I move Financial Resolution No. 9:
(1) THAT in this Resolution—
"the principal Act" means the Value-Added Tax Act, 1972 (No. 22 of 1972);
"the Act of 1991" means the Finance Act, 1991 (No. 13 of 1991);
"the Act of 1992" means the Finance Act, 1992 (No. 9 of 1992).
(2) THAT—
(a) the rate of value-added tax on certain goods and services at present chargeable at the rate of 10 per cent. be increased to 12.5 per cent. of the taxable amount or value, as the case may be, in respect of which tax is chargeable in relation to those goods and services, and
(b) the rate of value-added tax on certain goods at present chargeable at the rate of 10 per cent. be increased to 21 per cent. of the taxable amount or value, as the case may be, in respect of which tax is chargeable in relation to those goods, and
(c) the rate of value-added tax on certain goods and services at present chargeable at the rate of 16 per cent. be increased to 21 per cent. of the taxable amount or value, as the case may be, in respect of which tax is chargeable in relation to those goods and services, and
(d) the rate of value-added tax on certain goods and services at present chargeable at the rate of 16 per cent. be decreased to 12.5 per cent. of the taxable amount or value, as the case may be, in respect of which tax is chargeable in relation to those goods and services, and
(e) the rate of value-added tax on certain goods at present chargeable at the rate of 21 per cent. be decreased to 12.5 per cent. of the taxable amount or value, as the case may be, in respect of which tax is chargeable in relation to those goods, and
(f) the rate of value-added tax on livestock, live greyhounds and the hire of horses be decreased from 2.7 per cent. to 2.5 per cent. of the taxable amount or value of such goods and services, and
that, accordingly, the principal Act be amended—
(i) in subsection (1) of section 11 (inserted by the Act of 1992)—
(I) by the deletion in paragraph (a) of "(e)",
(II) by the deletion of paragraph (e), and
(III) by the substitution, in paragraph (f), of "2.5 per cent." for "2.7 per cent.",
(ii) by the substitution in sub-paragraph (b) of paragraph (iv) of the First Schedule (inserted by the Act of 1991) of "paragraph (ii) of the Third Schedule or paragraph (xiii) of the Sixth Schedule" for "paragraph (vi) of the Third Schedule",
(iii) by the substitution of the following Schedule for the Third Schedule (inserted by the Act of 1991):
"THIRD SCHEDULE
GOODS AND SERVICES CHARGEABLE AT THE RATE SPECIFIED IN SECTION 11 (1) (C).
(i) Immovable goods being a domestic dwelling for which a contract with a private individual has been entered into before the 25th day of February, 1993, for such supply;
(ii) services specified in paragraph (xiii) of the Sixth Schedule, under an agreement made before the 25th day of February, 1993, and at charges fixed at the time of the agreement for such supply;
(iii) services specified in sub-paragraph (a) of paragraph (xv) of the Sixth Schedule, under an agreement made before the 25th day of February, 1993, and at charges fixed at the time of the agreement for such supply.",
(iv) in the Sixth Schedule (inserted by the Act of 1992)—
(I) by the substitution in sub-paragraph (c) of paragraph (i) of "motor vehicle gas within the meaning of section 42 (1) of the Finance Act, 1976" for "gas of a kind specified in paragraph (i) of the Seventh Schedule",
(II) by the substitution in paragraph (xi) of a semi-colon for a full stop, and
(III) by the insertion of the following paragraphs after paragraph (xi):
"(xii) newspapers and periodicals, normally published at least fortnightly, the contents of each issue of which consist, wholly or mainly, as regards the quantity of printed matter contained in them, of information on the principal current events and topics of general public interest;
(xiii) (a) letting of immovable goods (other than in the course of the provision of facilities of the kind specified in paragraph (viia)—
(I) by a hotel or guesthouse, or by a similar establishment which provides accommodation for visitors or travellers,
(II) in a house, apartment or other similar establishment which is advertised or held out as being holiday accommodation or accommodation for visitors or travellers, or
(III) in a caravan park, camping site or other similar establishment, or
(b) the provision of accommodation which is advertised or held out as holiday accommodation;
(xiv) tour guide services;
(xv) the hiring (in this paragraph referred to as "the current hiring") to a person of—
(a) a vehicle designed and constructed, or adapted, for the conveyance of persons by road,
(b) a ship, boat or other vessel designed and constructed for the conveyance of passengers and not exceeding 15 tonnes gross,
(c) a sports or pleasure boat of any description, or
(d) a caravan, mobile home, tent or trailer tent,
under an agreement, other than an agreement of the kind referred to in section 3 (1) (b), for any term or part of a term which, when added to the term of any such hiring (whether of the same goods or of other goods of the same kind) to the same person during the period of 12 months ending on the date of the commencement of the current hiring, does not exceed 5 weeks;
(xvi) every work of art being—
