Close loopholes instead of raising Vat

I CANNOT understand the proposal to increase the standard rate of Vat from 21% to 23% as this 2% increase will directly costs jobs.

It will also increase the cost of doing business and living in Ireland which will negatively affect job creation and job retention in this country. I ask why not instead close off the loopholes which reduce the tax take?

For example: why not close off the loophole which facilitates a very small minority of commercial organisations pay less tax on their commercial activities by owning or renting land. Farmers receive a Vat flat rate credit of 5.2% to offset Vat paid on their inputs.

However, 5.2% is significantly higher than the amount of Vat incurred on farm inputs on most farming categories.

Discontinue with the 5.2% farmers’ flat rate

credit and replace it with an annual Vat return for farmers similar to small businesses.

Vat on diesel for cars is reclaimed by people registered for it. This is not equitable when compared with Vat on petrol which cannot be reclaimed, and Vat on diesel which cannot be reclaimed by ordinary people who are not registered for Vat. Discontinue allowing Vat on diesel for use in motor cars to be reclaimed.

In other words, confine allowing Vat reclaimable on diesel for use on HGV and vehicles used wholly, solely and exclusively for delivery of goods for business use. If this is not legal within European rules, then reduce the Vat on diesel to say 5% and increase the excise duty to compensate and allow the excise duty increase on diesel used in HGV and vehicles used wholly, solely and exclusively for transport of business goods, to be reclaimed. The above are just three examples of loopholes which could be closed instead of increasing the Vat rate.

Dermot O’Driscoll

Milltown

Midleton

Co Cork