Dáil Éireann debate -
Tuesday, 24 Jan 1995

Vol. 447 No. 11

Written Answers. - Greyhound Food Manufacturers.

Michael Creed

Question:

72 Mr. Creed asked the Minister for Finance if his attention has been drawn to the competitive disadvantage which greyhound food manufacturers suffer in this country due to the 21 per cent VAT rate here as compared to zero per cent VAT in Northern Ireland and the United Kingdom; if his attention has further been drawn to the threat to employment in the industry; and if he will review the matter in the context of the forthcoming budget. [1263/95]

Minister for Finance (Mr. Quinn)

I can confirm that I have received representations from greyhound food manufacturers here regarding their concerns at a recent reinterpretation of a long-standing, specific provision in the UK VAT code which has resulted in the zero rating of greyhound food in that jurisdiction.

Current Irish VAT law is not open to interpretation in a way which would allow for a similar rating of greyhound food in this country. Any action to change our law in that regard could be open to challenge in the European Court of Justice on the grounds that it would be in breach of EU VAT law which prohibits the introduction of new zero rates.

The allegations about competitive distortions should be viewed in context. Since the normal rules for controlling intra-Community trade apply in this instance, the scope for distortion should be limited. In the first place, UK-manufactured greyhound food sold here continues to be liable to the standard rate of VAT. If UK-based manufacturers sell to customers here directly from the UK, they will be required to register for VAT in the State if their sales to unregistered persons exceed £27,000 in any 12 month period. While unregistered greyhound breeders are free to travel to Northern Ireland to buy feeding stuffs there for their own animals, it is difficult to see how this would be a viable option for many breeders.

Finally, as VAT-registered greyhound breeders are entitled to recover their VAT inputs in full, there should be no incentive for them to change their supplies of food to UK manufacturers.

Nevertheless, I am mindful of the particular concerns expressed by the industry and, in that context, the Revenue Commissioners have been asked to ensure that the various administrative and legislative procedures outlined above are operating satisfactorily in relation to greyhound feeds.