MLA blasts 'Alliance tax' on small parcels - warning hundreds of millions which could be spent on public services will go to EU
Hundreds of millions of pounds will be “sucked out” of the local economy and into EU coffers under a new Brussels tax on small parcels entering Northern Ireland – money that could be spent on schools, policing and fixing Lough Neagh, an MLA has warned.
Steve Aiken has branded it the ‘Alliance tax’, accusing his political rivals of championing the European Union “at every opportunity” and failing to realise the economic damage caused by the Windsor Framework.
The Ulster Unionist Party economy spokesperson has also said that HM Revenue & Customs will collect the tax – before passing it on to to Brussels.
An Alliance Party spokesperson said Mr Aiken’s comments were “nonsensical” and accused him of “scaremongering” – saying it would continue to press for a UK-EU customs union.
The post-Brexit trade arrangements mean that Northern Ireland, unlike the rest of the UK, remains subject to EU rules on imports. This means that, with some exceptions for certain retail businesses, Brussels rules must be followed.
Last week, the assembly rejected a DUP motion opposing the parcels tax and calling for the restoration of sovereignty and democratic decision making over all aspects of UK trade.
It was backed by unionist parties, but voted down by Sinn Fein, Alliance and the SDLP.
Unionist parties have singled out Alliance over the Irish Sea border, accusing them of repeatedly siding with nationalists on the issue.
The new charges on parcels will be effective from July. EU governments recently agreed to scrap an exemption on products with a value of less than €150 (£130) – meaning all e-commerce parcels entering the EU and NI will be subject to charges, regardless of their value.
Speaking in the assembly yesterday, Mr Aiken told MLAs that he would call it “the tax of the rigorous implementers, or shortened to the ‘Alliance Tax’.”
“These changes rule that the Duty Relief Regulation exemption from customs duty for consignments valued under €150 are to be rescinded – and that a flat €3 fee would be applied to all non-excise goods imported.
“In simple terms that will mean any parcels coming in from outside the EU, within an EU designated customs area, like Northern Ireland is, will be subject to this charge.
“Additionally, in order to pay for the new EU Customs Authority, an extra charge of €2 per item will be added in the near future to the Alliance tax, bringing it up to €5 per item.
“The Alliance tax raised will be collected by HMRC, then passed to the EU,” the South Antrim MLA said.
He then estimated a cost to the Northern Ireland economy from the charge, based on his estimation of how many parcels households and businesses receive per week.
“That would mean a total Alliance tax of €810.6m or £703.7m per annum going to Brussels. That’s £703.7m of revenue sucked out of Northern Ireland families, businesses, farmers, and out of our economy.
“Mr Speaker this £703m Alliance tax could go a very long way to fixing our crumbling water infrastructure, paying for 7,500 PSNI officers, fixing our education system, and we could even use it to help to fix Lough Neagh.
“But this Alliance tax will be going straight to the EU, not to our NI Executive.
“The Alliance tax is just one of many Windsor Framework charges that we will be subject to – when this Alliance tax is extorted from us, let that name just remind your who champions the EU at every opportunity.”
An Alliance Party spokesperson told the News Letter: “It is telling, instead of confronting the DUP, who delivered Brexit and falsely claimed the Irish Sea border had been removed, Mr Aiken attacked Alliance”.
They said that the UK and EU are currently considering customs changes in relation to e-commerce – arguing that it is vital they both “cooperate to avoid unnecessary and unintended charges applying in Northern Ireland”.
“We continue to press for a UK-EU customs union to remove burdensome Brexit bureaucracy and ensure the free flow of trade both East-West and North-South.
“That is what is in the interests of businesses, not scaremongering or silly soundbites”, the Alliance Party spokesperson said.