asked the Minister for Finance the estimated cost of all tax expenditure to industry for 1988.
Written Answers. - Tax Expenditure to Industry.
36.
The information requested is shown, in so far as it is available, in the following table for the most recent year for which it is available.
Statistics are not recorded in such a manner as would enable the information requested by the Deputy to be provided in relation to other reliefs and incentives, for example: expenditure incurred in mining operations; expenditure incurred on acquiring industrial knowhow; payments to an Irish university or other qualifying educational establishment to enable it to undertake research in, or engage in the teaching of, industrial relations, marketing or any other approved subject; expenditure incurred by a trader on scientific research; certain expenditure incurred on recruiting and training of local staff; expenditure incurred on the acquisition of patent rights and the tax exemption accorded to income arising from the devising of certain patents. Such information either could not be obtained or could not be obtained without undertaking inquiries which could be carried out only at a disproportionate cost.
Estimated Cost to the Exchequer
|
Allowance or Relief |
1987-88 |
|
£m |
|
|
Capital allowances*(¹) |
306.0 |
|
Export sales relief(²) |
729.2 |
|
“Shannon” relief(²) |
116.0 |
|
Manufacturing profits — reduced rate of tax*(³) |
131.4(1987) |
|
Reduced rate of corporation tax for small companies* |
9.0(1987) |
|
“Section 84” loans(4) |
94.8(1987) |
|
Urban renewal(5) |
Negligible |
*These estimates are very tentative and are subject to a wide margin of error.
(¹)Capital allowances
The figure shown relates to the cost of the relief granted to companies and self-employed individuals. The cost included for companies is by reference to accounting periods ending in the year ended 5 April 1987.
(²)Export sales relief and "Shannon" relief
The figures include the tax relief relevant to accounting periods which ended in 1987-88 and to earlier accounting periods in so far as such relief was allowed during 1987-88.
(³)Manufacturing profits
This figure represents the estimated loss to the Exchequer arising from the charging of manufacturing and other qualifying profits at reduced rates of corporation tax instead of at normal rates.
(4)"Section 84" loans
This figure includes preference share financing which is a minor element in the total. The £94.8 million is a gross figure and does not take account of the yield from the levy on section 84 loan interest which was introduced in 1986. This levy yielded £14.4 million in 1987.
(5)Urban renewal
Relief from income tax and corporation tax was introduced under Chapter V of the Finance Act, 1986 to promote urban renewal and development in certain areas.
No account is taken of the fact that without these incentives many of the enterprises involved might not have been set up in this country. To the extent that the profits earned by such enterprises would not have been available for Irish tax purposes part of each cost figure shown might be regarded as notional.