| Submit your comments on this article |
| Europe |
| Britain gets dunked in the EU’s VAT...(via Samizdata) |
| 2003-07-17 |
| (Edited for length) The Treasury vowed last night to veto a "ridiculous" Brussels plan for VAT reform that would mean scrapping the British exemption for children’s clothes while reducing the rate charged by restaurants in France. Ministers reacted angrily to a European Commission proposal for simplifying the VAT regime across the EU that would give tax breaks to the French while penalising British parents. Frits Bolkestein, the EU’s Dutch tax commissioner, admitted that the tax on children’s clothing could rise to 17.5 per cent - the British rate of VAT - but that the move was necessary to end what he said was unfair economic distortion. The scheme was voted through after a stormy session of the College, the top policy-making body, during which four commissioners objected including Neil Kinnock, the former Labour leader. He warned his colleagues that it was senseless for Brussels to pick a fight with the British government on a highly emotional issue it was bound to lose. Children’s clothes, along with books and newspapers, are among the goods that are exempt from VAT. Labour promised in its last manifesto to defend zero-rating against any EU attempt to abolish it. The scheme unveiled yesterday is part of the continuing attempt by Brussels to force through tax harmonisation - standardising tax rates across the EU. Gordon Brown has rejected the suggestion, claiming that taxation is a matter for national parliaments. The Commission scheme to "streamline" VAT would abolish zero-rating on children’s clothes and shoes in Britain and Ireland, ending the permanent opt-outs the countries secured when they joined the EC in the 1970s. ...a typically postmodernist definition of "permanent" from our EU friends. But following intense lobbying by Jacques Chirac, the French president, for a special exemption on restaurant bills, the Commission proposes to cut VAT rates for French diners from the present 19.6 per cent to as low as 5.5 per cent. Ahh, more French "cultural exceptionalism" in action. Also, the Dutch will retain a zero rate for their cut-flower industry and the Italian media empire of Silvio Berlusconi will be spared VAT on broadcasting. It’s good to have the Presidency |
| Posted by:Ernest Brown |