Thursday, February 01, 2007

Irish VAT rate is "extortionate" says Sony Manager

Anyone looking forward to the long awaited, and delayed, release of Sonys new Playstation 3 in Europe and Ireland should by now know that the price that has been announced is on bit on the high side. To be honest it's on the "I'm not paying that, piss off, there will be a price drop in a few months anyway" side of high.

Now it's not just Irish gamers who are weeping into their piggy banks and eyeing the local securicore van with evil intent in their eyes. Gamers in the UK have also been complaining about the pricing, where they have to pay £425 RRP compared to £300 RRP in the US and £250 RRP in Japan.

Todays Guardian has taken up the cause of the geeks and have an interview with Ray Maguire, Sony Computer Entertainment's UK managing director. It's full of the usual market waffle to explain differences between US, Asian and European releases of anything electronic, VAT and tax being the main culprit.

Interestingly though, when talking about tax, Ray is quoted as saying
Maguire adds that VAT varies from "lesser" rates in mainland Europe to an "extortionate" one in Ireland (update: 21%). Which does, at least, explain why the PlayStation 3 will cost €629 (£415) in Ireland as opposed to €599 (£395) in continental Europe.

So who says we are a low tax nation? When electronics companies start to refer to Irish tax rates as "extortionate" you have to wonder just how badly is the Government screwing us? Still I'm sure the rest of Europe can take comfort in the fact that Sony can point at Ireland and say "see, they are worse off than you, so stop whining and pay the money".

[Via The Guardian]

6 comments:

Fernando (Nerd Gaucho) said...

Interesting post. However, I expected to find the actual VAT tax rate in Ireland but it's not included anywhere in your post!. Go figure!.

Declan said...

My mistake, it's 21% and I've updated the post

Fernando (Nerd Gaucho) said...

Thanks for the prompt reply and update, Declan!.

So... we have the same VAT tax rate down here in .AR as you guys up there in "Modern" Ireland (Forbes dixit) often hailed as poster boys of free-market economics reform, go figure!. I thought the tax rate up there was much, much lower.

Hrmm... food for thought.

FC
PS: you might want to know that our VAT got raised from 17% to 21% about a decade ago as a "temporary" measure when the government was facing cronic fiscal deficits. Now we have fiscal and trade surpluses, but the "temporary" tax hike was never reverted to the original. :-)

Declan said...

We have had a 21% rate for years now. The government did try to reduce it to 20% a few years ago but retailers just kept prices the same and took the 1% extra profit. In the end the gov just put the rate back up to 21%.

Fernando (Nerd Gaucho) said...

How funny! the same happened down here!.

The finance minister two years ago explored the possibility of lowering VAT 1-2 percentage points, but asked business leaders if the move would result in guaranteed lower prices -he expected business leaders to make some commmitment on the issue-.

In the end, he got as a response that prices would probably remain the same, and that consumers would see no benefit. The private sector would just swallow the additional profit.

So the finance minister concluded that it was a lose-lose move... consumers won't see any benefit, the government would lose millions in income, and only the private sector would benefit. So they canned the idea.

Thanks for this "virtual chat" opportunity -even if we're polluting your comments section in the process-. ;)

Here's my English language bog, for the record
http://geekgaucho.blogspot.com/

best regards and kudos from down under,

FC

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