As I have informed the House on several occasions recently, 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.
The supply of electricity and gas are 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. Telecommunications services are standard rated at 21%. It is not open to me to zero rate the supply of such services as these VAT rates must apply regardless of the user of the service.
I should say that for those people in receipt of free telephone rental allowance that 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 free electricity allowance, this covers the normal standing charge and provides 1500 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 free fuel allowance which is payable from mid-October to mid-April to cover electricity charges and heating bills. For those in receipt of the free schemes, the VAT is borne by the Department of Social, Community and Family Affairs.