Jimmy Deenihan
Question:96 Mr. Deenihan asked the Minister for Finance the cost to the Exchequer of reducing the 13.5% VAT rate to 10%; and if he will make a statement on the matter. [32809/04]
View answerWednesday, 8 December 2004
Questions (96)
Written answers
I am informed by the Revenue Commissioners that the estimated cost to the Exchequer in 2005 of reducing the 13.5% VAT rate to 10% would be €1,100 million in a full year. However, this figure includes the cost of reducing the VAT on certain goods and services which were at a reduced rate of VAT on 1 January 1991 and which, under the provisions of the EU sixth VAT directive, cannot be reduced below 12%. If those goods and services which cannot be reduced are excluded, the cost of the rate reduction in question is estimated at €800 million. These figures show that a reduction in the 13.5% VAT rate along the lines proposed would have significant consequences for the Exchequer.