Dáil Éireann debate -
Tuesday, 1 May 2001

Vol. 535 No. 1

Written Answers - Tax Incentives.

David Stanton

Question:

269 Mr. Stanton asked the Minister for Finance if he will report on the success or otherwise of the tax incentive for energy production under section 486B of the Taxes Consolidation Act, 1997; the applications which have been made under the scheme to date; the number of applications currently being considered by the Government in this regard; the cost to the Exchequer regarding revenue; his plans for the future of the scheme; and if he will make a statement on the matter. [12341/01]

Minister for Finance (Mr. McCreevy)

Section 62 of the 1998 Finance Act and section 486B of the Taxes Consolidation Act, introduced a new relief for corporate investment in certain renewable energy projects. It was necessary to obtain EU Commission approval for the relief, which took about a year. The relief then commenced on 18 March 1999 and will last until 18 March 2002. I am informed by the Office of the Revenue Commissioners that, since its enactment six corporate investments totalling £15.35 million have been made under the scheme which involve an estimated Exchequer cost of about £4 million.

While there is no specific tax relief incentive for individuals investing in renewable energy projects, it emerged last year that individuals were making use of certain tax based leasing partnerships to invest in renewable energy projects so as to reduce their income tax liability. This loophole was closed off in the Finance Act, 2000, with transitional relief applying up to 28 February 2001 with the associated tax cost continuing for some years thereafter. The potential tax cost of such schemes could exceed £200 million, depending on the uptake. The question of a tax incentive for investment in renewable energy was discussed in some detail in the Seanad in the course of Committee Stage of the Finance Bill, 20001. I indicated during this debate that I am prepared to look at incentivising people in this area, either through tax breaks or by way of a subsidy as the Government may consider.