(a) a painting, drawing or pastel, or any combination thereof, executed entirely by hand, excluding hand-decorated manufactured articles and plans and drawings for architectural, engineering, industrial, commercial, topographical or similar purposes,
(b) an original lithograph, engraving, or print, or any combination thereof, produced directly from lithographic stones, plates or other engraved surfaces, which are executed entirely by hand,
(c) an original sculpture or statuary, excluding mass-produced reproductions and works or craftsmanship of a commercial character, or
(d) subject to and in accordance with regulations, an article of furniture, silver, glass or porcelain, whether hand-decorated or not, specified in the said regulations, where it is shown to the satisfaction of the Revenue Commissioners to be more than 100 years old, other than goods specified in sub-paragraph (a), (b) or (c);
(xvii) literary manuscripts certified by the Director of the National Library as being of major national importance and of either cultural or artistic importance;
(xviii) services consisting of—
(a) the repair or maintenance of movable goods, or
(b) the alteration of second-hand movable goods, other than such services specified in paragraph (v), (va) or (xvi) of the Second Schedule, but excluding the provision in the course of any such repair, maintenance or alteration service of—
(I) accessories, attachments or batteries, or
(II) tyres, tyre cases, interchangeable tyre treads, inner tubes and tyre flaps, for wheels of all kinds;
(xix) services consisting of the care of the human body, excluding such services specified in the First Schedule, but including services supplied in the course of a health studio business or similar business;
(xx) services supplied in the course of their profession by jockeys;
(xxi) the supply to a person of photographic prints (other than goods produced by means of a photocopying process), slides or negatives, which have been produced from goods provided by that person;
(xxii) goods being—
(a) photographic prints (other than goods produced by means of a photocopying process), mounted or unmounted, but unframed,
(b) slides and negatives, and
(c) cinematographic and video film,
which record particular persons, objects or events, supplied under an agreement to photograph those persons, objects or events;
(xxiii) the supply by a photographer of—
(a) negatives which have been produced from film exposed for the purpose of his business, and
(b) film which has been exposed for the purposes of his business;
(xxiv) photographic prints produced by means of a vending machine which incorporates a camera and developing and printing equipment;
(xxv) services consisting of—
(a) the editing of photographic, cinematographic and video film, and
(b) microfilming;
(xxvi) agency services in regard to a supply specified in paragraph (xxi);
(xxvii) instruction in the driving of mechanically propelled road vehicles, not being education, training or retraining of the kinds specified in paragraph (ii) of the First Schedule;
(xxviii) immovable goods;
(xxix) services consisting of the development of immovable goods and work on immovable goods including the installation of fixtures, where the value of movable goods (if any) provided in pursuance of an agreement in relation to such services does not exceed two-thirds of the total amount on which tax is chargeable in respect of the agreement;
(xxx) services consisting of the routine cleaning of immovable goods;
(xxxi) cakes, crackers and wafers and other flour-based bakery products other than those included in paragraph (xii) of the Second Schedule;
(xxxii) biscuits, other than biscuits wholly or partly covered or decorated with chocolate or some other similar product similar in taste and appearance.",
and
(v) by the deletion of the Seventh Schedule (inserted by the Act of 1992).
(3) THAT the rate of flat-rate addition to prices of agricultural produce or agricultural services supplied by unregistered farmers be decreased from 2.7 per cent. to 2.5 per cent., and that, accordingly, section 12A (inserted by the Value-Added Tax (Amendment) Act, 1978 (No. 34 of 1978) of the Principal Act be amended by the substitution in subsection (1) of "2.5 per cent." for "2.7 per cent." (inserted by the Act of 1992).
(4) THAT this Resolution shall have effect as on and from the 1st day of March, 1993.
(5) IT is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).
This Resolution provides for an increase to 12.5 per cent in the rate on 10 per cent rated categories such as building, newspapers and holiday accommodation, an increase in the rate on the supply of poured concrete and concrete blocks from 10 per cent to 21 per cent; an increase to 21 per cent in the rate on 16 per cent rated categories such as telecommunications and adult clothing; a decrease to 12.5 per cent on certain 16 per cent rated activities such as garage repairs, hairdressing and dry cleaning; a decrease in the rate of flour, confectionery and bakery products, as well as non-chocolate biscuits, from 21 per cent to 12.5 per cent and an adjustment from 2.7 to 2.5 per cent in the level of flat-rate farmers' refund, together with a similar change in the VAT rate on livestock. These changes will have effect on and from 1 March 1983.
