Dáil Éireann debate -
Tuesday, 12 Oct 1993

Vol. 434 No. 4

Written Answers. - VAT Refund Orders.

Máirín Quill

Question:

65 Miss Quill asked the Minister for Finance if, in view of the widespread interest expressed by Government and Opposition Deputies during the Committee Stage of the Finance Bill, 1993, he will use his powers under the Value-Added Tax Act to make refund orders in respect of equipment provided for schools by parents, parents associations or other benefactors, where such equipment is wholly and exclusively for use by the school, is duly vouched for by the school authorities and is certified by the Minister for Education.

Minister for Finance (Mr. B. Ahern)

The Deputy will be aware that section 20, subsection 3, of the VAT Act empowers me to make refund orders in respect of VAT borne which does not qualify for deduction in the normal way, subject to whatever conditions are considered necessary. Some existing refund schemes operate for social and philanthropic purposes, for example, the scheme for certain medical equipment purchased by voluntary subscription.

I have given the question of making a refund order in relation to gifts or donations of equipment for schools very careful consideration following the extensive debate on this issue during Committee Stage of the 1993 Finance Act, but I have not yet reached a final conclusion in the matter. I am particularly appreciative of the sterling work on fund raising done by parents committees and others for schools, which is, I believe, acknowledged by all.

Apart from the general question of the appropriateness of using the tax system in the way proposed, it may be that such a scheme would not be of any significant benefit to the schools which are most in need. On the contrary, indeed, it could be the children of the better-off who would be likely to benefit most. It is in the area of meeting the basic needs of schools that the State must direct its scarce resources and, arguably, this is best done through the capitation grant system. Deputies will be aware that the capitation grants were increased significantly this year.

Finally, the cost implications of any concession will have to be assessed carefully. Deputies will appreciate that once such a concession was granted, it would, in equity, be very difficult to confine it to particular areas of education or, indeed, to education alone; charitable bodies generally would undoutedly press their claims for similar treatment.