Independent MEP Nessa Childers said that the Vat regime in some cases “makes no sense” and was in need of reform.
The issue came under renewed focus when a caller to RTÉ’s Liveline, John Fennell, explained how he was paying the 23% Vat rate on his newly established School of Set Dancing in Kilrush, Co Clare, which he claimed was unfair and “discriminatory and mind-boggling”, particularly given Irish dancing’s role in Irish culture.
By contrast, the Vat rate payable on entry into lapdancing clubs is 9%, and the Vat rate for ballet is 0%, as it avails of an exemption.
Deirdre Culligan of the Fennell’s School of Set Dancing said they had been alerted to the Vat issue by an article published last year by the Irish Examiner and had set up an online petition in order to demand the current Vat parameters be changed.
She said they were also looking at the possibility of challenging the current situation via the Dancehall Act of 1935 in a bid to have the Vat rate for set dancing reduced to 9%, or 0%.
Ms Childers said: “We need to review our entire Vat system, which in many cases makes no sense.
“Luxury items are often at a very low rate and essentials are taxed at a high rate. We need to reform this chaotic system.
“I will certainly support any changes at EU level, and national level, to reduce the amount of Vat applied on life-saving equipment, such as defibrillators.”
The Revenue Commissioners said the EU Vat Directive, with which Irish Vat legislation must comply, provides a public interest exemption for education, as set out in paragraph 4 (3) of Schedule 1 of the Value Added Tax Consolidation Act 2010 as children’s or young people’s education and school or university education provided by educational establishments recognised by the State, and education of a similar kind provided by other persons.
“Ballet schools are regarded as providing Vat exempt education of a similar kind,” a Revenue spokesperson said.
“Schedule 1 does however provide a Vat exemption for the promotion of, and admission to, live theatrical or musical performances where food or drink is not provided during the performances. It would appear that the admission fees to most feiseanna would benefit from this Vat exemption.”
The spokesperson confirmed that admission to a lapdancing club is subject to Vat at 9%, defined as “admission to live theatrical or musical performance where food or drink is provided during the performance”.