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Dáil Éireann díospóireacht -
Tuesday, 18 Apr 2000

Vol. 518 No. 3

Written Answers. - Value Added Tax.

Jackie Healy-Rae

Ceist:

143 Mr. Healy-Rae asked the Minister for Finance if he will consider removing VAT from electricity and telephone bills for old age pensioners. [11534/00]

The position is governed by EU VAT law with which Irish VAT law must comply. Under the EU sixth VAT directive, member states may retain the zero rates they had in place on 1 January 1991, but they are prohibited from introducing new zero rates.

Electricity is subject to VAT at the 12.5% rate and, in this regard, Ireland avails of certain options for reduced rating contained in EU VAT law. Telephone bills are standard rated at 21%. It is not open to me to zero rate the supply of such services and these rates must apply regardless of the user of the service.

I should say that for those people in receipt of the free telephone rental allowance, this covers the normal two-monthly telephone instrument and line rental charges for a standard telephone and also provides up to 20 free call units in each two-monthly billing period. For those in receipt of the free electricity allowance, this covers the normal standing charge and provides 1,500 free units, i.e. 200 units per two monthly billing period in the summer and 300 units per two monthly period in the winter. In addition, it is possible to use the £5 fuel allowance, which is payable from October to April, to cover electricity charges. For those in receipt of free telephone rental allowance and electricity, the VAT is borne by the Department of Social, Community and Family Affairs.

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