The telecommunications sector has called on the Government to implement a Vat reduction for broadband to 13.5% in the October 1 budget.
In its pre-budget submission, the Telecommunications Industry Ireland (TII), which represents mobile and broadband providers in Ireland, said the rate reduction on internet access services will help achieve the National Connectivity Strategy of promoting fibre and 5G.
Under the strategy, the Government plans to have all Irish households and businesses covered by a gigabit network by 2028.
The TII’s calls for a reduction in Vat comes after the vast majority of broadband providers increased prices earlier this year, with further hikes coming down the line annually going forward.
According to ComReg, the majority of providers now include a built-in price increase in new contracts which is either based on the rate of inflation, a fixed percentage or both.
This price increase usually takes place automatically in April each year.
TII director Torlach Denihan said the reduction in the Vat rate “is a critical step in ensuring that the benefits of very high-capacity networks are spread as widely as possible”.
In its submission, TII is also calling for an extension to the trading online voucher scheme to incentivise SME take-up of very high-capacity networks, funding for a fit for purpose mobile public warning system, as well as funding to increase the security of Ireland’s subsea cables in line with EU policy.
With the budget just over two weeks away, numerous sectors have been issuing calls for the Government to reduce tax rates given the large surpluses it is currently running.
The hospitality and tourism sector has been calling for the reintroduction of the 9% Vat rate, which lapsed in September last year.
A Department of Finance report found that reinstating this rate would cost €764m during a full year.
If it was limited to just food companies, it would cost €545m.
The Government has said there will be a €1.4bn tax package in this year’s budget with most of that going to income tax adjustments.
