Seymour Crawford (Cavan-Monaghan, Fine Gael)

I welcome the opportunity to speak on this Bill. This is one of only a few occasions when I have been in the House and there has been unanimity and good will towards a Bill. In that context, the Minister of State is one of the lucky ones. I do not intend to take away from that.

This is important legislation which seeks to clarify and ensure the structures in place are more easily understood. The Minister of State in his contribution stated:

The Bill before the House is the culmination of considerable work. The greatest benefit which will result from this consolidation will be the restructuring of the VAT code in a more clear, coherent and logical way.

This is important given the difficulties that can arise in regard to such matters. It is important this legislation is accessible and user-friendly, in particular by small businesses given the amount of red tape in that area.

I draw the attention of the Minister of State to the fact that a person in financial difficulty who sought to pay his taxes on a weekly basis was able to do so. Given current technology, it is hard to understand why a person wishing to pay employee taxes, such as PRSI and PAYE - I am not sure about VAT - on a weekly basis cannot be accommodated. As one who lives on the Border, I am aware that the VAT rates in the different areas of the country are extremely important and I want to highlight the grave difficulties we come across in the entire Border region. At the time the euro and sterling rates were very close. We increased our VAT rate by a small amount and, at the same time, the United Kingdom Government increased its rate by a significant amount. That increased the flow of VAT transactions and business in general across the Border and cost us jobs. It is difficult to put a figure on how much it cost us in unpaid VAT and other issues because much of the material came across the Border without any issues attaching. It is important that we try to ensure, even in a very difficult budgetary position, that we do not raise VAT to a level that will force people to go out of the country to shop.

The Minister likes to reflect on history and in his contribution he highlighted Mr. John Bruton's VAT on children's shoes and so on. That may be interesting but it is very light reading in light of the current economic position in which we find ourselves. As we come nearer to the time of the budget the Minister of State should be cognisant of the serious implications of VAT in the Border region and I ask him to try to keep it in line.

The second issue may not be directly to do with this Bill but we have a major opportunity to increase the income from tourism and in that regard the levels of VAT being charged in that sector should be examined.

We are trying to encourage alternative energy production yet if I, as a farmer, put up a solid building on my farm I am entitled to reclaim the VAT as a non-registered farmer. That is the way the system works. However, if I put up a windmill to provide power for that farm and green energy to go into the grid, I cannot reclaim the VAT in the same way. That is a major anomaly in the system and if we were serious about alternative energy and maximising our green energy, we must look at those areas.

I was talking to a pig farmer who has a pig unit in County Monaghan and one in Northern Ireland and the differences between the allowances they get North of the Border for producing electricity and the ones we get here are unreal. If we are serious about alternative energy and maximising green energy we must rectify that situation.

In general I have no problem with the Bill. It is the job of my party spokesman on finance to go through the issues with the Minister, and I know he will do that very carefully. I wish the Minister well with it and I thank the Acting Chairman for the opportunity to say a few words on it.

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