Sir, – An increase in the higher rate of VAT by 2 per cent, as being proposed by Government in the forthcoming budget, will have a very serious impact on the work of charities and will very seriously affect their ability to fund-raise independently.
Unlike businesses, charities cannot recover VAT paid on goods and services.
A 2 per cent hike in the top VAT rate would immediately increase costs at a time when incomes are already sharply down due to a very difficult fundraising environment coupled with the impact of the recession. At the same time demand for services from charities from those most in need is on the increase.
ICTR, the representative body for Irish charities, has been seeking a solution to the problem of VAT regulations governing charities with successive governments since 1991. We have firmly established that it is possible to resolve this at national level without contravening EU VAT law.
A possible model already operates in Denmark. Our most recent research indicates that, out of fund-raised income, charities pay over €38 million a year in irrecoverable VAT on purchases necessary to deliver services.
Minister for Finance Michael Noonan is well aware of the burden that VAT places on charities. In the Seanad on October 6th he signalled that he is willing to have a working group of his officials, Revenue and charities come up with practical proposals to resolve the longstanding problem of irrecoverable VAT for charities.
The Minister’s suggested approach was very much welcomed by the sector. In the circumstances it is imperative that such a working group begins work immediately. – Yours, etc,
Sir, – When will an Irish Government take its courage in both hands and raise income tax instead of using stealth taxes to destroy the poor? The latest idea is to reduce child benefit for all.
We all know that there are people drawing it who don’t need it, but the less well off do need it desperately. Why not treat it as family income (or one parent’s if less bother) and tax it. Then the best off would give most of it back, the slightly less well off a portion and the poor none at all. This would be fairer. It’s not even a new tax.
As to raising income tax generally. None of us would like it, but it would be fairer. A €50 charge means little to a rich person and only a minor inconvenience to the comfortable, but could easily deprive a poor family of food for a few days.
That’s what “stealth taxes” do. Where’s the justice in that? I don’t buy the one about tax affecting jobs directly. Has anyone ever proved it? It’s just Thatcherism taken to the logical conclusion. Greed and self-interest must come first. Shameful. – Yours, etc,
Sir, – In the run-up to budget 2012 it is becoming clear education will be targeted for cutbacks. The recent capital expenditure review has allocated a certain block of funding for education, aimed exclusively at primary and secondary level, with virtually no third-level capital projects proceeding that have not already begun for at least five years. Rumours are now circulating widely, that not only will the student contribution charge be increased by €500 to €2,500 per year, per student, but that the student grant which supports those most in need of financial assistance will be cut by 5 per cent across the board.
Anecdotal evidence is now beginning to point to unprecedented drop-out of students in every higher education institution in the country. €2,000 was too much for many in higher education to bear – €2,500 will be impossible to afford for thousands who will, come next September, be left to choose between emigration and the dole. The State will have abandoned these people.
As minimum standards of education creep upwards, the population with postgraduate qualifications is often the greatest draw for employers when choosing which country to locate in. In many fields it is impossible to find work without such qualifications. Postgraduate students are the great innovators, the thinkers and inventors who improve Ireland for all its citizens, and from whose research all citizens benefit, but the budget may withdraw all support funding from postgraduates. The State is shooting itself in the foot.
The past two budgets have slashed the student grant by 8.8 per cent, meaning those from less well off backgrounds have been and will be punished most severely by the proposed cuts, as part-time employment to supplement income is extremely scarce, and credit institutions will not lend to those without proven income.
We call on the Government and every TD in Dáil Éireann to protect our most valuable asset, our young people and the education sector and to vote down any budget which threatens to destroy the progress torturously won over decades in this regard. Stop fees, save the grant. – Yours, etc,