February 10, 2022
“New EU VAT rules must be used to tackle cost of living crisis” – Chris MacManus MEP

“New EU VAT rules must be used to tackle cost of living crisis” – Chris MacManus MEP

Sinn Féin MEP Chris MacManus has said that pending new EU rules on VAT will allow much greater flexibility to the government to implement VAT reductions in key areas to reduce the escalating cost of living crisis. He said as soon as the rules come into force the government must be ready to act to give people a much needed break.

MacManus said:

“New EU rules that allow greater flexibility for Member States like Ireland are due to come into force later this year after consultation with the EU Parliament. This new flexibility must be used fully to tackle the cost of living crisis. 

For example, up to now, only medicine taken orally was allowed avail of the zero rate of VAT. This can now be changed as soon as the new rules come into play. Internet access as part of a digitalisation policy can now be moved from the standard rate of 23%. Certain period products which were not exempt can now be made exempt from VAT. The government must examine all the possibilities with an eye on tackling the cost of living above all else.”

The Midlands Northwest MEP said the new flexibilities would bring important VAT relief to vital public services. “It has been a frustration for many people that EU VAT rules have so been inflexible and have been used either as an excuse or as a legitimate reason not to reduce or remove VAT on items of social importance.  For example, people who rent medical equipment have to pay the standard rate of VAT. Vitally important public services such as Mountain Rescue have to pay VAT on equipment. The same applies to community groups paying for a defibrillator. Now all of these items can be moved either to the reduced rate or zero rate if the political will exists.”

“These new rules can also be used to help our transition to a climate friendly economy with new flexibilities on solar panels and other climate necessary tools.”

“In general, any historic exemptions that Ireland currently enjoys can continue, but thankfully now, exemptions that exist in other countries can be used in Ireland too under certain conditions. Reducing or exempting VAT is not without cost but given the severity of the cost of living crisis in Ireland these options must be on the table, especially if they are available before the next Budget.” ENDS

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