Richard Bruton (Dublin North Central, Fine Gael)

I must first thank the Deputy for his good wishes which are very much appreciated. I recognise the problem described by Deputy Tóibín that people living in the Border region have to deal with currency movements, differences in tax regimes and in inflation rates and these are serious problems for them. A Government which is committed to finding an extra €9 billion through either tax increases or savings, will have to look at unpalatable options. That commitment has to try to balance different needs. In envisaging a cap on the VAT rate, we are also envisaging immediate changes in the tax mix in order to help competitiveness. I refer to the cutting of employers' PRSI contributions which will improve another dimension of the tax mix for those competing across the Border. The reason a cap exists in this regard is because we recognise there is a constraint. Serious problems arose when the gap was very wide.

On the question of estimating the impact, such estimates are not available to my Department. In February 2009 the Revenue Commissioners and the CSO prepared a report attempting to calculate the value of cross-Border trade at that stage. They had an estimate of, I believe, €350 million to €500 million going across the Border. Obviously that waxes and wanes with currency and tax issues. Clearly there are swings and roundabouts. For example, while the excise duty on whiskey is higher in the South, it is lower on beer, petrol and diesel. The Minister for Finance is always conscious of the impact on cross-Border trade when trying to make those difficult balancing calls.

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