Seamus Brennan
Question:60 Mr. S. Brennan asked the Minister for Finance the proposals, if any, he has to introduce further tax relief on dividends from small companies; and if he will make a statement on the matter. [8492/96]
Vol. 464 No. 6
60 Mr. S. Brennan asked the Minister for Finance the proposals, if any, he has to introduce further tax relief on dividends from small companies; and if he will make a statement on the matter. [8492/96]
70 Miss Harney asked the Minister for Finance if he will introduce an exemption for small businesses in relation to the taxation of royalty dividends; and if he will make a statement on the matter. [8710/96]
I propose to take Questions Nos. 60 and 70 together.
I do not consider that the introduction of divided relief for small companies would be justified in the circumstances. Previous experience with this type of relief has shown that it is of limited value in generating additional equity investment, that it is prone to widespread abuse and that, at best, anti-avoidance safeguards may only be partially effective. Also, the provision of dividend relief, even on a restricted basis, could be very costly. Revenue estimate that the introduction of relief for the small business sector would cost a minimum £10 million in a full year, but the cost could be substantially higher owing to the scope it would provide for tax avoidance on a wide scale.