I move:
(1) That in this Resolution—
"the Principal Act" means the Value-Added Tax Act, 1972 (No. 22 of 1972);
"the Act of 1988" means the Finance Act, 1988 (No. 12 of 1988).
(2) That the rate of flat-rate addition to prices of agricultural produce or agricultural services supplied by unregistered farmers be increased from 1.4 per cent to 2 per cent, and
that accordingly, section 12A (inserted by the Value-Added Tax (Amendment) Act, 1978 (No. 34 of 1978) of the Principal Act be amended by the substitution of "2 per cent." for "1.4 per cent." (inserted by the Act of 1988).
(3) That the charge of value-added tax on livestock be increased from 1.4 per cent to 2 per cent of the taxable amount or value of such goods, and
that accordingly, section 11 (1) (inserted by the Finance Act, 1985 (No. 10 of 1985) of the Principal Act be amended by the substitution in paragraph (d) of "2 per cent." for "1.4 per cent." (inserted by the Act of 1988).
(4) That this Resolution shall have effect as on and from the 1st day of March, 1989.
(5) It is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).
This resolution proposes to increase from 1.4 per cent to 2 per cent the flat rate compensation for farmers together with a similar increase in the VAT rate on livestock. The changes will take effect from 1 March next. In his Budget Statement today the Minister for Finance explained the reason for this change. Perhaps I could outline it again very briefly. As most Deputies will recall, the rate of refunded VAT for unregistered farmers was reduced by the Minister for Finance from 2.4 per cent to 1.4 per cent because, by and large, farmers were not paying their appropriate contributions in the form of levies of one kind or another. To compensate the Exchequer for the fact that these payments were not being made by farmers the rate of refunded VAT was reduced. During 1988 the farming community did pay up very substantially in so far as these particular duties and levies are concerned. As a result the Minister for Finance decided that it would be reasonable and fair to somewhat restore, not totally, the rate of refunded VAT for farmers. It is being increased from 1.4 per cent to 2 per cent. At the same time there is a similar increase in the rate of VAT charged on livestock to unregistered farmers.