Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

What I am proposing in this particular section is as a result of a submission from the Revenue Commissioners that there were practices which, from the Revenue point of view, needed to be stopped because of an application of the flat-rate rebate of VAT, together with other practices in one sector that were no longer acceptable. There seems to be the suggestion also that not every business in the sector was involved in these operations. There would be a competitive issue in respect of those which were involved and those which were not. So far it is one agricultural sector that I have been advised about.

What I propose to do is to ask the Deputies to give me the enabling section. As I said, the process is that Revenue will not start conducting a review until the second quarter and then it will have to report to me. I do not have to act on its report within any particular timeline. I think it is fair to say that since there is no specific time in which the Minister for Finance must decide on restrictions to the flat-rate scheme, the Minister for Finance will have the ability to delay signing an order to restrict the flat-rate addition, if he or she believes that the affected agricultural sector is arranging its business structures, contractual arrangements or models to provide that no systemic excess of flat-rate additional payments over VAT on inputs will occur. To put that in simple English, I will give the time necessary for the sector to make the arrangements necessary to end the practice. We will take into account any evidence that is provided as to the effect of that on competitiveness. Since there are businesses, as I understand it, in the sector which are not involved in these practices, and if they are competitive, then it seems to me that the others can make themselves competitive.

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