andMr. T.J. Fitzpatrick (Cavan-Monaghan) asked the Minister for Finance if he is aware that furniture manufacturers in County Monaghan find it very difficult to compete with imports of second-hand furniture and if he will reduce the rate of VAT from 20 per cent to 10 per cent; if the same favourable terms for payment of VAT might be applied here as in Northern Ireland; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Second-hand Furniture Imports.
19.
Furniture, in common with most other articles of household use, is rated at 20 per cent when new and at 10 per cent when second-hand. It is not proposed to alter these rates.
The terms for payment of VAT are of general application and a change in favour of furniture would involve the same change for all other goods and services. These terms were fixed after due consideration of all aspects. It is not proposed to make a change.
(Cavan-Monaghan): Does the Minister know that VAT on new furniture in Northern Ireland is only 8 per cent? They get six months interest free in which to pay it. Does he also know that at least a container load a day of second-hand furniture is brought across the Border into the Republic? Our 20 per cent rate of VAT makes it difficult for furniture manufacturers in Monaghan to compete with new and second-hand furniture being imported from the North. In the circumstances, will the Minister consider doing something to protect employment in the trade in County Monaghan?
The Deputy is misinformed about the period for payment of VAT in the North which, I understand, is three months as against two months here. Our two-month accounting period was agreed as a compromise between the one-month period which was for turnover and wholesale taxes and the three-month period which was requested by traders on the introduction of VAT. While it operates to the disadvantage of some traders, it operates to the advantage of others, depending on the period of credit which they give. As regards the difference in rates of VAT, this is true not only in relation to furniture but also in relation to a number of other items. Certain items are more expensive here and certain items are more expensive in the North. It is one of the unfortunate consequences of partition and one that we have to live with. As regards the situation of the furniture manufacturers, I appreciate the kinds of difficulties to which the Deputy has referred. As I have indicated, it would not be possible to deal with the situation without doing the same thing in respect of a large number of other items which would be at least equally entitled to consideration. The cost involved would be so substantial that I cannot contemplate it at the moment.
(Cavan-Monaghan): The Minister kindly agreed that the Monaghan furniture manufacturers are under heavy pressure from imports from Northern Ireland. Surely he is not serious in saying that it would not be possible to deal with furniture without dealing with other items in view of the fact that in his last budget he reduced the VAT on certain equipment from 40 per cent to 20 per cent, apparently without any difficulty. In view of the danger to employment in this Border county I urge on him strongly that he do the same for furniture as he did for hi-fi equipment in the budget.
The situation is not comparable. In that case we were talking about a combination of excise duty and VAT and a re-arrangement of them.
(Cavan-Monaghan): Is it not a fact that the Minister reduced the VAT——
That is argument.
(Cavan-Monaghan): Is it not a fact that he reduced VAT on that equipment from 40 per cent to 20 per cent? Why can he not reduce it on furniture from 20 per cent to 10 per cent?
I have indicated to the Deputy that the situation is not comparable.
(Cavan-Monaghan): The Minister has not told me how or why.
The remaining questions will appear on tomorrow's Order Paper.