Vol. 418 No. 8
48 Mr. Callely asked the Minister for Finance if he will give details of the revenue which was generated from benefit-in-kind on company cars in the tax years ending (a) April 1989, (b) April 1990, (c) April 1991 and (d) the estimated figure for April 1992; and if he will outline the estimated revenue to be generated in April 1992 as per the recent budget announcement.
I am informed by the Revenue Commissioners that to determine the precise yield from the taxation of the private use of business cars in any year would require identification of all the cases involved and an examination of the income tax returns of such cases. Such an examination could only be carried out at a disproportionate cost.
However, it is tentatively estimated that the yield from taxing the benefit associated with the private use of an employer-provided car has been of the order of £35 million annually over the period referred to by the Deputy.
The changes announced in the 1992 budget would have yielded an estimated additional £27 million in a full year with £16 million arising in 1992.
While satisfied that the BIK increases announced in the budget are fully justified compared with the cost of private motoring, I have decided to make certain changes which will reduce the impact of the increases on employees, such as company representatives and commercial travellers, who drive very high business mileage. The Finance Bill, 1992 provides for the phasing-in over five years of the minimum 25 per cent charge allowable under tapering relief. This concession will mean that the minimum charge will be 5 per cent in 1992-93, 10 per cent in 1993-94, increasing by equal amounts to 25 per cent in 1996-97. The new tapering relief tables are set out in the First Schedule to the Bill.
This concession will not affect the full year yield but will have an impact on the Exchequer during the transitional period. The cost of this concession will peak at almost £4 million in 1993.
