Richard Bruton (Dublin North Central, Fine Gael)
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Question 127: To ask the Tánaiste and Minister for Finance if his attention has been drawn to the anomaly whereby the high rate of VAT applies to photography on disc but the low rate applies to photography on slides, prints or negatives; if this disparity of treatment applies in all other EU countries; and his proposals to change this disparity of treatment. [28558/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The position is that the VAT ratings of all goods and services are subject to the requirements of EU VAT law with which Irish VAT law must comply. Under the VAT Directive Member States may apply a reduced VAT rate to those goods and services which are listed in Annex III of the Directive. In addition, Member States may retain a reduced VAT rate for goods and services to which a reduced VAT rate applied on 1 January 1991 (the so called "parked rates"). Under the Sixth Schedule to the Value-Added Tax Act 1972, the supply of photographic prints, slides or negatives is subject to the reduced rate of VAT of 13.5%. Since this measure was introduced in 1987 prior to 1 January 1991, Ireland is allowed to maintain its treatment of such products.

However, digitised photographs were not included as a category of good that could be subject to the reduced rate as applied on 1 January 1991, nor are they included in Annex III of the VAT Directive. It is therefore not possible for Ireland to extend the reduced rate to photography on disk. Thus, photographs, etc on disk are subject to the standard rate of VAT of 21 per cent.

Michael Ring (Mayo, Fine Gael)
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Question 128: To ask the Tánaiste and Minister for Finance if the excise duty rebate will be removed; if so, the help that will be made available to the people most effected by this; and if he will make a statement on the matter. [28586/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The 2003 EU Energy Tax Directive incorporated special derogations which allowed specific excise duty reliefs to be applied in a number of Member States. In the Irish context, these derogations allowed for reduced rates to apply to fuel used for public transport services which includes school transport services.

While these derogations expired on 31 December 2006, Ireland, along with other Member States, sought retention of its derogations beyond that date. However the European Commission, who are the deciding authority, have to date refused all such requests. The Commission maintain that, in keeping with the EU Energy Tax Directive, Member States must apply at least the EU minimum rates of excise on fuels in such circumstances and that any further favourable excise treatment is not allowable. At the Commission's behest my officials have indicated that Ireland will avail of the forthcoming Finance Bill to make the necessary legislative changes to conform with the Directive.

In the circumstances, the relevant line Departments are exploring, in conjunction with my Department, alternative non-tax support mechanisms that could be put in place where appropriate to maintain the assistance currently being provided subject of course to compatibility with EU State Aid requirements. In the interim the reduced rates applicable to fuel used will be maintained.