I think the Deputy is rushing in and not thinking about this. If he would think about it he would realise that, because it is so much further removed, the British have considerably greater difficulties to face and, therefore, they must introduce the system in as painless a way as possible. It should be obvious that when they have the system in operation that will not be the end of the story so far as they are concerned. They will have to move further at a later stage.
It is my view that since we are so near to the VAT system already we should aim at trying to get our system operating so that there will be the least possible number of changes afterwards. In my view the fewer changes and the less disruption caused the better. Therefore, I do not think we should have regard to what they are doing in Britain.
To suggest that this will make our industries uncompetitive is a fallacy. First, what we are proposing to do regarding the two-month period goes a long way in meeting most of the difficulties of Irish industry. Secondly, we have been operating a different system from Britain up to now and it has not made Irish industry uncompetitive. It is of some significance that while there is talk of making Irish industry uncompetitive vis-à-vis Britain and the North, if this is so there was not any comment on the fact that what we appear to be doing is making Irish manufacturers more competitive as compared with France, Germany and the Netherlands. There is some significance in the fact that they do not operate anything like a three-monthly period in these countries, countries which have been operating VAT for a considerable period.
I should like to comment on some statements made by Deputy Belton because I think he is under a misapprehension. I do not wish to go back on the ground covered last night but I should like to tell him that what we are doing will have the effect of conferring a considerable bonus in the way of liquidity on wholesalers and retailers because of the two-monthly period and the fact that retailers will get credit for the tax they have paid when they receive the invoice for the goods. This is quite independent of the time they sell the goods.
Under VAT they will get credit for tax on their purchases, unlike the situation with wholesale tax. Further, they will be entitled under VAT to claim as a credit against the tax they owe the tax they have paid on fixed items such as renovation to premises, weighing scales and so on, and on the tax element in their supplies. For instance, in Deputy Belton's business he will be able to claim credit on the tax element on bottles, corks and so on. This is an element they were not able to claim before but under VAT they will be able to set it off against their tax liability. The position of the retailers and wholesalers, particularly with a two-monthly accounting period, will be considerably better than under the present system. I think the argument made by Deputy FitzGerald relates not so much to that aspect about which he has slight doubts but rather to the difficulties for manufacturers. I tried to deal with that matter in what I have said previously.