Michael D'Arcy (Wexford, Fine Gael) | Oireachtas source

The VAT rating of goods and services is subject to the requirements of EU VAT law, with which Irish VAT law must comply. Under Article 110 of the VAT directive, member states may retain the zero rates on goods and services that were in place on and from 1 January 1991 but cannot extend the zero rate to new goods and services after that date.

Since the mid-1980s, Irish VAT law has defined children's clothing and footwear as that not exceeding the size appropriate to children of average build and foot size of ten years of age. This includes clothing described, labelled, marked or marketed as being for children under 11 years of age. As the legislation in 1991 provided that only clothing and footwear appropriate to children up to ten years of age could avail of the zero rate of VAT, extending the provision to children older than that would be counter to Article 110. In order to remain compliant with the EU VAT directive, the age limit to which the zero rate applies in this case cannot be raised.

The practical application of the measure is that zero rating applies to children's clothing of sizes up to and including 32 in. chest, 26 in. waist or 152 cm height, and children's footwear up to and including size 5.5, or 38. These sizes were determined in 1984 after consultation with clothing and footwear trade interests at manufacturing and distribution levels.

While EU VAT law prohibits any increase in the age of children's clothing to which the zero rate applies, the practical application of the current zero rate to children aged up to ten years can be redefined where there is evidence that the size limitations have changed since the current criteria were agreed in the 1980s. A further detailed review of the average size of footwear for children was carried out in 1997, but there was insufficient evidence to warrant a change in the 5.5 limit. If sufficient evidence is supplied to the effect that average shoe and clothing sizes for ten year olds have changed since 1984, the Revenue Commissioners could review the matter. Where the industry representing children's footwear and clothing has reason to believe the current practical size measurements no longer reflect the average child aged ten, it should contact the Revenue Commissioners, who will review the matter.

Accordingly, I cannot accept the amendment.

Legislation currently deals with VAT on the average shoe size of 5.5. A second part of this conversation is why a shoe size of 6 can be nearly double the price of a pair which are 5.5. The VAT rate does not explain that. Perhaps we need to seek an explanation from the clothing and footwear industries. Perhaps the Chairman of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach could invite them into explain the significant anomalies. I know from my children that the price of shoes increased from €30 or €35 to €70 when going from 5.5 to 6.

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