Written Answers. - Tax Foregone.

Pat Rabbitte

Question:

109 Mr. Rabbitte asked the Minister for Finance the estimated cost to the Exchequer of tax foregone in respect of tax relief on section 84 type loans in each of the last ten years.

Following is the information requested which has been estimated by the Revenue Commissioners:

"Section 84" loans — estimated cost to the Exchequer.

Year

Estimated Cost

£million

1980

5

1981

8

1982

50

1983

58

1984

69

1985

76

1986

64

1987

95

1988

112

1989

128

The figures of cost include 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 £14.4 million in 1987, £18.5 million in 1988 and £24.9 million in 1989.
The Deputy will be aware that measures were taken in the 1989 and 1990 Finance Acts to restrict the growth of section 84 lending.
As the figure for 1989 relates to accounting periods ending not later than 31 March 1989, it would not reflect the effect of the 1989 Finance Act measures.