MARCH/APRIL 1980
NEWSLETTER
LTD. Thomas Prior House, Merrion Road, Ballsbridge, Dublin 4 Telephone 01 680764
Craftsmen Shocked by VAT Increase The 1980 Budget increase in VAT on the general category band from 20% to 25% has shocked craftsmen throughout the country. The general implication that this tax category includes such products as furniture, domestic appliances, hardware and other industrially produced and often imported goods, and hence is a justified tax on spending, forgets that this tax also applies to crafts. While industrial products can stand the extra 5 per cent, which will be paid because some of them may be regarded as necessities or manufacturers may make compensatory adjustments, the products of the crafts sector are much more sensitive to extra retail costs. Certainly, no craftsman can hope to make a price adjustment to compensate for the 5 per cent. The craftsman gets little enough of the retail price anyway and, when compared with the full retail price plus VAT, what the craftsman can take as a reasonable margin is very small indeed. The major problem is that the products of the craftsman are not necessities: they are in the general area of gifts, or purchases of a non-essential nature. They are bought because of their intrinsic craftsmanship and design, because they are different and distinctive, and it thus becomes more difficult to justify their price in terms of economic stricture. In such a case, the customer does not consider taking into account those indefinable values and tends to make judgements on more practical terms. This is even more true of the major customer, the tourist. This year, with every other cost of the holiday rising, the disposable money for gifts will be tight and the value of every purchase examined closely.
With products which are in themselves good value, an added 25% does make good value look a bit poorer. Many tourists will compare Irish values for value at home where the VAT is much lower. The craft sector is the smallest and most vulnerable part of the small industry field. It is the one with great potential. It is the area in which growth can be achieved at little cost to the State and in which the Crafts Council of Ireland has been encouraging growth, through such activities as the National Crafts Trade Fair and more flexible attitudes to grants. The Crafts Council has made an official approach to the Minister of State in whose area of responsibility it lies, making certain recommendations and suggestions as to how the crafts sector might be given relief or special consideration. The possibility of any reduction from 20% is remote. But other possibilities remain which might—if they can be acted upon—reduce the effect. The craft sector is small in terms of voting power, so does not carry the wallop that the farmers or the trades unionists can. The flood of cheap imports of crafts, or semi-crafts, from cheap labour countries is a drain on the economy. Our overall import bill is already too high. Our craftsmen can produce all that is required of good quality crafts if they can be encouraged to do so. A five per cent price rise to the potential customer for crafts is no encouragement.
New Chairman for Crafts Council Miss Blanaid Reddin was elected Chairman of Crafts Council of Ireland after the Annual General Meeting on 22 April. In her role as Product Adviser of Bord Failte's Visitor Purchases Section, Miss Reddin is known to craftsmen and craft shops all over Ireland. She has been a member of the Management Committee of the Council and of various sub-committees from its incorporation in 1976 and has played a significant part in the development of the crafts sector in Ireland.