Dáil Éireann debate -
Wednesday, 17 May 2000

Vol. 519 No. 3

Written Answers - Tax Reliefs.

Paul Connaughton

Question:

160 Mr. Connaughton asked the Minister for Finance the proposals, if any, he has to reduce the VAT rate of 21% on telephone charges and the VAT rate on electricity of 12.5% for old age pensioners who are living on a fixed income; if his attention has been drawn to the fact that this is causing real financial hardship; and if he will make a statement on the matter. [13905/00]

Minister for Finance (Mr. McCreevy)

The position is governed by EU VAT law with which Irish VAT law must comply. Under the EU Sixth VAT Directive, member states may retain the zero rates they had in place on 1 January 1991, but they are prohibited from introducing new zero rates.

Electricity is subject to VAT at the 12.5% rate and in this regard, Ireland avails of certain options for reduced rating contained in EU VAT law. Telephone bills are standard rated at 21%. It is not open to me to zero rate the supply of such services and these rates must apply regardless of the user of the service. Therefore, it is not open to me to remove VAT from either telephone or electricity services supplied to elderly people.

I should say that for those people in receipt of the Free Telephone Rental Allowance, that this covers the normal two-monthly telephone instrument and the line rental charges for a standard telephone and also provides up to 20 free call units in each two-monthly billing period. For those in receipt of the Free Electricity Allowance, this covers the normal standing charge and provides 1500 free units, i.e., 200 units per two-monthly billing period in the summer and 300 units per two monthly period in the winter. In addition, it is possible to use the £5 fuel allowance, which is payable from October to April to cover electricity charges. For those in receipt of free telephone rental allowance and electricity the VAT is borne by the Department of Social, Community and Family Affairs.

John Perry

Question:

161 Mr. Perry asked the Minister for Finance if a tax free allowance will be granted to a person (details supplied) in view of the fact that is a requirement of the course his son is pursuing; and if he will make a statement on the matter. [13907/00]

Minister for Finance (Mr. McCreevy)

I assume that the Deputy is referring to tax relief for fees paid for third level education.

I am informed by the Revenue Commissioners that the inspector of taxes has no record of having received an application for tax relief from the taxpayer. The taxpayer should contact Sligo Tax Office, Cranmore Road, Sligo – telephone [phone] – with details of his son's course. The inspector will then be in a position to determine whether tax relief is due.