Dáil Éireann debate -
Tuesday, 16 Feb 1999

Vol. 500 No. 4

Written Answers. - Tax Reliefs.

John McGuinness

Question:

236 Mr. McGuinness asked the Minister for Finance if he will introduce legislation to recognise the development of the new concept of micro breweries; and if he will consider a staggered excise system in the context of any new legislation relating to micro breweries' potential job creation outside the major centres of employment relative to the craft brewing industry and a small percentage of production to be allocated duty free status in order to develop the tourism potential of the business. [4303/99]

Minister for Finance (Mr. McCreevy)

As I stated in reply to a parliamentary question on Tuesday 9 February 1999, Irish excise duties do not discriminate between large and small breweries and the tax system is not a source of competitive distortion.

Under Article 4.1 of Council Directive 92/83/EEC, member states may apply reduced rates of duty, which may be differentiated in accordance with the annual production of the breweries concerned, to beer brewed by independent small breweries within the following limits: the reduced rates shall not be applied to undertakings producing more than 200,000 hectolitres of beer per year; the reduced rates, which may fall below the minimum rate, shall not be set more than 50 per cent below the standard national rate of excise duty.

A few member states with traditional small artisan brewing sectors avail of this provision.

Any proposed low or staggered regime would also have to apply to imports of beer produced in small breweries in other member states in accordance with the provisions of Article 4.3 of Council Directive 92/83/EEC.

Beer excise duty is a specific tax which does not increase in relation to the value of the product. Thus a higher priced premium craft beer bears the same amount of duty as a mass produced product of the same strength and, accordingly, a lower tax share of price than that of a mass produced product. The share of price represented by total tax, including VAT, has declined from 37.6 per cent in 1994 to 35.6 per cent in 1998.

At present there are 13 micro breweries approved by the Revenue Commissioners. With regard to the potential for job creation within this industry, I believe that the overall package of measures announced in my recent budget, particularly in relation to income tax and corporation tax will help to stimulate growth in employment in all sectors, including that of the brewing industry.

While I have no plans to introduce a zero, a low or a staggered system of excise duty on beer, I will keep the matter under consideration.