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Dáil Éireann debate -
Tuesday, 15 Jun 1976

Vol. 291 No. 7

Ceisteanna—Questions. Oral Answers. - Value-Added Tax.


asked the Minister for Finance the estimated revenue which will accrue to the State during the current financial year from the imposition of value-added tax upon new pianos.

Arising from the Minister's reply I should like to ask two supplementaries on this rather esoteric question. I understand from the largest piano supplier in Ireland that the average piano costs £1,000, that they sell 150 per year, that the cost to the State is £30,000 and that the average piano is bought by a mother who wishes her child to pursue a musical education. Does the Minister consider that the gain of £30,000, or whatever figure he mentioned, to the State is a valid tax upon what is alleged to be a musical nation?

The figure supplied to me by the Revenue Commissioners is £55,000 and I have no reason to doubt that figure. Of course, it is possible to buy pianos other than new pianos. There are many excellent built-up pianos so that a mother anxious to impart musical training to her children can do this without investing £1,000 for a new piano. I can understand the Deputy's anxiety to make this facility available at a lower cost but there are many goods and services subject to VAT for which a very good case can be made in isolation but I am afraid the Exchequer is in the position that it must take a neutral stand and not proceed to use the fiscal laws of the country for the purpose of advancing the merits of each case.

My second question to the Minister is, would it tax his fluency if I asked him if he was aware of the famous idiom ne tirez sur la pianiste?

I think the Deputy is striking the right note.


asked the Minister for Finance if he will consider exempting musical instruments such as pianos from VAT.

Sales of new musical instruments, including pianos, are liable to VAT at the rate of 20 per cent and sales of second-hand musical instruments, including pianos, are liable to VAT at the rate of 10 per cent. There could be no justification for giving musical instruments more favourable VAT treatment than other goods subject to the same VAT rates. Accordingly, I must reply in the negative.

Would the Minister tell us whatever happened to the Kennedy Hall?

The Kennedy Hall is still rising.


asked the Minister for Finance if he will extend the tax exemption provisions for creative writers living in Ireland to other practitioners of cultural activity, for example, musicians, especially in respect of earnings by them outside the State.

I am not satisfied that I would be justified in introducing legislation to extend the relief granted by the provisions of section 2 of the Finance Act, 1969, particularly in view of the Government's view that as a general principle equivalent incomes should bear equivalent amounts of tax.

Would the Minister not agree that, given the extremely beneficial and proper legislation introduced by Deputy Haughey when Minister for Finance exempting Englishmen, Frenchmen, Americans and sundry other types from Irish taxation, more is done for the Irish image in Europe by people like, at one end of the scale, Ronnie Drew and the Dubliners, and, at the other end of the scale, Frank Patterson and Bernadette Greevy, in popularising Irish music on the continent? Would he agree that these people are doing a job for this country which the lounge lizards of Longford-Westmeath are not doing?

There are many activities which one would like to exempt from income tax.

The Minister is not including, I assume, that late President's sex life?

I am dealing with music at the moment and we will stick to that field. It is wrong to assume that one particular activity is more worthy of tax relief than others. I accept all the Deputy has said about the contribution to music in general and Ireland's cultural image in particular arising out of the activities of the persons to whom he referred, but I would find it very difficult, for instance, to justify granting exemption to some international star who can make more in a one night stand than many a hard working person can make in one year.

This is an extremely serious matter. Is the Minister aware that one can become elected to the Dáil at the age of 25 and pursue a career which continues to the age of 90 while some of these performers of music have perhaps a ten year career, like boxers, but they are subject to penal income tax? The exemptions so gracefully given by Deputy Haughey should be extended to all people whose earning career is similar and short lived.

Listening to some of the sounds emanating from some of these people I am surprised if they would survive even ten years. Several of them sound as though they are dying in the process of singing.


asked the Minister for Finance the total amount of VAT collected on (a) national newspapers and (b) provincial newspapers during each of the past five financial years.

Returns made by tax payers for value-added tax purposes give only the total turnover liable at different tax rates and the appropriate tax. A return made by a newsagent does not distinguish between sales of newspapers and sales of other goods liable at the same rate. It is not possible, therefore, to state the tax receipts from national and provincial newspapers.

Has the Minister any figures to cover national and provincial newspapers? He must have some estimate of the amount of money paid in VAT by the newspaper industry.

From the VAT returns this information is not available. The estimates of the Revenue Commissioners which are based on such information as is available about newspaper circulation indicates that VAT on newspapers of all kinds, provincial, national and imported, is £2.8 million, and £1 million on magazines, many of which are classified as newspapers.

Is that for the final year mentioned in my question?

Has the Minister an estimated figure for the first year? There are five years covered in the question.

The figure given is the annual estimated return of VAT on newspapers.

Is the Minister aware that in an earlier reply today it was shown that the cost of newsprint imports for use in national and provincial newspapers in 1971 was £3 million and in 1975 for a similar amount of newsprint it was close on £7 million? Would the Minister not agree that there is a very good case for exempting the national and provincial newspaper industries both of which are now in serious difficulties, from VAT?

First, I do not accept that the difficulties of any business are attributable to VAT which is a tax paid by the purchaser or consumer, not by the industry itself. Secondly, it is wrong to assume that if VAT is removed an industry will benefit. If VAT is removed it is the consumer who must benefit, not the producer of the goods. Therefore, it is an empty argument to suggest that VAT is the cause of difficulties. It is not a tax borne by an industry; it is a tax paid by the consumer and further, it is not open to this country to remove VAT from any commodity which is produced in Ireland without giving a similar concession to a similar commodity coming in from abroad. Any relief would be an omnibus relief which would apply to newspapers other than Irish-produced newspapers.

Surely the Minister can deal with imports of newspapers in a different way from the manner in which he deals with the newspaper industry here? Surely he must agree that where VAT is either added or increased substantially the newspaper industry must pass it on and that the industry will suffer very substantially as a result? They have suffered by increasing the cost of their newspapers to the public.

No, this is not established. The pattern of purchase can be quite different——

Would the Minister not agree that the newspaper industry here at all levels is in very serious difficulties at present?

I am not in a position to comment on that.