asked the Minister for Finance if his attention has been drawn to the representations from tourism interests concerning recent reports that following harmonisation of VAT rates within the EC a rate of 19 per cent will apply to hotels and restaurants subsequent to 1992; and if he will make a statement on the matter.
Written Answers. - VAT Rates.
67.
The EC Commission's proposals for harmonisation of indirect taxes envisage a dual VAT structure: a standard rate in the range 14 to 20 per cent which would apply to the generality of goods and services, and a reduced rate in the range 4 to 9 per cent which would apply exclusively to food, medicines, publications, fuel for lighting and heating, passenger transport and the supply of water. If the Commission proposals were implemented in their present form, therefore, the provision of meals and hotel accommodation would attract the new standard rate in the range 14 to 20 per cent. The specific rate would have to be decided in due course.
The overall proposals from the Commission are still at an early stage of discussion in the Council of Ministers. Considerable further discussion and negotiation is likely before an agreed package might emerge.