Chambers wants Vat differential to be narrowed

As Vat rates in the Republic and Northern Ireland change today Chambers Ireland has called on the governments in both jurisdictions to work towards “common fiscal regimes” to avoid fluctuations in trade along the Border based on currency and Vat variations.

Following changes introduced in the Budget the standard rate of Vat in the Republic rises from 21 per cent to 21.5 per cent. This rate applies to sales of cars, petrol, electrical supplies, household goods and clothing.

In the North the Vat rate drops from 17.5 per cent to 15 per cent and it will remain at this level until January 1st, 2010.

Seán Murphy, Director of Policy at Chambers Ireland said: "Recent fiscal changes and currency movements are having a profound impact on activities especially in our Border towns.

"We need to move away from a boom bust cycle whereby what is good for towns on one side of the Border is bad for those on the other."

He said businesses in the Republic faced significantly higher costs with regard to local authority charges, the minimum wage and said all "controllable charges" should be synchronised

He said the difference in Vat rates was now 43 per cent and he said "this differential is too stark".

He called on the Irish Government to bring the Vat rates "more in line" to protect retailers and its own tax receipt targets.