asked the Minister for Finance if indirect tax levels will be harmonised in member states in 1992, in line with the Commission intentions; and if he will indicate the likely gains and losses for the Irish Exchequer under each tax heading, if harmonisation at present average EC tax levels were achieved; and if he will make a statement on the matter.
Written Answers. - Indirect Tax Levels.
31.
1992 is the target date proposed in the European Commission's proposals for harmonisation of indirect taxes which were recently made public. These proposals are currently being examined by member states of the Community and have yet to be discussed by the Council of Ministers. Considerable discussion and negotiation may be anticipated before the proposals are adopted finally. It is not possible to indicate at this stage the likely outcome of this discussion and whether the target date for implementation will be adhered to.
An indication of likely gains and losses under specific headings could prove misleading as, particularly in relation to VAT, there is a wide range of possible options open to member states. However, a preliminary assessment suggests that implementation of the Commission proposals as they stand would result in a substantial revenue loss to the Exchequer of the order of £350 million, excluding the once off revenue loss arising from the abolition of VAT at point of entry (estimated at £120 million). The revenue loss would arise principally on excise duties.
While the Government are generally in favour of the principle of harmonisation, it is clear that a loss of the order mentioned would have very serious consequences for the Exchequer and that some means of compensation for such a loss would have to be found.
It is important to bear in mind that the Commission proposals are simply the starting point for detailed negotiations among member states and that the final arrangements may turn out to be quite different.