Taxes, levies and charges add up to make costs in Ireland one of the most expensive in the EU
Ireland is one of the most expensive countries in Europe for consumer goods and services, with multiple taxes, levies and charges responsible for high costs.
Figures from European statistics agency Eurostat show that the prices of consumer goods and services in Ireland are among the highest in the European Union (EU).
Housing and energy costs are extraordinarily 84% higher than the EU average.
This prompted the government to reduce VAT and other charges to ease the cost of living pressures on households.
Overall prices in this country are 40% higher than the EU average, according to the most recent Eurostat figures. Only Denmark and Luxembourg have higher prices.
This country is the most expensive for alcohol and tobacco and one of the most expensive for food. Food is 20% more expensive in Ireland than the average for the 27 EU countries.
Alcohol prices in this country are double the EU average. This was measured before the introduction of the minimum unit price.
Taoiseach Micheál Martin yesterday ruled out any further government intervention on the cost of living ahead of the next budget.
Mr Martin said the €500million package of measures, announced by the government this week to tackle soaring inflation, was “one-off” and the “next intervention” would not have not take place before the October budget.
Mr Martin said that while the cost-of-living package will “never fully resolve” the financial burden of the rising rate of inflation, it “will help ease the pressures on many families, especially beleaguered families”.
On Thursday, the government doubled the soon-to-be-introduced electricity credit to €200 and cut public transport costs by 20%.
They have also promised a one-time payment of €125 for people claiming the fuel allowance.
The drug plan threshold has been reduced and budget changes to the Working Family Payment have been brought forward.
Mr Martin confirmed yesterday that he would follow the example of Public Expenditure Minister Michael McGrath and donate his electricity credit to charity.
The Consumers’ Association has warned that households are set to suffer costs of €2,000 this year due to rising prices.
Chartered Accountants Ireland has expressed disappointment at the government’s failure to cut the rate of VAT on energy costs from 13.5% to 9% to help consumers cope with the crippling impact of inflation.
The accountancy body’s public policy director, Dr Brian Keegan, said the rate of VAT on fuel oil, gas and electricity should be reduced to 9%, saying it would have “the immediate effect of put money back in consumers’ pockets.
Dr Keegan acknowledged that a waiver would be needed from the European Commission.
But that hasn’t stopped the government from reducing the maximum VAT rate from 23% to 21% for six months during the worst of the pandemic, or reducing the VAT rate for the hotel sector to 9% recently, he said. -he declares.
He said the more prices rose, the more money the Treasury got from the VAT.
Dr Keegan said a VAT cut could be implemented from April for three months, saving consumers up to €400 million on their energy bills.
Economist Austin Hughes of KBC Bank said Irish price levels are above the EU average due to indirect taxation in areas such as alcohol and tobacco and higher transport costs, because of our position on the periphery of Europe.
But Mr Hughes said it was important to point out that Irish incomes are higher than in many other EU countries.
Ireland has the eighth highest median annual income in the EU 27, at €40,074.
This is well above the average, which is €26,314.
An analysis from price comparison site Bonkers.ie shows how taxes and levies have a massive impact on prices here:
■Taxes and levies on household energy services add around €420 per year to the cost. The carbon tax is currently €41 per tonne of CO2. It adds around €76 to the average annual natural gas bill. This will increase to €93 per year in May. The Public Service Obligation (PSO) adds just over €58 per year (including VAT) to electricity bills. VAT at 13.5pc is also added to energy bills, adding €270 per year to the cost.
■The state takes around €900 a year in taxes from a typical driver from carbon tax, VAT, excise duty and the Nora (National Petroleum Reserves Agency) tax on diesel and gasoline. petrol. According to the AA, approximately 96c for each liter of petrol and 85c for each liter of diesel is taxed.
■Stamp duties on banks and on insurance policies cost a total of €66 per year.
■The payment of a quarterly car insurance entails a supplement of 57 €, compared to an annual payment.
Daragh Cassidy of Bonkers.ie said: “At 23% our standard rate of VAT is one of the highest in the world. And despite the government’s protests, it’s all within the government’s power to reduce or abolish them if it wishes. »