Brian Cowen (Laois-Offaly, Fianna Fail)

The examination can consider all these issues. The law on VAT is a very technical area. EU VAT directives are the determining and over-arching legislative basis upon which these VAT issues are dealt with and we cannot take unilateral action to do what we wish regarding reductions in VAT, even though the public sometimes thinks we can. We must be in compliance with VAT law and that is often determined by the state of our VAT law in respect of goods and services at the time of the implementation of the directive. This explains the differing rates of VAT applying to various goods and services in different jurisdictions and which can often be a source of confusion to the public who question the reason we cannot move to those rates at this stage.

The examination will be comprehensive and will seek out the best way forward. As regards its timeliness, I will seek to have the examination completed as soon as is possible and practicable. In respect of any changes in our taxation arrangements, these are matters to be considered in a budgetary context, taking into account the overall state of the economy, and I will deal with them in the normal way.

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