asked the Minister for the Environment the amount of VAT estimated in the year 1979 on machinery and materials used by Tipperary (South Riding) County Council; how this will affect the grants from his Department; and its effect on employment in the county.
Written Answers. - County Tipperary VAT Estimates.
37.
The information requested by the Deputy in the first part of the question is not available in my Department.
The Value-Added Tax (Amendment) Act, 1978, came into operation on 1 March 1979. As a result the position whereby local authorities were deemed to be accountable for VAT at the zero rate in respect of the construction, repair, maintenance and improvement of roads, harbours and sewerage works has been discontinued. The change in VAT legislation is due to the requirements of the Sixth Directive of the EEC on VAT harmonisation in the member states.
From 1 March last local authorities are not entitled to register for VAT. As regards VAT borne on importation or paid to suppliers in respect of goods or services, the authorities are unable to obtain a credit or refund in respect of any such tax from that date.
Grants allocated to Tipperary (South Riding) County Council for road works in 1979 represent an increase of 29 per cent over the 1978 amounts. The allocation for sewerage works in 1979 represents an increase of 42 per cent over 1978. While there is no firm estimate of the extra costs as a result of the new VAT arrangements, the total increase should not be in excess of 5 per cent. Consequently no fall off in employment is expected as a result of the revised VAT arrangements.