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Sinn Féin calls for all-island VAT harmonisation

29 November, 2008

Sinn Féin Economic Spokesperson’s Arthur Morgan TD and Mitchel McLaughlin MLA have today made a joint call for the harmonisation of VAT across the island of Ireland. Arthur Morgan TD has also criticised Finance Minister Brian Lenihan for his “skin deep patriotism as it is his Budget that continues to squeeze small retailers out of business along the border by refusing to put in place an interim measure to support small retailers already struggling. In Donegal for example the live register has increased by 58% in the last year alone. Patriotism does not stop at either side of the border.”

Deputy Morgan said:
 “The Irish government’s decision to increase VAT from 21% to 21.5% is a regressive measure likely to cost families up to €250 next year. This eats into the budgets of working families struggling to cope with the prospect increased public service charges and other taxes such as the income levy.

“In addition the increase will have an adverse effect on consumer spending hitting hard small to medium sized businesses. In recent weeks I have advocated a 2% reduction in VAT to boost the incomes of low and middle income earning families and enhance consumer spending.
 “However border county businesses are now facing a double hit following the government savage budget as they tackle the impact of the British government’s decision to reduce the rate of VAT across a range of items to 15%.

 “With such a disparity between taxation rates applied in the north and south Sinn Féin’s longstanding demand for an all Ireland economic framework, which includes the harmonisation of all taxes, and fiscal incentives is now more relevant than ever. A first step towards the all Ireland economy would be the harmonisation of VAT across the island.

“In the interim the Irish government must examine different ways to support small retailers along the border counties in the run up to Christmas.

 Mitchel McLaughlin MLA added:
 “Whilst I have welcomed the reduction in VAT by the British Chancellor, I firmly believe that the economic success of this island is dependent on the development of the all-Ireland economy. It has never made sense for an island as small as Ireland to have two economies running in parallel thus in competition with each other.

“Today consumers and businesses in the six counties are benefiting from the British government’s decision to reduce VAT, while those in the 26 are hit with a further increase. Tomorrow the shoe could be on the other foot if the Irish government decided to reduce its VAT rate to levels below those decided by the British Chancellor of the Exchequer.

“The existence of two tax regimes on this small island is ludicrous and leads only to a volatile situation of economic distortions across the island, and indeed adds to the historic border county economic instability created by partition. While we in the North must continue to seek sufficient fiscal autonomy to manage the present economic realities, it is obvious however that the island’s future lies in all Ireland economic agenda.

Both Sinn Féin Economic Spokespersons concluded by saying:
 “The only progressive way forward for the development of this island’s economic future is for the process of an all Ireland economic framework to begin. Today Sinn Féin is calling for the harmonisation of VAT across the island as an initial step in beginning this process.” ENDS

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