Seán Power (Kildare South, Fianna Fail)
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Question 206: To ask the Minister for Finance his views on a VAT free weekend for the retail sector in view of the negative impact that the recent spell of bad weather has had on retail sales. [7868/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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In matters relating to the application of VAT, I am constrained by the requirements of EU VAT law with which Irish VAT law must comply. The EU VAT Directive provides that Member States must apply VAT to goods and services at specified rates, and does not provide for temporary VAT-free arrangements for particular economic sectors such as the retail sector. In this respect, it is not possible to introduce a VAT-free week-end in respect of the retail sector due to bad weather. I would point out, however, that Budget 2010 reduced the standard rate of VAT from 21.5% to 21% with effect from 1 January 2010.