Dáil Éireann Debate, Tuesday - 23 March 2004
142 Mr. O’Connor asked the Minister for Finance if he has any plans to have schools exempted from VAT payments; if his attention has been drawn to the fact that this has become a serious issue as far as schools are concerned; his views on the matter; and if he will make a statement on the matter. [8292/04]
Amharc ar fhreagra151 Mr. O’Connor asked the Minister for Finance his plans to provide exemption from VAT payments to primary and second level schools; if his attention has been drawn to the interest in this issue; and if he will make a statement on the matter. [8299/04]
Amharc ar fhreagraI propose to take Questions Nos. 142 and 151 together.
In accordance with the EU sixth VAT directive and Irish VAT law, most education and training, including primary and secondary level schools, are exempt from VAT. This means they do not charge VAT on the services they supply but cannot recover VAT on the goods and services they purchase. Essentially, only VAT registered businesses which charge VAT are able to recover VAT.
I presume the Deputy is proposing that a provision should be introduced whereby primary and secondary schools are relieved of VAT. It is normal for most State funded services, such as schools or hospitals, to bear VAT on their purchases. However, Exchequer funding for such services, including primary and secondary schools, takes account of VAT when allocations are being made by the Government. Given this position, I would be concerned about the Exchequer cost of establishing a separate mechanism to relieve primary and secondary schools of VAT. There would be pressure to extend such a mechanism to all potentially affected sectors. I have, therefore, no plans to introduce a mechanism to relieve VAT incurred by primary and secondary schools.
