asked the Minister for Finance if he is aware of the substantial reduction in the level of employment in the Border area, in the electrical retail trade; if he is aware that this serious situation has been caused by the differential in the exchange rate between the Republic and Northern Ireland, and in particular the high level of VAT which applies on similar goods in the Republic as against Northern Ireland; if he agrees that the customs' surveillance whilst operating in the normal way is not capable of controlling the amount of goods that is being smuggled across the Border; and if he proposes to have a serious review of the situation in the interest of employment and the survival of commercial activity in the Border area particularly in County Louth.
Written Answers. - Cross Border Smuggling.
I have received various representations indicating that the electrical trade is meeting difficulties in the country generally and particularly in the Border area. I am not aware that the exchange rate between the Irish pound and the pound sterling is a significant factor. Indeed, the opposite is the case.
I accept that the level of some VAT rates is high, in particular the 23 per cent and 35 per cent rates which apply to electrical goods. A reduction in these rates would not be feasible at present unless the revenue foregone could be recovered by increases in other areas. I indicated in my budget speech that I would be looking at the possibility of a fundamental re-organisation of the VAT structure with the aim of narrowing the disparity in the rates charged on the bulk of goods and services. This review is now under way.
I have been informed by the Revenue Commissioners that a range of measures were taken during 1983 to increase customs surveillance in general in the land frontier area and seizures of substantial quantities of electrical goods were made. Moreover, considerable quantities of electrical goods were also detained for payment of duty during normal checks exercised by customs on travellers returning from Northern Ireland. These measures are being maintained and the position is being kept under constant review.