Written answers

Wednesday, 18 October 2006

Department of Finance

Budget Submissions

9:00 pm

Jerry Cowley (Mayo, Independent)
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Question 203: To ask the Minister for Finance if he will make a special provision such as tax concessions or through vat liability or other means at his disposal, for the west of Ireland's struggling business interests, particularly in the tourism sector, in areas such as Achill Island, where although subject to the same Government charges, levies, and expenses as the more populated areas, where their season amounts to possibly a maximum of only six weeks, and if he will be proactive by recommending budget changes which could help those struggling businesses to survive, particularly in view of the need to provide a basic tourism product service for visitors to such areas most of which small tourism undertakings are already struggling to survive; and if he will make a statement on the matter. [33563/06]

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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The Deputy will appreciate that in line with normal practice in the run up to the annual Budget and Finance Bill I do not wish to comment further on the intention or otherwise to make changes in taxation. In addition, as the Deputy is no doubt aware, matters relating to tourism policy are a matter in the first instance for the Minister for Arts, Sports and Tourism and individual actions and measures relating to tourism promotion or development at regional level are day-to-day functions of the relevant State tourism agencies.

However, I would like to point out that this Government provided an unprecedented level of Exchequer resources for tourism development in 2006 amounting to €140.4 million, which represented an increase of 13% on 2005. This allocation included the largest ever allocation of €40 million to the tourism marketing fund which supports the promotion of Ireland as a tourism destination abroad and provided Fáilte Ireland with more than €80 million to support regional tourism, from local festivals to building capability and strengthening the tourism product.

In relation to VAT, I would like to explain to the Deputy that the VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. Under the Sixth VAT Directive, Member States may retain the zero rates on goods and services which were in place on 1 January 1991, but cannot extend the zero rate to other goods and services. In addition, the VAT rate that applies to a particular good or service is determined by the nature of the good or service, and not by the location of the customer. There is no provision in EU VAT law that would allow for the abolition or reduction of VAT for people located in specific areas.

Finally, I should like to point out that several seaside resorts in the West of Ireland, including Achill Island, obtained tax designation from 1995 to 1999 under the seaside resorts scheme.

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