asked the Minister for Finance if he will consider zero rating for VAT purposes power washers purchased by small farmers who are not registered for VAT and who have to purchase these washers to clean their milking parlours and farmyards.
Written Answers. - VAT Rate.
582.
Mr. Coughlan
I do not propose to zero-rate power washers. I accept, however, that the VAT rate on such items at 35 per cent, is high. The recently published national plan indicated that the reason why this rate is at the present level is the fact that a very wide range of goods is currently liable at the zero or at a low VAT rate. Further additions to this range of goods would not assist in any moves to effect a reduction in the 35 per cent rate. The Deputy will be aware that the plan made it clear that there would be reductions, on a selective basis, in the high rates of VAT, and also, that the number of rates would be reduced in so far as this was possible.
Unregistered farmers are compensated, on an overall basis, for the VAT paid on their business inputs by means of the 2 per cent flat-rate addition to their prices when selling agricultural goods and services to VAT-registered traders. The flat-rate addition is calculated having regard to, inter alia, the VAT paid on purchases of farm machinery.