Michael Creed (Cork North West, Fine Gael)
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Question 178: To ask the Tánaiste and Minister for Finance if his attention has been drawn to the fact that live poultry attract a VAT rate of 13.5% in the Republic of Ireland whereas in Northern Ireland live poultry are zero rated for VAT; his views on the competitive disadvantage this places the industry in the Republic of Ireland at; and the steps he proposes to take to address the matter. [21539/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The position is that the VAT regime and indeed the rating of all goods and services are subject to the requirements of EU VAT law with which Irish VAT law must comply. While we can retain the zero and livestock rating provisions which were in existence on 1 January 1991, we cannot introduce any new ones. Therefore, it is not possible to apply either a zero or livestock rate to the supply of live poultry.

Under Annex III of the VAT Directive, VAT registered hatcheries are liable to VAT at the 13.5 per cent rate on their supplies of live poultry. VAT registered farmers are entitled to claim VAT on their input costs which would include VAT paid on live poultry.

In relation to unregistered farmers, the Deputy will be aware that such farmers receive compensation for VAT paid on their inputs through the farmers flat rate addition. The flat-rate scheme is a simplified and practical method of applying value-added tax to farming. It compensates unregistered farmers on an overall basis for the VAT charged to them on their purchases of goods and services. This is achieved without applying the normal VAT rules on registration and returns. The farmers VAT flat-rate addition for unregistered farmers was increased in my last Budget from 4.8 per cent to 5.2 per cent. In this regard, the Government's position of maintaining the farmers flat rate addition at the appropriate rate has not changed.

David Stanton (Cork East, Fine Gael)
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Question 179: To ask the Tánaiste and Minister for Finance his views on introducing a form of tax relief or incentive scheme to enable towns such as Youghal and Cobh in County Cork to rejuvenate; and if he will make a statement on the matter. [21569/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Both of the towns mentioned by the Deputy have benefited from designation for tax incentives in the recent past. Youghal was designated for tax incentives under the Seaside Resort Scheme which ran from 1995 to 1999, while Cobh was among the 42 towns and cities that had integrated areas designated for tax relief under the 1999 Urban Renewal Scheme. Cobh still benefits from this designation.

Following a major review of various property and area based tax incentive schemes I announced in Budget 2006 that most of the existing reliefs were being terminated subject to certain transitional provisions. These included the Urban Renewal and Town Renewal Schemes. There are no plans to re-introduce schemes along the lines of those terminated in Budget 2006.