Today is the first Tax Free day in Ireland (well, Dublin really). It’s an initiative by a group of pubs who have come together to raise the awareness amongst pub goers the effects that excise duties and VAT has on the price of alcohol. The tactic is modelled on a similar one in the UK, now in its fourth year and coincidentally took place yesterday.
Fantastic to see Irish pubs getting behind the alcohol tax free day @Searsons_Bar @SupportUrLocal #TaxEqualityDay pic.twitter.com/WWDuZSUxTr
— Aidan Sweeney (@sweeney_aidan) September 23, 2014
This is the latest initiative in the campaign to get the Irish Government reduce the excise duties. Irish consumers pay the second highest tax rates on alcohol in the EU and we’re the most expensive country in the Eurozone for buying booze, we’re approximately 70% above the Eurozone average. The Support Your Local campaign has bought many different parts of the industry together to put a more unified voice to Government but this step by the publicans alone has the ability to put the issue front and centre of the consumers themselves.
Tax is certainly a complex issue and one that many admit to neither understanding nor having any real interest in. But when it comes to what we buy, we should really pay attention. Excise and VAT hit us where it hurts. We often hear about the regressive nature of them and they are, hitting lower income earners disproportionately. They’re a direct tax on the consumer because more likely than not they’re passed on in full to consumers in the form of higher prices. In fact our inflation level has remained largely constant but the proportion of alcohol’s contribution to the overall inflation level has steadily increased.
No tax day today! Come in & see how much tax is on alcohol in Ireland. The drinks shown would cost €135.60!! #wow pic.twitter.com/EzmA9YhmAf
— The Merrion Inn (@THEMERRIONINN) September 25, 2014
With less than three weeks to Budget Day, the campaign is gaining momentum. Will it have the same result as the campaign to retain the 9% VAT rate for the tourism sector? It’s strange for tourists to see the likes of Jameson whisky more expensive in Ireland than at home. However, I would hope that Government pays close attention the effects that excise coupled with VAT is having on the domestic economy. Halting the increase in excise duties would help, just that little bit.
We simply have to get away from the Economics 101 practice of budgeting. It should not be a case of when in doubt, look to the “usual suspects” to raise cash. We’ve a burgeoning indigenous alcohol industry and taxing their product out of the market will help no one in the long term.