Seán Haughey
Question:257 Mr. Haughey asked the Minister for Finance the reason VAT is imposed on gas for domestic users; if he will reconsider this situation; and if he will make a statement on the matter. [16596/01]
Written Answers. - Value Added Tax.
EU VAT law, with which Irish VAT law must comply, requires that VAT applies to the supply of most goods or services where supplied for a charge. As the Deputy is aware VAT is a tax on the final consumption of a good or service and must therefore be imposed on the final users which in this case is the domestic consumer of gas.
As regards the rate which applies, VAT is chargeable on all home heating fuels at the reduced rate of 12.5% in Ireland. Under EU VAT law, with which Irish VAT law must comply, we cannot reduce the rate on a list of goods and services below 12%, where a reduced rate applied to such goods and services before 1 January 1991. This is commonly known as the parking rate facility and includes all fuel. Reducing the rate of VAT by 0.5% on the supply of all fuels, including gas, would be of little benefit to the consumer.