Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

Since I last spoke, a number of Senators have spoken. One Senator asked me to look at the big picture when I pointed out, for the benefit of people watching in order that they would understand what the debate is about, the maximum amount of VAT a person could be in a position not to claim back as a result of the new threshold of €75. If somebody spends €75, the maximum VAT in that transaction would be €17 to €18. Of that, 50% goes to the company that processed the VAT, so the rebate to the person would be €8 or €9. That is what this debate is about. If somebody spends less than €75, they could lose up to €9 in VAT on that transaction.

I made the point before that I have confidence in the retailers around the country in the tourism sector who sell various craft products to the tourist industry. Everyone said it is not about the major retailers where people spend a lot of money as tourists, but about the ones where they spend a small amount. I have every confidence because many of these are family shops run by parents or children. It is a family business and a small undertaking. If a tourist comes in and spends €50 or €60, I would be shocked if they are not told they can get €18 back if they spend €75. I hope this measure will encourage people who might have been spending €50 to spend €75. It will cost them less and they will get more. I think that is a bonus. I accept it is clumsy, compared to having no threshold.

The other point I made was on promoting this scheme. This is the first time ever tourists from the UK coming into Ireland will be able to avail of VAT back. This brand new benefit for tourism in Ireland has never before applied to the over 3 million people who come in from the UK every year. They are the largest number of tourists coming into Ireland and, because they were in the EU up to now, they could not avail of this. I believe there is a great opportunity to promote this through Fáilte Ireland and everybody else by telling UK tourists they can get VAT back on purchases in Ireland which they could never get before. I do not know how it will work out. Next year will be difficult because of Covid and the number of travellers but, for those who travel, it could be a great incentive to spend money here that they would not otherwise have done because they will get VAT back.

I made the point that a lot of debate has been about why we are at €75. I said when the Oireachtas passed the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2019 and brought in the figure of €175, it was passed by both Houses. Now that the Minister, Deputy Donohoe, has considered the matter and the various views expressed, he has reduced it to €75 because the last legislation lapsed due to the Brexit situation. Even though it was passed and approved, it did not have to be implemented because Brexit did not happen last year but is scheduled to happen now. That is an issue that has to be put on the record. People will say "generous" is too generous a word but we are offering something to UK tourists who visit Ireland under a VAT-back scheme that is not reciprocated on the other side. That can be used to tell them they are welcome to come here and they will get their VAT back.

I was asked questions about looking at the big picture. I get the big picture and that is on one hand, but small businesses are on the other hand. I hope they will encourage people to spend €75. The contention was that this would ultimately be guillotined before the end of the year - not today, but on some other day. It has already gone through the Dáil.

I have to confirm something that Senator Casey raised and which we have discussed. I want to make it clear so the public knows and there are no illusions about this. The threshold is per transaction - it is not cumulative. One must have one's receipt for €75. One could spend €50 in one shop and the next day €50 in another shop and a further €50 in a third shop. However, if no single transaction goes over €75, one cannot claim the VAT back. In the marketing of this scheme, people should be made aware that if they spend over €75 in a single transaction, they can get their VAT back; but if they do not, they cannot get their VAT back. One cannot accumulate small receipts to get over the line. It is per transaction. That is what is in the legislation. There is no amendment down on that issue today so it is not up for discussion by way of amendment. I could understand if there had been such an amendment. As it has been raised in this discussion, I am clarifying it.

The impact will not be on the big tourist shops that we are all familiar with. The impact, whether it is large or small, will depend on where the tourists are coming form. If they are coming from the UK, the shops might get more sales. They might lose money on the other side with people who would only spend €30 or €40 and will not go to €75. I accept that and that is why we need a review. The Minister, Deputy Coveney, in his second speech was adamant there will be a full review. The Minister, Deputy Donohoe, is committed to that and will come back to the matter in 12 months. Those are the issues. People have asked me where the scientific evidence for the €75 is. That is like asking what will happen with Covid next year. Who can predict the future? Nobody can. We can set out the scenarios but, if we pause this, we cannot do a review if something does not come into effect.In order to have a review, something needs to have come into effect. There is nothing to review at the moment because there is no threshold.

Reference was made to the issue of the details of VAT fraud. I am not specifically aware of anything in that regard. I do not think I raised the issue of VAT fraud as such. It might have been mentioned in the course of discussion in the Chamber, but this is not about fraud. I have not raised an issue in that regard.

There was a question about a consultative forum. It seems a parliamentary question was tabled on this issue some time ago. I am not aware of any consultative forum but if there is one, we will notify Senators of it. I may be wrong, but I have no knowledge of such a forum.

A Senator asked when the Bill is due to commence and whether we can pause its commencement. We cannot pause Brexit. None of us voted for it, but we are here because of Brexit. It is not an issue of our making. I do not think the pausing of sections of the Bill even though Brexit is happening is a realistic suggestion or something I can offer to the Chamber. It would not be right to do so.

I have said what I have to say on a couple of occasions. There are positives and negatives to this. In fact, the only people who are not gaining from this are the people of Northern Ireland because they have the benefit of being part of the European Community under the Northern Ireland protocol, whereas the people in England, Scotland and Wales are not in that protocol, so they can actually benefit from this. It is the same arrangement as it always was in respect of Northern Ireland; it is deemed to be in the European Community for this purpose, so there is no change. It will only impact on people coming in from other areas.

As I stated, there is possibly only one other country in the EU that has a zero figure, namely, Spain. That is so because there are so many English people living in Spain. I may be wrong in that regard. If I am, I will stand corrected. I think it is only Spain or perhaps one other country that also has a zero figure. Ireland is unusual in the EU in that regard. The figure was from zero to €175. We had a figure of €175 last year and brought it back to €75, so we are now somewhere in the middle. We are not out of sync with our European counterparts on that. All one can hope is that the Bill will pass today. The Minister for Finance, Deputy Donohoe, and the Minister for Foreign Affairs, Deputy Coveney, have told me they need the Bill to be passed. The Minister, Deputy Coveney, gave an absolute commitment on Second Stage that there will be a review. I do not expect to get past the Finance Bill next year without this matter being up for detailed discussion. At this point, I am not in a position to accept the amendments.