Gerry O'Sullivan
Question:100 Mr. G. O'Sullivan asked the Minister for Finance the estimated revenue yield from the replacement of the zero rate of VAT on food items with a 4 per cent rate; and if he will make a statement on the matter.
Written Answers. - VAT on Food.
It is assumed that the Deputy is referring to that food for human consumption which is currently zero rated. If VAT were applied at 4 per cent to such food, it is estimated that the full year yield to the Exchequer would be £92 million.
The EC Commission has proposed that, in the post-1992 system, all food should be liable to the reduced rate of VAT in the range 4 to 9 per cent. In addition, the Council has indicated that zero-rating can continue where this does not entail distortions of competition between member states. No definitive decisions have yet been taken by the Council of Finance Ministers on either the Commission's proposal or the scope of the continued application of the zero rate.