747. Deputy Martin Kenny asked the Tánaiste and Minister for Finance the estimated annual cost of reducing the livestock VAT rate to 4.5%; and if he has the powers to reduce it. [56506/26]

The VAT rating of goods and services is subject to the requirements of EU VAT law, with which Irish VAT law is required to comply. In general, the EU VAT Directive provides that all goods and services are liable to VAT at the standard rate unless they fall within certain categories to which Member States may apply a lower rate.

As permitted by the Directive, Ireland applies a super-reduced rate of 4.8% to the supply of livestock by a VAT-registered business, and Ireland has discretion regarding changes in the level of this rate. In this regard, livestock means live cattle, sheep, goats, pigs and deer, and horses normally intended for use in the preparation of foodstuffs or in agricultural production.

I am advised by Revenue that traders are not required to identify the VAT yield generated from the supply of specific goods and services on their VAT returns. Therefore, it is not possible to provide cost of reducing the livestock VAT rate from 4.8% to 4.5% using taxpayer information alone. However, using Revenue and third-party data sources, a tentative estimate of the cost of this measure would be in the region of €2m.

Any proposals to change the level of the VAT rate applying to livestock would require careful policy consideration having regard to a range of factors, including the potential impact on Exchequer revenues.