asked the Minister for Finance if he agrees that the levying of value-added tax on the fees of consultants employed by voluntary community-based organisations acts as a major disincentive to these community bodies; and if he will have this unjust taxation removed forthwith.
Written Answers. - VAT on Consultants' Fees.
112.
VAT applies to the fees charged by most consultants, generally at the 23 per cent rate. It would be neither possible nor desirable in the context of the operation of a general sales tax such as VAT to require that the tax should or should not apply simply on the basis of the status of the person or persons to whom a consultant was providing his services. VAT applies to the supply of most goods and services, the bulk of which are liable at the 23 per cent rate. I do not consider that the application of this rate to consultants fees is any more unjust than the application of the same rate to these other goods and services or acts as a major disincentive. I do not propose therefore to remove VAT from the fees of consultants employed by voluntary organisations.