asked the Minister for Finance in respect of 1986 and 1987 and the estimate for 1988 of the estimated cost to the Exchequer of (a) export sales relief, (b) SFADCo relief, (c) manufacturing profits at a reduced rate of tax, (d) stock relief, (e) accelerated capital allowances, (f) other capital allowances, (g) a reduced rate of corporation tax and (h) Section 84 loans.
Written Answers. - Exchequer Relief Costs.
75.
The following table sets out the information requested in so far as it is available, for the most recent year for which it is available:
Estimated cost to the Exchequer
|
Allowance or Relief |
1986-87 |
1987-88 (latest available) |
|
£m |
£m |
|
|
Export sales relief(¹) |
377.8 |
729.2 |
|
“Shannon” relief(¹) |
29.0 |
116.0 |
|
Manufacturing profits — reduced rate of tax*(²) |
123.5[1986] |
131.4[1987] |
|
Stock relief*(³) |
1.5[1986] |
0.7[1987] |
|
Capital Allowances(4) |
||
|
Accelerated* |
185.0 |
178.0 |
|
Other* |
125.0 |
128.0 |
|
Reduced rate of corporation tax for small companies* |
8.5[1986] |
9.0[1987] |
|
“Section 84” loans(5) |
64.3[1986] |
94.8[1987] |
*These estimates are very tentative and are subject to a wide margin of error.
No account is taken of the fact that but for most of the above 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 the cost figures shown might therefore be regarded as notional.
Notes
(1) Export sales relief and “Shannon” relief
The figures for each year include the tax relief relevant to accounting periods which ended in that year and to earlier accounting periods in so far as such relief was allowed in that year.
(2) Manufacturing profits
These figures represent 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.
(3) Stock relief
Stock relief was not renewed in 1986 for any sector other than farming.
(4) Capital allowances
The figures shown relate 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 immediately preceding each of the years in question, e.g. year ended 5 April 1986 relates to the column headed 1986-87 (6/4/1986 to 5/4/1987).
(5) “Section 84” loans
This figure includes preference share financing which is a minor element in the total. The figures are gross figures, and do not take account of the yield from the levy on Section 84 loan interest which was introduced in 1986. This levy yielded £5.13 million in 1986 and £14.4 million in 1987.