Dáil Éireann debate -
Tuesday, 3 Oct 2000

Vol. 523 No. 1

Written Answers. - Value Added Tax.

Nora Owen

Question:

477 Mrs. Owen asked the Minister for Finance if he will consider waiving VAT requirement of 21% on certain medical products, such as injectable materials and topical ointments and creams, in view of the fact that VAT is not paid on oral medicines or asthmatic inhalers since the early 1970s; if he will have examinations made into the implications of removing VAT on such products as incontinent sheets, leg ulcer prescriptions and certain types of commodes, which are very necessary products particularly for elderly people, in view of the fact that this is the Year of the Elderly; and if he will make a statement on the matter. [20123/00]

Minister for Finance (Mr. McCreevy):

The position is governed by EU VAT law with which Irish VAT law must comply. We can retain the zero rates of VAT that were in existence up to 1 January 1991 and on that basis we can retain the zero rating for oral medicines. However, it is not within my power to introduce new zero rates for any other goods or services and it is not therefore possible for me to remove VAT on non-oral medicines.

However, it is possible under EU VAT law to introduce a reduced VAT rate for non-oral medicines. The possibility of making a change to the current VAT rates for non-oral medicines will be considered in the context of the forthcoming budget.

For a number of years, under a special refund scheme, the Value Added Tax (Refund of Tax) (No. 15) order 1981, repayment may be claimed by disabled persons of the VAT paid on certain special aids and appliances. The relief is also available in certain circumstances to persons other than disabled persons who purchase such goods for handing over to a particular disabled person.

The operation of these orders is entirely a matter for the Revenue Commissioners. Details of the scheme can be obtained from the Revenue Commissioners, VAT Refund (Unregistered) Section, Government Buildings, Kilrush Road, Ennis, County Clare.

Nora Owen

Question:

478 Mrs. Owen asked the Minister for Finance if he will have considerations made into a scheme of reclaiming VAT which is charged on phones, ESB and gas charges for all people on old age pensions; and if he will make a statement on the matter. [20124/00]

Minister for Finance (Mr. McCreevy):

As I have informed the House on several occasions recently, 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.

The supply of electricity and gas are 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. Telecommunications services are standard rated at 21%. It is not open to me to zero rate the supply of such services as these VAT rates must apply regardless of the user of the service.

I should say that for those people in receipt of free telephone rental allowance that this covers the normal two monthly telephone instrument and 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 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 free fuel allowance which is payable from mid-October to mid-April to cover electricity charges and heating bills. For those in receipt of the free schemes, the VAT is borne by the Department of Social, Community and Family Affairs.

Nora Owen

Question:

479 Mrs. Owen asked the Minister for Finance the amount of VAT which was collected from the ESB from retail accounts collected in 1998 and 1999; the number of customers involved in the payment of these particular VAT bills by the ESB; and if he will make a statement on the matter. [20125/00]

Minister for Finance (Mr. McCreevy):

I assume that the Deputy is referring to both commercial and domestic accounts. Most commercial cus tomers would be VAT registered and would be able to reclaim the VAT on their electricity bills. It would be the net VAT figure which is probably of interest to the Deputy in this case. However, VAT returns are not required to be made in a manner which identifies the yield from particular goods and services. It is estimated that the net VAT collected from the supply of electricity amounted to £61 million in 1998 and £65 million in 1999. The number of customers of any firm is not a matter for which I have responsibility.