Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

It is important to outline the position of the sector because, to the best of my knowledge, there was no consultation between it and the Department. I am concerned about the impact on the tourism industry which has already seen an increase in the lower VAT rate. This change will mean a difference of €600 to €700 per vehicle, a cost that will be passed on to the person who is renting a car. The view in the sector is that this will impact on the supply of cars to the car rental fleet and car rental rates for tourists and may impact on the regional spread of tourism. The refund scheme never represented a cost to the Exchequer; rather, it was a VAT equalisation policy in the pre and post-VRT eras to maintain parity, with the full cost of the vehicle being VAT deductible, rather than being seen as a tax expenditure. It recognised the unique profile of short-term rental fleet movements and the industry's requirement to increase the size of the rental fleet rapidly for the peak tourism season and deplete it rapidly thereafter.

Is there an expected yield from this measure? It was not flagged on budget day or in any of the budget day documentation. Is it something the Minister is willing to re-examine? He views the relief as a temporary measure, just one that still happens to be in place 25 years on. I do not have an issue with the change, but it needs to be carefully thought through. Its implications, if any, need to be considered.