Vol. 423 No. 1
125 Mr. Barry asked the Minister for Finance if he will extend the new regulations governing VAT at the point of entry for EC countries which will be coming into effect on 1st January, 1993, to imports from third world countries as a contribution towards aiding the economies of these countries.
The application of VAT at point of entry must cease with effect from 1 January 1993 in so far as intra-Community trade is concerned because its continuation would not be compatible with the abol-ition of fiscal frontiers. Dismantling this regime will cost the Exchequer some £200 million for Community goods alone and a loss of this magnitude will pose considerable difficulties in the context of the 1993 budgetary arithmetic.
Abolition of VAT at point of entry on non-Community goods would cost some £50 million and this further loss would be unsustainable next year. Accordingly, I have decided that this aspect of the import regime will have to be retained. This is wholly permissible under Community law and I understand that the majority of member states will be pursuing the same path as Ireland in this regard.
Even if it were feasible to allow imports from "third world" countries to enter the State free of VAT — they would still become liable to VAT at a later point — it is not apparent that this would contribute in any significant way to furthering their economic development.
