Labour MP Backs Petition To Ban VAT On IT Repairs

A Labour MP has backed a campaign to lift value-added tax (VAT) from computer and communications repairs, in order to boost re-use and reduce the country’s environmental footprint.

MP Mark Tami has backed a petition to lift VAT from ICT repairs, which is now live at the Ten Downing Street site. The MP for Alyn and Deeside has written to the chancellor Alistair Darling, outlining the environmental benefits of the move, which include improving the trade balance, building local high-tech skills and reducing landfill, as well as reducing carbon fooptprint by encouraging individuals and businesses to use products for as long as possible.

Green benefits for the whole lifecycle

“There are huge environmental arguments in favour of tax incentives for individuals and businesses that want to maintain their existing ICT products, yet until now the government has ignored our advice,” said Askar Sheibani (left), CEO of Comtek, the IT firm which launched the petition.

“We’re delighted to have Mark’s support and we hope that his endorsement will cause the Treasury to sit up and take notice.  The ICT industry has a massive carbon footprint caused by energy-intensive manufacturing processes, and this will continue to grow unless we can reduce demand for new products.  Repair is by far the most effective means of doing so – providing people find it practical and affordable.”

Green moves in the budget included a two billion GBP ‘green bank’, but calls for VAT-free repairs have been ignored so far. The moves would also be unpopular with manufacturers such as Intel IBM and Dell, who argue that replacing old hardware with new kit, such as servers based on the Xeon 7500 launched this week, should be done immediately instead of keeping the older equipment going.

Critics point out that arguments for replacing kit on green grounds are normally based on energy use in the product’s useful life, not on the entire lifecycle cost including manufacturing and disposal. The product lifecycle can also include ethical issues regarding the labour used in manufacture, and the disposal of hazardous chemicals when equipment is disposed of.

The petition has also been backed by public sector leaders: “Removing the VAT on repairs to used ICT equipment would be a tremendous benefit to the refurbishment community and could potentially tip the scales in the right direction,” said Catalina McGregor, UN ITU Green ICT Liaison Officer to the OECD and EC.