Niall Collins (Limerick, Fianna Fail)
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Question 20: To ask the Minister for Finance his estimate of the impact on VAT receipts of the planned reduction in June in the lower rate of VAT from 13.5% to 12%. [5422/11]

Michael Noonan (Limerick City, Fine Gael)
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The Government has committed in the Programme for Government, to lower the 13.5% reduced rate of VAT to 12% up to the end of 2013. It is intended that this VAT reduction will be undertaken within the first 100 days of office as part of a series of measures to resource a Jobs Fund.

It is estimated that a reduction of 1.5% in the reduced VAT rate would cost €353 million in a full year. If the proposed VAT reduction is introduced on 1 June 2011 it is estimated that this would reduce VAT receipts by €147 million this year.