Pearse Doherty (Donegal, Sinn Fein)
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98. To ask the Minister for Finance to outline the reason the VAT receipts to September 2016 are 2.7% or €278 million behind profile; his views on the matter; and if he will make a statement on the matter. [29858/16]

Pearse Doherty (Donegal, Sinn Fein)
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100. To ask the Minister for Finance the reason customs receipts to September are 18.9%, €54 million, behind profile; his views on this; and if he will make a statement on the matter. [29860/16]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 98 and 100 together.

VAT receipts at end-September 2016, were down €278 million (2.7%) against an ambitious target.  While retail sales have been strong in the year, with the volume of retail sales up 5.2% year-on-year, the increase in the value of retail sales is much more modest at 2.9% reflecting the fact that there is very little inflation in the economy.

I am advised by Revenue that most the shortfall against forecast is accounted for by VAT internal, while VAT ex-warehouse is on profile and VAT at point of entry is currently behind forecast. VAT receipts collected under the Mini-One-Stop Shop (VAT MOSS) scheme are ahead of target. However, compared to the same period the previous year, VAT internal is up strongly year-on-year to end-September, as is VAT ex-warehouse and VAT MOSS, but VAT at point of entry is down on the same period last year. I am further advised that VAT internal net receipts would be higher were it not for increased levels of repayments in 2016.

In relation to Customs, the position is that Customs duties and VAT are payable at point of entry on the importation of goods and services from outside the EU.  Customs receipts experienced a number of recent year-on-year increases, with 2015 experiencing a 20% increase relative to 2014. While duties collected to end-September are €54 million (19%) behind target, they are only €8 million (3.5%) below collection for the same period in 2015. There is therefore a consistency between Customs duties and VAT at point of entry performance this year compared to 2015. Customs receipts increased significantly in 2015, this had been expected to continue in 2016 when forecasts were developed (at the time of Budget 2016); however the strong growth in 2015 has not been repeated this year.