The Resolution provides for an increase from 10 per cent to 12.5 per cent, with effect from 1 March 1993 on building and building services, newspapers, hotel and holiday accommodation, tour guide services, short term hire of cars, boats, caravans, mobile homes and tents and trailer tents. This increase, while consistent with and partially dictated by the Single Market agreements on VAT rates and structures, will make a positive and necessary contribution to the overall budgetary arithmetic.
The Resolution provides for an increase from 10 per cent to 21 per cent, with effect from 1 March 1993, on poured concrete and concrete blocks. This measure will be of assistance to building enterprises who meet their tax obligations and who face unfair competition from black economy activity within the building sector. The projected yield is £0.4 million in 1993 and £0.7 million in a full year.
The Resolution provides for an increase from 16 per cent to 21 per cent with effect from 1 March 1993 on telecommunications, adult clothing and footwear, including materials for their manufacture, auto LPG, spectacles and contact lenses, farm accountancy and farm management services, services of auctioneers, solicitors, estate agents and other agents directly related to the sale of agricultural land.
This measure is necessary to comply with EC Single Market requirements. Under the terms of the EC VAT agreements, member states can have only one rate at a level equal to or higher than 15 per cent. As our standard rate is being maintained at 21 per cent on this occasion, it is necessary to abolish the transitional 16 per cent rate.
The proposed increase applies to about 8 per cent of all VAT-able goods and services. The projected yield from this increase is £40 million in 1993 and £65 million in a full year. This increase will result in an estimated rise of 0.29 percentage points in the CPI.
The Resolution provides for a decrease from 16 per cent to 12.5 per cent, with effect from 1 March, 1993, on general repair and maintenance services, e.g. car repairs etc., personal services such as hairdressing, dry cleaning, driving lessons etc., jockeys' services, photographic services, works of art, literary manuscripts and most antiques.
This reduction is being made for most of the categories outlined, which are highly labour-intensive, with the aim of helping to consolidate and promote employment. It is fully consistent with the provisions of the EC VAT arrangements for the Single Market, which allow us retain reduced rating for a transitional period, prior to eventual standard rating, on activities which had been subject to a low rate on 1 January 1991.
The projected cost to the Exchequer is £6.5 million in 1993 and £11 million in a full year. This decrease will result in an estimated fall of 0.088 percentage points in the CPI.
The Resolution provides for a decrease from 21 per cent to 12.5 per cent, with effect from 1 March, 1993, on flour confectionery and bakery products, as well as non-chocolate biscuits. This initiative is aimed at safeguarding employment within the domestic biscuit-making and flour confectionery industries. It is also compatible with EC agreements which permit the option of reduced rating for food. It is also aimed at preserving jobs and ensuring less cross-Border trading.
The projected cost to the Exchequer is £7 million in 1993 and £11.5 million in a full year. This decrease will result in an estimated fall of 0.06 percentage points in the CPI.
The Resolution provides that, on and from 1 March, 1993, the flat-rate compensation to unregistered farmers, which operates as an addition to the selling price of their agricultural produce and agricultural services, will be adjusted from 2.7 per cent to 2.5 per cent. A similar change will apply in the case of the VAT rate on livestock.
The adjustment in the flat-rate will result in a reduced cost to the Exchequer which is estimated at £4 million in 1993 and £6 million in a full year. The flat-rate addition compensated farmers for the VAT incurred by them on their farm inputs.
Farmers will receive in 1993 an estimtated £72 million in compensation for VAT incurred on farm inputs. In addition, about £16 million will be paid to farmers through direct refunds of VAT incurred on the construction of farm buildings and on land drainage and reclamation.
Farmers sell most of their produce to VAT-registered traders, such as creameries and livestock marts, who can reclaim in their VAT returns the flat-rate compensation which they pay to unregistered farmers — there is no pass through to the final consumer.
Farmers are not obliged to use the flat-rate scheme. A farmer can register for VAT, and can then reclaim VAT paid on all taxable inputs. Approximately 2,200 farmers were registered for VAT at the end of 1992 compared with 2,100 at the end of 1991.
The resolution provides for a change from 2.7 per cent to 2.5 per cent in the rate on livestock, including horses, sold by VAT-registered farmers or cattle dealers. This adjustment is linked to the equivalent change in the flat-rate refund paid to unregistered farmers. The rate is traditionally maintained at the same level as the flat-rate refund for ease of buying and selling operations within marts. For instance, cattle dealing would be unnecessarily complicated if one VAT rate applied in the case of sales by registered farmers, while a different level of flat-rate refund applied when sales are made by unregistered farmers. The new rate will apply to all supplies, intra-Community acquisitions and importations of livestock on and from 1 March, 1993. The new rate on livestock will have a negligible effect on revenue yield.