Finance Minister sought to cut Vat on cycles and e-bikes in budget
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Plans for a significant cut to the rate of Vat on bicycles and electric bikes were dropped at the last minute in the run-up to October's budget.
Officials at the Department of Finance had been working on plans for chopping the rate to 13.5% from 23%, with Finance Minister Michael McGrath eager to have the change implemented before Christmas.
However, the plan did not go ahead due to legislative complexities and the possibility it would encourage other business groups to press for similar Vat reductions.
A Department of Finance submission said officials had examined the possibility of reducing the Vat rate to as low as 9% as a way of encouraging the purchase and use of bicycles and e-bikes.
“Our concern is that if a concession is made to a category such as bikes, others may build a case to be moved into this lower category," the submission said.
In a submission in late September, Mr McGrath had said: “For now, please do the necessary drafting to reduce Vat on bikes and e-bikes to 9%."
However, in a subsequent submission in early October, Mr McGrath said he did not plan to go ahead with the cut in his budget.