Dáil Éireann debate -
Thursday, 28 Mar 2002

Vol. 551 No. 4

Written Answers. - Taxi Regulations.

Richard Bruton

Question:

122 Mr. R. Bruton asked the Minister for Finance the basis on which losses incurred on a taxi plate following deregulation can be written off against income; the additional cost to the Exchequer of extending the terms of this write-off to cover a write-off against any source of income, rather than just against income for the use of a taxi; and if he will make a statement on the matter. [10918/02]

Minister for Finance (Mr. McCreevy)

As part of the Government's introduction of the new regime for taxi licences, section 51 of the Finance Act 2001 provides for a new scheme of capital allowance for expenditure incurred on the cost of taxi licences acquired on or before 21 November 2000. The allowances are effectively backdated with the cost being deemed to have been incurred on 21 November 1997 where the licence was purchased prior to that date. The cost of the licence can be written off over five years at the rate of 20% per annum in line with the new write-off period for capital allowances for plant and machinery. The write-off will be allowed against the trading income only of the licence owner who drives the taxi. However, if additionally, the same vehicle is rented out on a part-time basis, then the cost can be written off against both the trading income and the rental income from the vehicle in question.

On Committee Stage of the Finance Bill, 2001, I introduced further refinements to the provision as it stood and these are reflected in section 51 of the Act. The objective was to address certain cases of hardship that had been brought to my attention. Accordingly, section 51 also provides that where a licence was inherited from a deceased spouse who carried on a taxi trade, the licence holder may offset the capital expenditure incurred on the original acquisition of the licence against the rental income from the licence, even if there is no trading income from the licence. This measure will only be available in respect of one licence.

On Report Stage I further extended the provisions of section 51 to cater for the situation where a widow or widower, who has inherited the licence from his or her spouse, lets the licence to a third party who provides the associated vehicle. In estimating the cost to the Exchequer of this measure at the time it was assumed that each annual tranche representing 20% of the total qualifying expenditure would be capable of being offset against income arising from the taxi trade alone. I have no plans to make any changes to the operation of this capital allowance.