andMr. Timmins asked the Minister for Finance whether the introduction of value added tax is likely to result in a lowering of the rates of income tax payable at present.
25.
Ceisteanna — Questions. Oral Answers. - Value Added Tax.
24.
andMr. Timmins asked the Minister for Finance whether the introduction of value added tax is calculated to make more money available for social welfare benefits than is available at present from the taxes which it will replace.
With your permission, a Cheann Comhairle, I propose to take Questions Nos. 24 and 25 together. As stated in the White Paper on the proposals for a value added tax, my intention is that the change-over will be mainly in the method of collection of sales taxation, and the overall yield from the value added tax is expected to be the same as from the existing retail and wholesale taxes combined. The answer to both questions is, therefore, in the negative.
Does the Minister not agree that by introducing VAT a wider net will be applied?
Yes, that is so.
Will there not be increased yield?
No, it is not expected that there will be. It could be that there will be a greater yield at a later stage and, of course, the rates could be altered later. On its introduction it is intended and expected that the yield will be approximately the same as on the existing wholesale and turnover taxes.
Does that mean that the Minister might already be contemplating an increase?
No. I am pointing out that there are variations possible in the rates. The Deputy, having done his homework, will be aware of what is going on in the EEC in regard to harmonisation of rates and the incidence of VAT.
We are harmonising the rates but not the benefits.
All in good time.
You are very quick about harmonising the rates.
The Deputy wants it done even before the value added tax is in operation.