Seamus Healy
Question:235 Mr. Healy asked the Minister for Finance if he will exclude all diesel vehicles up to two litres from the new VRT rate. [3541/03]
Written Answers. - Vehicle Registration Tax.
In my budget speech on 4 December 2002, I announced a change to VRT bands. Previous to this, a VRT rate of 25% applied to cars with engine sizes from 1,401 cc to 2,000cc and a rate of 30% applied for cars of 2,001cc and over. As of 1 January 2003 the 30% rate applies to all cars of 1,901cc and over.
The VRT change announced in the budget has now been enacted into law. It is not the practice to review such changes or alter their implementation other than in the context of the lead-up to the annual budget and I do not propose to depart from normal practice on this occasion.
Seamus Healy
Question:236 Mr. Healy asked the Minister for Finance if a fairer VAT system for charities will be introduced to allow charities to claim back VAT; and if he will make a statement on the matter. [3569/03]
The current VAT treatment of charitable organisations is based on EU VAT law, with which Irish VAT law must comply. Under the Sixth VAT Directive, a wide range of charitable and voluntary activities are deemed to be exempt for VAT purposes. This means that the organisations involved do not charge VAT on their services but, as a necessary corollary, they are unable to recover the VAT they bear on the goods and services that they purchase in the course of their activities. There are no provisions for refunds of VAT under the EU Sixth VAT Directive.
Charities already enjoy relief from most taxes. Furthermore, in the Finance Act 2001 I provided for a new scheme of tax relief for donations to charities. This is a generous scheme which has, I understand, already been of significant benefit to them. I would also say that even if VAT relief were possible, the cost to the Exchequer would be substantial, especially in the light of the existing valuable tax concessions to such charities.
Questions Nos. 237 and 238 answered with Question No. 224.