do some work as an electrical engineer and its 21.5% do the same work as an electrician and its 13.5%

all subject to the 2/3rds rule

Why a favourable rate to the construction industry? This must be a hangover from the past? Surely we are all labourers and working in one way or another.

I only mention 16% as it is in the middle of the two rates of 12.5% and 21.5%. Plus it sounds equitable all around?

Aidan

[MacCoise]

Well, I asked an accountant friend while ago - Why the different VAT rates? when he thought about it he didnt know why - just accepted it. So maybe the Gov are the same way - the usual its always been that way, mmmm.

Surely the Eurozone or europe has no hold on what we charge VAT wise. Thats a sovereign decision surely. Look at the UK dropping the rate to 15% recently. Last i looked the UK are in Europe also? Sorry if I misinterpretted your point ...

Aidan

SCADPlus: Common system of value added tax (VAT) ('the VAT Directive')

The EU VAT directives set the limits in which VAT has to be set including reduced and zero rates

[euroboy]

Isnt our VAT rates 0%(substantial applied), 13.5% and 21.5%.


I wouldnt agree with a single VAt rate but i do think we need to apply VAT to more items which are currently excluded.


Basic food stuffs should be taxed at the low rate(4.8%), so should medicines(currently 0%), books(currently 0%) and transport.

Our neighbours charge standard rates for many of the items we exclude from the tax base and I'm just calling for the above to be subject to 4.8% VAT.

Again, the story boils down to the fact we tax very little in Ireland but there is a public perception that it is a high tax economy because what little we do tax(and it appears we only charge VAT on alcohol and cigerettes) we tax very highly on very visible items. Not to mention people have to pay for many social services by private operators(making profits) when if they paid more taxes could be supplied by government(provided govt ideology was that way inclined). people think paying for services are stealth taxes when really its day light robbery by profiteers.

[aidanodr]

Isnt our VAT rates 0%(substantial applied), 13.5% and 21.5%.


I wouldnt agree with a single VAt rate but i do think we need to apply VAT to more items which are currently excluded.

I mention a one rate with other rates coming up to / going down to it because their is some win it for the government rather than just reducing the 21.5%.

And as a matter of interest "why wouldnt [ you ] agree with a single VAt rate" ? Curious ..

Aidan