Tuesday, 3 December 2019

Ceisteanna (138, 139, 140, 141)

Pearse Doherty

Ceist:

138. Deputy Pearse Doherty asked the Minister for Finance the estimated cost of reducing the rate of VAT on electricity energy products and supplies from 13.5% to 9% and 0%, respectively, in each of the years 2020 to 2025. [50164/19]

Amharc ar fhreagra

Pearse Doherty

Ceist:

139. Deputy Pearse Doherty asked the Minister for Finance the estimated cost of reducing the rate of VAT on telephone bills and charges from 23% to 17.5%, 13.5%, 9% and 0%, respectively, in each of the years 2020 to 2025. [50165/19]

Amharc ar fhreagra

Pearse Doherty

Ceist:

140. Deputy Pearse Doherty asked the Minister for Finance the estimated cost of reducing the rate of VAT on Internet bills and charges from 23% to 17.5%, 13.5%, 9% and 0%, respectively, in each of the years 2020 to 2025. [50166/19]

Amharc ar fhreagra

Pearse Doherty

Ceist:

141. Deputy Pearse Doherty asked the Minister for Finance the estimated cost of reducing the rate of VAT on television bills and charges from 23% to 17.5%, 13.5%, 9% and 0%, respectively in each of the years 2020 to 2025. [50167/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 138 to 141, inclusive, together.

VAT on goods and services is subject to EU VAT law, with which Irish VAT law must comply. The VAT Directive provides that EU Member States may apply either one or two reduced rates of VAT to certain goods and services. As Ireland already has two reduced rates in place (9% and 13.5%), one would have to be removed before a new reduced rate of 17.5% could be introduced. Also, it is important to note, that under the VAT Directive, Member States may retain 0% VAT on goods and services where this has been in effect since 1 January 1991 but cannot extend a 0% rate to new goods or services. It is also not possible to apply a reduced rate of VAT to expenditure on telephone bills and internet charges under the Directive.

I am advised by Revenue that traders are not required to separately identify the VAT yield generated from the supply of specific services on their VAT Returns. However, using information from a combination of Personal Consumption Expenditure as compiled by the Central Statistics Office, Ireland’s VAT Own Resources and Electricity Tax Returns, an estimate of the cost to the Exchequer of the changes proposed by the Deputy is provided in the following table. For the reasons noted above, 0% and 17.5% rates are not included. Telephone bills and internet charges are also excluded as a reduced rate cannot be applied to these.

Estimated Annual Cost to the Exchequer

New VAT Rate

Electricity

TV

13.5%

-

€45m

9.0%

€105m

€67m