Seán Kyne (Galway West, Fine Gael) | Oireachtas source

Mountain rescue teams perform an essential job on a voluntary basis. I acknowledge and welcome the funding provided by the State to the 12 teams operating in Ireland. I also welcome the work of the Minister for Transport, Tourism and Sport, Deputy Leo Varadkar, in directing his officials to examine the introduction of a modest capital grant scheme to support the vital work of the teams.

Tourism and physical activity are two areas on which the Government is focusing generally. Both involve the development of outdoor sports and adventure activities which have a hugely positive impact on rural economies. The Department of Transport, Tourism and Sport, the Department of Jobs, Enterprise and Innovation and Fáilte Ireland are working together to encourage more people to visit Ireland by emphasising the adventure tourism activities on offer here, including hill walking, mountaineering, rock climbing, mountain biking and more. The Department of Health's Healthy Ireland strategy, a framework for promoting improved health and well-being, encourages citizens to take up exercise to realise the health benefits of outdoor pursuits. These policies increase the number of people on our hillsides and mountains, which is very welcome. At the same time, however, there is likely to be an increase in the numbers requiring the services of our voluntary mountain rescue teams.

To provide this often life-saving service, mountain rescue teams must be adequately equipped, which can be costly. While we rightly fund the rescue teams from State funds, it does not make sense for the State to charge taxes on the procurement of equipment. VAT has long been a cornerstone of the EU's method of funding its institutions and activities. This can be seen in the original EEC Directive No. 338 of 1977 and subsequent directives governing the administration of VAT in member states. These directives aimed to establish a common system of VAT and a uniform assessment process. The most recent update to VAT law at EU level was Council Directive No. 112, which was introduced in November 2006 and came into operation from January 2007. Under this provision, member states retain overall competency in taxation matters. However, EU rules pertaining to VAT have established a standard 15% rate, with member states permitted to apply one or two reduced rates not lower than 5% on certain products or services. Member states such as Ireland and the United Kingdom have also been permitted to retain reduced rates which were already in force prior to the introduction of various EU directives. Other exemptions from VAT are permitted for socioeconomic reasons and include activities such as hospital and medical care and goods and services linked to welfare, work, education and cultural activities. Significantly for this particular debate, a zero rate of VAT and a VAT refund order apply to vessels for rescue or assistance at sea and on inland waterways, respectively.

The European Commission has commenced a communication process involving the Parliament, Council of Ministers and the European Economic and Social Committee on the future of VAT. The overall aim is to create a simple, more robust and efficient VAT system for the Single Market. In its communication, the Commission calls on member states to make use of the existing options to alleviate the burden of VAT on non-profit organisations and offers to provide guidance on the VAT regime applicable. Mountain rescue teams are the very definition of non-profit organisations, as reflected in the relevant sections of the VAT directive. For example, Article 132, subsection 1(m), refers to "the supply of certain services closely linked to sport or physical education by non-profit-making organisations to persons taking part in sport". Article 131, subsection 1(p), talks about "the supply of transport services for sick or injured persons in vehicles specifically designed for the purpose, by duly authorised bodies". Article 133 further identifies the organisations that may be covered by various provisions of Article 132 and notes that the organisations "must not systematically aim to make a profit" and "must be managed and administered on an essentially voluntary basis".

I am calling on the Minister to extend the exemption from VAT to mountain rescue and lowlands teams in order that they can conduct their vital work in the most efficient and effective way.

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