Government excuses on VAT cuts wearing thin as tax receipts surge
- VAT windfall must be returned to those who need it most
- High time VAT on energy and fuel bills is cut
- Good Exchequer returns alone will not heat homes
Labour’s Finance spokesperson Ged Nash has said that the government’s excuses for delays in bringing forward cuts to VAT on energy and fuel bills is wearing thin, especially in light of the surge in tax receipts.
Deputy Nash said:
“Today’s exchequer returns are impressive, even when we rate them against our performance on tax for the comparable quarter before the pandemic. In February, Labour presented a detailed €1.4billion package of measures to the Dail to help low and middle income households combat the ever-rising cost of living.
“Revised Central Bank forecasts published today warn that inflation this year will peak at 8%. This estimate may be on the conservative side.
“The Central Bank also confirms what we already know. That it is the lower paid, those who rely on the State for their modest incomes, older citizens and rural dwellers who are hardest hit by the rising cost of the basic staples.
“Good exchequer returns alone will not heat homes. Good and timely government decisions will.
“For months now Labour has been urging the government to engage with the European Commission to secure a derogation that would allow the State to slash VAT on energy and fuel bills.
“This would represent a much bigger help to struggling households than headline-grabbing calls for cuts to carbon taxes that are used to fund the fuel allowance and other important mitigating measures.
“VAT alone brought in €5.9billion in the first-three months of this year compared to the first quarter of 2019.
“This is an increase of 17% in that period. Perversely, a good portion of the increase will be reflected in additional VAT to the State from higher fuel and energy costs to the consumer.
“It is high time the government presented plans to cut VAT and to put some of the VAT windfall back into the pockets of those who need it most.”