Dáil Éireann debate -
Tuesday, 15 Jun 1993

Vol. 432 No. 3

Written Answers. - Finance Bill Implications.

Robert Molloy

Question:

29 Mr. Molloy asked the Minister for Finance the beneficial impact, with regard to the Finance Bill as recently passed by Dáil Éireann, on Exchequer receipts and cash-flow in December 1993, under section 92 and the implications for cash-flow of the application of section 93 in early 1994; and the estimated real economic worth and value of this exercise.

Minister for Finance (Mr. B. Ahern)

With regard to the first part of the question I would refer the Deputy to the reply given to a parliamentary question from Deputy Cox on 25 May last on the same matter. Essentially, the advance payment measure under section 92 will give rise to an estimated cash-flow gain of £145 million to the Exchequer in December 1993. Under either sections 92 or 93 this amount will be credited in total against the November/December VAT liability of the traders concerned which falls due for payment by 19 January 1994.

The advance payment initiative, which will impact on the 2,000 largest remitters out of a total VAT registered population of over 125,000 arises, as the Deputy will be aware, because of the abolition, from 1 January last, of VAT at point of entry for intra-Community trade. The format of the measure ensures that the business community retains the benefit of the cash-flow gain thus arising for most of the year. I believe that the balanced nature of this approach has been accepted by business generally. From the Exchequer viewpoint, the initiative disposes of the need to recoup the revenues involved elsewhere, either through other taxation measures or by increased borrowing, and confirms the Government's commitment to sound financial management in accordance with the European Monetary Union convergence criteria.