asked the Minister for Finance if he will reduce the rate of VAT on blankets and rugs from 19.50 per cent to zero for a woollen mills (name supplied) in Foxford, County Mayo, in view of the difficulty they have in keeping people employed; and if he will make a statement on the matter.
Written Answers. - Blankets and Rugs VAT.
161.
Value-added tax is a general tax on the consumption of goods and services and the burden is ultimately borne by consumers buying at retail level. Under the VAT system it would be quite impracticable—even if it were desirable—to have for the same types of goods different tax rates depending on the circumstances of different manufacturers or the stage of distribution.
The 19.5 per cent rate of VAT applies to wide ranges of goods and it would be invidious to select some lines for special treatment in order to benefit particular undertakings. Furthermore, it is not permissible under EEC provisions to apply different rates of VAT to goods of Irish and foreign origin. Any VAT concessions would have to be general in their application and, coming on top of the zero-ratings which I announced last June, could have considerable budgetary implications.
For the various reasons mentioned it is not possible to accept the suggestion outlined in the Deputy's question.