Liam Twomey (Wexford, Fine Gael)
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Question 113: To ask the Minister for Finance the situation regarding home care provisions; if persons who use their home care funding to buy services from private contractors can expect to pay 21% VAT; if same has been addressed in Budget 2007; if so, the way it has been done; and if he will make a statement on the matter. [8135/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Currently where homecare services are provided for by private contractors for a consideration in the course or furtherance of business, the provider may be obliged to register and account for VAT at the appropriate rate depending on the type of service being provided. Homecare provided to individuals typically consists of a variety of services which may be liable to VAT at different rates.

However, as I indicated at the Committee Stage of the Finance Bill, I will be bringing forward an amendment at Report Stage which will provide an exemption from VAT for homecare services provided by private operators. This is an important measure designed to support the Government's initiative aimed at supporting the elderly and others who wish to continue living at home. The VAT exemption for homecare services will come into effect on the passing of the Finance Bill.

Ruairi Quinn (Dublin South East, Labour)
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Question 114: To ask the Minister for Finance the cost to the Exchequer of reducing the upper rate of tax from 41% to 38%. [8163/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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By reference to the 2007 post-Budget ready reckoner prepared by the Revenue Commissioners, the cost to the Exchequer of reducing the higher rate of income tax from 41% to 38% is estimated at €635 million in a full year.

These figures are provisional, subject to revision and estimated to the nearest €5 million. The ready reckoner is available from today on my Department's website, at www.finance.gov.ie