The Irish Brexit border has become one of the most vexed questions in the entire Brexit debate, and yet there exists in the United States a perfect working model for how the movement and taxation of goods and services can be dealt with across a state border without the need for a physical barrier.
I’m fortunate to have worked in the United States and as a result I’ve got first-hand experience of how the different taxation rates applied in different states are managed, and I’ve also driven between a number of states and never experienced a hard border or any of the “chaos” we are told to expect from a Northern Ireland Brexit border. The reason? Those trading between states are expected to accurately report and pay sales taxes on goods sold on a state by state basis, and they do this as a matter of course. In the United States, no national rate of sales tax exists (Like 20% VAT in the UK) instead sales tax is determined at the state level and while some states (Alaska, Delaware, Montana, New Hampshire and Oregon) do not impose any sales taxes, in others the total sales tax burden including county taxes can be as much as 11%. Of course, if sales are made to a busibess rather than a consumer, then sales taxes aren’t applied but where goods are sold B2B rather than direct to consumers, then the receiving party has to provide certification that they are then responsible for the on-selling of the goods and the collection of the taxes. It’s a system that works and in my opinion a similar system of self-reporting could be applied in Ireland.
Now I’m not suggesting that tariffs are the same as sales taxes, but I am suggesting that in the modern day and age where electronic monitoring of the movement of goods is done as a matter of course, it should be easy for businesses to self-report on the movement of their goods across borders via a monthly or quarterly electronic return, exactly as businesses in the USA report and pay their consumer sales taxes. No need for delays and no need for a hard Brexit border.
Anyone else experienced a similar system or got an opinion of how best to manage the question of Northern Ireland, we’ll be glad to hear from you.