I move amendment No. 98:
In page 79, paragraph (a), line 17, to delete "subsection" and substitute "subparagraph".
This is essentially a drafting measure.
SECTION 84.
Amendment agreed to.
Section 84, as amended, agreed to.
SECTION 85.
Question proposed: "That section 85 stand part of the Bill."
What will come in under telecommunications services?
We currently receive about £110 million, I am told. We are not sure what the effect of the change will be, because of the rapidly changing practices and increased volumes.
Could the Minister explains how this operates? I am no expert in telecommunications but I understand the provision is as announced in the budget — where services are received one will pay VAT. For the unenlightened such as myself, can he give an example of how it operates at present and how it will work?
I will give the layperson's interpretation. If a person is making a call to Australia using Telecom Éireann, the company has a VAT liability.
Some companies were allowing one to ring Belfast to be put through to Australia.
That is correct. A call to Australia was being directed via the US where there is no VAT.
If I as an ordinary telephone user wanted to ring Australia I would have to call direct via Telecom.
The Deputy could dial a freephone number to get connected.
One would dial a freephone number in Belfast and one would be billed through a different number.
It was a well spotted opportunity to sell calls out of countries that did not have VAT, namely the US, back into Europe and charge it in the country where the call was being made.
Are many companies doing this?
A substantial number. It is not peculiar to Ireland. All European countries had to get a derogation because of the substantial increase in the volume of telecommunications calls and the use of on-line connections for computers and so forth.
Can the Minister explain it to a non-technological person such as me? If I ring a number which will put me through to another company——
That is a local call. The real call——
The local call is through Telecom Éireann and the real call goes via another company if I ring a country such as Australia.
Yes.
That sounds like a good idea.
It is, but there is a loss of VAT revenue on it across the European Union. An agreement to this change has been reached at ECOFIN level.
Were these services advertised widely?
Yes.
I do not read the right newspapers either.
Question put and agreed to.
NEW SECTION.
I move amendment No. 99:
In page 79, before section 86, to insert the following new section:
"86.—The Sixth Schedule (inserted by the Act of 1992) to the Principal Act is hereby amended by the addition of the following paragraph after paragraph (xi):
‘(xia) nursery or garden centre stock consisting of live plants, live trees, live shrubs, bulbs, roots and the like, not being of a type specified in paragraph (xv) of the Second Schedule, and cut flowers and ornamental foliage not being artificial or dried flowers or foliage;'.".
Amendment agreed to.
Section 86 to 88, inclusive, agreed to.