'Lap dancing' VAT shows up unfair system

Lap dancing is subject to just 9 per cent VAT but marriage counselling is taxed at 23 per cent, Labour delegates were told during a debate on tax reform.

The conference backed a motion for reform after a Meath East member contrasted inconsistent and wildly varying rates of the tax.

Brian Collins from the Kells branch described as unfair a VAT regime in which frozen pizza and other processed food high in fat, salt and sugar is taxed at zero but bottled water is taxed at 23 per cent.

Toothpaste and toothbrushes are taxed at 23 per cent, while sugar has zero VAT.

Mr Collins added: “To buy a walking stick is 23 per cent, but to rent a limousine is exempt.”

There was applause and laughter when he said, “Marriage counselling is subject to 23 per cent but the cause of the marriage counselling perhaps, admission to a lap dancing club, is taxed at just 9 per cent.”

He told delegates: “In a country where we believe high-tech will bring us to the promised land, engineers are subject to 23 per cent VAT while astrologers are subject to 13.5 per cent.”

He said medical equipment was taxed at 23 per cent but faith healing is subjected to only 13.5 per cent.

Comparing Ireland internationally, he said in Japan all new houses are energy positive, adding energy to the grid, but in Ireland solar panels are taxed at 23 per cent while coal is subject to 13.5 per cent.

Mr Collins called on delegates and Minister for Public Expenditure Brendan Howlin to support the Facebook campaign for VAT reform.

Mr Howlin said he supported the motion which called for the Labour party in Government to pursue comprehensive reform of the VAT system to produce a more equitable and transparent system.

Regressive

Mr Collins described VAT as an unusual tax because although it was “very efficient”, it was hated by most of the left because it was regressive and by most of the right because it suppressed commercial activity. He said the key to making it a better tax was to do what the Government had done with the hospitality industry – “targeted intelligent cuts in rates, sometimes offset by increases elsewhere that served the public good”.

“We need to ensure the tax system supports and underpins those policy objectives, not undermine them,” Mr Collins added.