Tuesday, 28 June 2011
Department of Finance
Question 100: To ask the Minister for Finance in relation to recent changes in VAT, specifically, if retailers who do not pass on the recently announced decrease in VAT will be penalised; the way he will police the change in VAT and ensure that any change is passed onto the customer. [17193/11]
As provided for in the Finance (No. 2) Act 2011, a second reduced VAT rate of 9% is to be introduced on a temporary basis in respect of certain services and goods mainly related to tourism for the period 1 July 2011 to end 2013. Specifically the 9% rate will apply to restaurant and catering services; hotel and holiday accommodation; various entertainment services such as admissions to cinemas, theatres, certain musical performances, museums, art gallery exhibitions and fairgrounds/amusement parks, the use of sporting facilities; hairdressing services; and printed matter such as brochures, maps, programmes, leaflets, catalogues, newspapers and magazines. In reducing the VAT burden on activities related to the tourism industry, this measure is aimed at contributing towards boosting tourism and the creation of additional jobs in that sector.
In order for the measure to be successful it requires the reduction in VAT to be passed on to consumers through a reduction in prices in the tourism sector. With this in mind, the VAT change announced in the Jobs Initiative will be kept under review and evaluated before end 2012 in order to determine its effectiveness in aiding the industry. If it is shown that the VAT reduction has little or no effect in aiding the industry then the measure is open to being reformed or abolished.
I would point out that VAT is applied to particular goods and services and not in respect of individual retailers or firms. Consequently, allowing the VAT reduction to retailers who pass on the reduction but not allowing it to retailers that do not pass on the reduction is not possible under either EU or Irish VAT legislation. While it is expected that the reduction in VAT will be passed on to the customer, whether it is passed on is however a matter for individual retailers. The CSO published Consumer Price Index Detailed Sub-Indices will contain some information on price changes in various sectors e.g. the category headed "Restaurants and Hotels".
Question 101: To ask the Minister for Finance if there has been any response from fund managers to the suggestion that they might absorb some or all of the cost of the recently imposed pension levy; if there has been no positive response the further action he is contemplating; and if he will make a statement on the matter. [17201/11]
The Deputy will be aware that earlier this month I had written to representative bodies of the pensions industry with whom I had met on the pension fund levy issue, outlining my contention that the cost of the levy be absorbed by a reduction in the fees and charges made by their members. I have received a response from one of the representative bodies concerned. The response indicates that the question of the absorption of the cost of the levy into existing fees and charges is a matter for individual companies in respect of the pension schemes and personal pension plans to which they provide services. The letter went on to say, however, that the scope for those companies to absorb the levy is extremely limited.
I will await developments in the coming months to see if, in fact, the pension fund administrators and providers have absorbed any of the pension fund levy this year. In the light of those developments, I would intend to pursue the matter further with them in the Autumn.