Labour's VAT hike will hit least-well-off hardest, says Pádraig Mac Lochlainn

Pádraig Mac Lochlainn

THE Labour Party are "all over the place" on tax and changing policy every day in their haste to get into power with Fine Gael, Sinn Féin Councillor Pádraig Mac Lochlainn (Donegal North-East) has said after the Labour Party said it would increase the VAT rate by 1%.

Describing VAT as "a stealth tax", Councillor Mac Lochlainn said another increase will hit the least-well-off hardest and have a huge impact on consumer spending, driving people across the border for shopping.

Councillor Mac Lochlainn said:

The Labour Party are all over the place on tax, they are changing their policy to suit different interests every day. This proposal on VAT is clearly to suit their future coalition partners in Fine Gael.

VAT is a stealth tax which impacts disproportionately on the least-well-off.  It will also have a huge impact on consumer spending, forcing people struggling to cope with rising prices across the border for shopping. As someone from a border county I know all too well the effects this has on small businesses on the border.

He said Sinn Féin has proposed a range of options for reform of the taxation system which do not place the burden on struggling families but instead make the wealthy pay their fair share.

We have proposed a 1% Wealth Tax which would raise €1billion per year; we have also proposed a new third rate of tax of 48% for those earning over €100,000 per year and – until recently – the Labour Party supported us in this proposal.

If the Labour Party were truly a party of the Left they would be looking at how to protect those on low and middle incomes and the unemployed. They would be concentrating on reforming the taxation system to make it fair. Instead, they are choosing to propose VAT increases which they know will impact disproportionately on struggling people. They are choosing to fall into line with Fine Gael.

The Labour Party need to make their minds up. The people want a real, fairer alternative. This is not it.