Leo Varadkar (Dublin West, Fine Gael)
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Question 180: To ask the Minister for Finance, further to Parliamentary Question No. 200 of 3 February 2009, the loss to the Exchequer arising from cross-Border shopping in 2008 and 2009; if he will publish said report; and if he will make a statement on the matter. [17722/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The report on the Implications of Cross Border Shopping for the Irish Exchequer, which was prepared by the Office of the Revenue Commissioners and the CSO was published on my Department's website on 20 March 2009. The report notes that the main causes of price differentials between goods in Northern Ireland and the Republic, are operating costs, profit margin (mark-up), taxes and the rapid depreciation of Sterling against the Euro (depreciation of around 30% between January and December 2008). While changes in the standard VAT rates have widened some price differentials, their impact remains small compared to the size of the change in the exchange rate.

The report estimates the value of cross-border shopping in 2008 in the range of €350m to €550m and the potential loss in Exchequer revenues due to cross-border shopping arising from reduced VAT and excise yields at between €58m and €90m (the higher estimate represents under 0.5% of the total VAT and excise revenue in 2008). In addition to the VAT and excise loss, there is a possible corporation tax revenue loss that is tentatively estimated to be in the range of €15m to €24m. However, it should be noted that all estimates for corporation tax revenue are provisional and should only be considered as indicative of the potential loss.

In regard to 2009, if the exchange rate remains at close to current levels, the estimated value of cross-border shopping is put in the range of €450m to €700m, and the estimated VAT and excise revenue loss is put at between €72m and €112m, and a possible corporation tax revenue loss in the range of €20m to €31m. With a view to improving the data available, Revenue and the CSO are working on questions to be included in the Quarterly National Household Survey that should facilitate a more detailed assessment of cross-border shopping in the future.