Funding for existing overseas aid projects will be cut by up to €1 million in order to pay for a VAT refund on Band Aid DVD and CD sales. Joe Humphreys reports.
The Department of Foreign Affairs confirmed yesterday that the VAT refund, announced by the Taoiseach earlier this month, would be funded through the current aid budget of Development Co-operation Ireland (DCI) rather than through additional funding.
A Department spokesman said it had yet to establish what aid funds would be used to pay for the 21 per cent rebate on sales.
He said it would more than likely come from next year's budget of DCI, the Department's overseas development aid arm.
The Live Aid DVD is expected to achieve sales of up to 50,000 and the Band Aid 20 single up to 150,000, producing VAT bills of about €630,000 and €160,000 respectively.
The Department said exempting the sales from VAT would not have been possible, and as a result an equivalent sum to the VAT bill would be paid - through DCI funds - to the Band Aid Charitable Trust.
The Government's decision followed an announcement by the UK treasury department that it would forgo VAT on Band Aid DVD and CD sales.