Ruairí Quinn
Question:40 Mr. Quinn asked the Minister for Finance the measures he will take on foot of the Government decision to deregulate the taxi market; and if he will make a statement on the matter. [28010/00]
Written Answers. - Taxi Regulation.
As I indicated last week, it is my intention to provide for tax relief in respect of the historic cost of taxi plates bought by existing taxi licence holders. The price actually paid for a plate will be treated as capital expenditure for tax purposes similar to plant and machinery bought by a business. Accordingly, a capital allowance will be applicable so that the actual cost of a taxi plate can be written down over a period of years, similar to plant and machinery. At present, a capital allowance is claimable over seven years at a rate of 15% of the cost of the asset for each of the first six years with the final 10% in year seven.
For example, in a case where a taxi plate was bought for £50,000, the owner-driver may offset £7,500 for each of the first six years, against taxable trading income earned in this period and £5,000 in the final year, year seven. In the event the owner-driver has less than £7,500 or £5,000 in taxable income per annum – on even no taxable income – he or she will be able to carry forward the unused amount to a later year or years for off-setting purposes.
The capital allowance will be fully offsettable against taxable earnings at the marginal rate of tax payable by the taxi drivers concerned. The allowance will be based on the historic or actual cost of the taxi plate. Finally, only the trading income derived from a taxi by the owner himself/herself may be taken into account in using the capital allowance. In other words, the allowance will not be offsettable against other income.
This information was communicated to the representative taxi organisations at a meeting on Tuesday last between them and Minister of State at the Department of the Environment and Local Government Deputy Molloy, who is responsible for taxi regulation.