Friday, July 28, 2006

EU wants taxpayers to pay tax on service charges that their taxes should have funded anyway?

I bookmarked this yesterday and just got around to reading it this evening. The EU commission wants to take Ireland to the Court of Justice in Luxemburg (again) because the Irish government has deemed public services to be VAT free. The idea is that the public don't have to pay VAT on services like waste collection. After all these services were subsidized by tax payers anyway and probably should be free. The idea of charging them another tax on top of that is in effect making them pay for a service 3 times.
Irish VAT legislation provides that only the Minister of Finance may decide that public authorities can register for and charge VAT.

However, EU law states that public bodies should not be exempt from VAT when they engage in the same activities as private operators.

If they were, this would lead to a distortion of competition, meaning private companies would not have a level playing field in the market.

Now that Ireland is a net contributor to the EU I say we tell them to go screw themselves and if they want to take us to court the Irish government will just withhold its contributions to the EU and use it help properly fund the public services. Then tax payers wont have to pay for those services and so there wont be any need to charge VAT which should keep the eurocrats happy.

And as for a level playing field for private operators against public services, how about not having to deal with public service unions as a great leveler in their favor?

No comments: