Vol. 494 No. 4
253 Mr. Gormley asked the Minister for Finance his views on whether the fiscal regime currently applying to the use of company cars constitutes an impediment to the objective of sustainable development; and if he will make a statement on the matter. [18347/98]
The tax code contains provisions which affect company cars in two areas: the taxation of the benefit to directors and employees derived from the private use of motor cars provided by their employers; the capital allowances and running expenses that are allowed for motor cars used for a business or employment. The charge to tax on the benefit derived from the private use of a car is levied on a "cash equivalent" based on a specified percentage of the original market value of the car. This percentage ranges from 18 per cent where the car only is supplied, to 30 per cent where, in addition to providing the car, the employer meets all running costs. Tapering relief which reduces the cash equivalent is available where business miles exceed 15,000 a year. An alternative relief, which reduces the cash equivalent by 20 per cent, is granted where specified conditions are met.
The amount of capital allowances and the deduction for running expenses granted for tax purposes in respect of motor cars used in the course of a trade, profession or employment are granted by reference to a capital limit. This limit currently stands at £15,500 for new cars. Capital allowances for cars costing in excess of this amount are limited to what they would be if the car cost £15,500. Running expenses are also restricted by means of a formula linked to that limit. The limit is set approximately at the capital cost of a 1.6 litre car. In so far as this limit restricts the amount which can be claimed, it favours small to medium size cars and discriminates against larger, more expensive and less environmentally friendly cars.
I do not accept that the fiscal regime outlined above constitutes an impediment to the objective of sustainable development.
254 Mr. Gormley asked the Minister for Finance the plans, if any, he has to give consideration to proposals which, if incorporated in the forthcoming budget, would assist in effecting a shift away from ecologically damaging behaviour on the part of industry in particular; and if he will make a statement on the matter. [18350/98]
256 Mr. Sargent asked the Minister for Finance whether his Department has proposals to facilitate a full employment environment through the implementation of taxation measures so directed, that is, through the progressive switching of taxation away from human effort and towards non-renewable energy sources, carbons and land use; and if he will make a statement on the matter. [18353/98]
260 Mr. Gormley asked the Minister for Finance if his attention has been drawn to the generalised ECO tax which is to be introduced in France next year and which will include an increase on taxes relating to landfilling and incineration of 50 per cent; his views on whether such a taxation regime would have beneficial results in this jurisdiction in terms of reducing dependence on these two environmentally damaging waste management options; and if he will make a statement on the matter. [18366/98]
I propose to take Questions Nos. 254, 256 and 260 together.
Deputies will appreciate that it would not be appropriate for me to comment on taxation proposals in the run-up to the forthcoming budget. I can assure the Deputies, however, that I expect to receive a report from the interdepartmental group, established following the budget of 23 January 1996 and whose remit is to examine the strategic impact of taxation on environmental policy. I am sure that this group will take note of what the Deputies say on the role of environmental taxation.
