[Article] Parking and Bin charges may rise 21% after EU issues legal threat

Victor

I think the 21% may be an overstatement as the local authorities will be better placed to re-coup the VAT that they do get charged (I understnad they are exempt under certain headings).

http://home.eircom.net/content/irelandcom/topstories/8535793?view=Eircomnet

Bin charges may rise 21% after EU issues legal threat
From:ireland.com
Wednesday, 26th July, 2006

could face rises of up to 21 per cent in the cost of public services following a legal threat issued to Ireland by the EU, writes Jamie Smyth in Brussels

The European Commission warned the Government yesterday that its practice of exempting public bodies from applying VAT to public services such as car parking and bin charges is illegal.

A host of other public services provided by Government departments are also exempt from VAT, which is usually charged at a rate of 21 per cent or 13.5 per cent.

In its legal opinion, the commission gives Ireland two months to amend its legislation to levy VAT on public services or face action at the European Court of Justice (ECJ).

Under EU law, public bodies, government departments and local authorities should be "treated as taxable persons in a number of cases, at any rate, where doing otherwise would result in significant distortion of competition", says the opinion.

The commission began investigating Ireland's VAT exemption on services provided by public bodies following a complaint issued by a private car park owner in Dublin. The car park owner complained that he was at a disadvantage because local authority car parks operated by Dublin City Council did not have to apply VAT charges.

Waste charges are also likely to come under the commission's legal opinion given the fact that private operators compete with local authorities in areas such as Dublin.

The Irish Waste Management Association has already raised the issue with the Government, said Keith McCormack, head of marketing at waste firm Greenstar.

"Private operators are at a disadvantage because they have to apply VAT to collect refuse whereas local authorities do not," he said. "Greenstar are looking for clarification on the role of the public sector in the field of waste management."

Applying VAT at the standard rate to bin charges levied by Fingal County Council in Dublin would increase the current fee to collect a single binload of refuse to €9.07, up from the current fee of €7.50.

The Government has already been forced to begin applying VAT to road tolls following the intervention of the commission and a judgment by the ECJ. However, a spokeswoman for the Government said that unlike the tolls case, the goods and services supplied by public bodies are provided directly and for the most part at no charge.

The commission issued its recent warning to Ireland after studying an ECJ judgment issued in 2004 in a case involving a German charity that operated a crematorium in the town of Halle. The charity complained a local authority running a rival crematorium could offer services at a lower price because it did not have to charge VAT. The ECJ upheld the complaint, ruling that a private person must be treated in the same manner as public bodies in relation to VAT.

lostexpectation

if a government can't provide services to itself on the cheap whats the point.