Tuesday, 1 April 2014

Questions (176)

Michael Healy-Rae


176. Deputy Michael Healy-Rae asked the Minister for Finance in view of high Eircom phone charges and the fact that many persons are struggling to pay their bills, his proposals to reduce the VAT rate on these services; and if he will make a statement on the matter. [15078/14]

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Written answers (Question to Finance)

The VAT treatment of goods and services is governed by EU law with which Irish VAT law must comply. While the EU VAT Directive provides that a reduced VAT rate may be applied in certain circumstances and on certain goods and services, this does not apply in the case of telecommunication services.  The VAT Directive provides that the supply of telecom services must apply at the standard rate of VAT, which in Ireland is 23%. It would only be possible to reduce the VAT rate on telephone bills by reducing the standard VAT rate in general, which would be very costly to the Exchequer.