Kieran O'Donnell (Limerick East, Fine Gael)
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Question 3: To ask the Minister for Finance the price difference in euros between Northern Ireland and the Republic of Ireland in respect of a standard bottle of wine, a half litre can of beer and a standard bottle of spirits; the percentage of the difference in each case made up by a differential in tax; the latest estimate of the loss of revenue in excise and VAT as a result of North- South shopping; and if he will make a statement on the matter. [45165/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am informed by the Revenue Commissioners that a periodic informal survey, which provides a snapshot of retail prices for the main excisable commodities observed in market outlets in Dublin and Newry, was most recently carried out on 14 October 2009. A summary of the results of that survey and a number of other surveys since February 2007 are published on the Revenue's website:www.revenue.ie/en/about/publications/index-cross-border-price-comparisons.html.

For good health reasons, Ireland and the United Kingdom have applied high rates of excise to alcohol products over the years compared to many other EU member states. The detailed information requested is outlined in the table set out in the Official Report.

In summary, on 14 October, using an exchange rate of €1 being equal to 0.9302 sterling, a bottle of wine cost €9.24 here and €6.74 in Northern Ireland, with tax being €1.49 higher here and representing some 60% of the overall cost differential. A 500 ml can of beer cost €2.04 here and €1.52 in Northern Ireland, with tax being 21% higher here and representing some 40% of the overall cost differential. A bottle of whiskey cost €25.99 here and €17.17 in Northern Ireland, with tax being €6.53 higher here and representing some 74% of the overall cost differential.

As the Deputy may be aware, the Revenue Commissioners and the Central Statistics Office, CSO, prepared a report, at my request, on the implications of cross-Border shopping for the Irish Exchequer. The report was published on my Department's website on 20 March 2009. The report estimated the likely value of cross-Border shopping in 2009 to be in the range of €450 million to €700 million, with a potential loss in Exchequer revenues arising from reduced VAT and excise yields of between €72 million and €112 million. In addition, a possible corporation tax loss in the range of €20 million to €31 million is tentatively estimated. It should, however, be noted that any estimate for corporation tax is provisional and should only be considered as indicative of the potential loss.

The report noted that the main causes of price differentials between goods in Northern Ireland and the Republic are operating costs, profit margin or mark-up, taxes, and the rapid depreciation of sterling against the euro. While changes in the standard VAT rates widened some price differentials, their impact remains small compared to the size of the change in the exchange rate. For example, sterling has fallen in value relative to the euro by around a third since mid-2007.

The report also noted that there is rather limited availability of quantifiable data on cross-Border shopping. With a view to improving the data available, Revenue and the CSO have worked on questions for inclusion in the quarterly national household survey, QNHS, that should facilitate a more detailed assessment of cross-Border shopping in future. I understand that the results of the CSO's QNHS cross-Border shopping module are due to be published tomorrow.

It is a long-standing practice for the Minister for Finance not to comment in advance of the budget on any tax or expenditure matters that might be the subject of budget decisions and I do not propose to deviate from that practice.