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Dáil Éireann debate -
Tuesday, 30 Jan 2001

Vol. 529 No. 1

Written Answers. - VAT Statistics.

Thomas P. Broughan

Question:

495 Mr. Broughan asked the Minister for Finance the amounts of VAT collected during 1996, 1997, 1998, 1999 and 2000; the amount and percentage of this which was paid to the EU each year; and if he has considered committing any further VAT reductions to local Government as an optional local sales tax. [2057/01]

Net VAT receipts for the years 1996 to 2000 inclusive are as follows:

Year

£m

1996

3,109.3

1997

3,706.8

1998

4,267

1999

4,894.6

Provisional 2000

5,881

The EU budget is largely funded by payments from member states known as own resources. These are comprised of traditional own resources – customs duties, agricultural levies and sugar levies – a VAT resource and a GNP resource. Ireland's VAT resource payments to the EU budget are not a fixed percentage of Ireland's VAT receipts. The VAT resource is a certain percentage of each member states' VAT base calculated on a harmonised basis. However, a system of capping of the bases in terms of percentages of GNP is in place to help neutralise discrepancies between the VAT bases of different member states. Ireland's VAT base has been capped at 50% of GNP since 1995. In other words, when the Irish VAT base, on a harmonised basis, is greater than 50% of GNP in a given year, Ireland's liability to the EU budget in respect of the VAT resource is calculated by applying the percentage call up rate to 50% of GNP, rather than to the actual VAT base. Finally, the percentage maximum call-up rate for the VAT resource was reduced in even steps from 1.32% in 1995 to 1% in 1999.
Ireland's contribution to the EU budget in respect of the VAT resource for each of the years 1996-2000 is set out as follows:

Year

£m

1996

287,324

1997

209,294

1998

350,242

1999

358,085

2000

363,737

I am unclear as to the precise nature of the question about committing any further VAT reductions to local government as an optional local sales tax. Local authorities are adequately funded at present and have no plans to allocate any VAT revenues to them.
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