asked the Minister for Finance the total revenue from VAT since its introduction to the latest available date; and how this figure compares with the revenue received from the wholesale and turnover tax for the corresponding period last year.
Ceisteanna—Questions. Oral Answers. - VAT Receipts.
99.
The receipts from VAT in the period from its introduction on 1st November, 1972, to 31st May, 1973, were £54,977,218. The receipts from turnover tax and wholesale tax for the corresponding period in 1971-72 were £43,145,980.
In the light of that and also in the light of the fact that there probably is increased buoyancy, would the Minister not consider it desirable to round off the VAT figures to proper figures like 5 per cent or 6 per cent and to cut out the decimal because of the fact that the idea of the decimal in the 6.75 per cent was to substitute accurately for the wholesale tax? In view of the fact that there is such a significant increase, which has not been accounted for completely by increased buoyancy, would the Minister consider rounding off the figures in the interests of traders and others?
I am not unsympathetic with the desirability of eliminating the decimal point in the VAT system.
It has been proved here that there are significant increases.
These increases have been taken into account in this year's budgetary figures. The rounding off suggested by the Deputy would have considerable monetary consequences. The lower the rate of VAT the greater is the significance of any reduction or increase. The .75 reduction on the 6.75 per cent proposed would mean a loss in revenue of about £2½ million.
The purpose of the decimal in 5.26 per cent was to compensate for the turnover tax and the wholesale tax. The turnover tax was 5 per cent which worked out in fact at 5.26 per cent. It was to bring about the necessary adjustment that the decimal was used, to make sure that the same revenue would accrue. In this case the revenue has exceeded expectations, even allowing for increased buoyancy, which would now warrant consideration of rounding off this figure which has created headaches.
The yield cannot be looked at in isolation. The cost of administration of Government services, without providing for any improvement whatsoever in the standard of those services or in the benefits to be given to recipients, increased by £122 million from last year, so that this increased yield was necessary to meet the on-going expenses of the existing administration.
That was not the reason given.
I agree. It was to compensate for the turnover tax. I do not justify this. I am indicating the problem which faces us in trying to make amends.