Dan Boyle
Question:197 Mr. Boyle asked the Minister for Finance the tax concessions available. [24399/02]
Written Answers. - Tax Reliefs.
Dan Boyle
Question:198 Mr. Boyle asked the Minister for Finance if his Department conducts an analysis of the employment benefit provided under each available tax concession in operation; and if so, the information in each case. [24400/02]
I propose to take Questions Nos. 197 and 198 together.
I presume the Deputy is referring to tax expenditures and tax reliefs but not to those which are part of the structure of the income tax system, such as the personal tax credits. I also assume the Deputy is not referring to differential tax rates within different taxes.
Tax expenditures and tax reliefs are spread through the tax system and are found under all tax headings, including income tax and corporation tax, the capital taxes and the indirect taxes.
The following table details major tax incentives-expenditures, i.e. those estimated to cost in excess of €20 million per year, under the following headings: Provision; Numbers benefiting; Cost –€m – per annum; and Year to which the costing refers. Each figure represents the reduction in tax liabilities arising from the existence of the tax incentives-expenditures and should not be regarded as the yield that would be secured should the tax incentives-expenditures be withdrawn. I also draw the Deputy's attention to the footnotes to the table, which are important to note. Additionally, I refer the Deputy to Table IT6 on page 63 of the recently published Revenue statistical report for 2001 which sets out the cost of income tax and corporation tax allowances and reliefs for the tax years 1998-99 and 1999-2000, the most recent for which data are available; it is available to be downloaded from the website of the Office of the Revenue Commissioners at www.revenue.ie/publications/corppubs/anreports.htm. Due to the substantial number of footnotes I regret this table cannot be reproduced in this reply.
The Deputy will note that there are difficulties in providing costs for a number of reliefs. Many are not possible to cost and there are certain reliefs where no return of income is required. There would also be considerable difficulties in providing an analysis of employment benefits arising from individual tax reliefs. A more detailed reply to the Deputy's questions is not possible given the nature and extent of the tax reliefs available. However, I can assure the Deputy that all tax relief schemes are kept under review, especially in the context of the annual budget and Finance Bill, to ascertain that they are fulfilling the purpose or purposes for which they were introduced.
Major Tax Incentives-Expenditures
(Estimated to cost more than €20 per annum)
|
Numbersbenefiting |
Estimated full yearCost (€ million) |
Base year fromwhich costing derives |
Notes |
||
|
Capital Allowances |
|||||
|
Capital Allowances (includes business capital allowances and capital allowances to incentivise certain behaviour such as urban and rural renewal) |
n/a |
1,649 |
2000 |
(1) |
|
|
Corporate |
|||||
|
Resort Relief |
n/a |
106 |
* |
2000 |
(2) |
|
Group Relief |
1,692 |
316 |
2000 |
||
|
Pensions-Savings |
|||||
|
Exemption of the Income of Approved Superannuation Funds (Net of Pension Payments) |
n/a |
1,274 |
* |
1999/00 |
(3) |
|
Employers' Contributions to Approved Superannuation Schemes |
n/a |
645 |
* |
1999/00 |
|
|
Employees' Contributions to Approved Superannuation Schemes |
n/a |
456 |
* |
1999/00 |
|
|
Special Savings Investment Accounts |
1,170,200 |
525 |
2002 |
(4) |
|
|
Retirement Annuity Premiums by Self-Employed |
104,500 |
170 |
2000 |
||
|
Pension Lump Sums |
n/a |
81 |
1999/00 |
(3) (5) |
|
|
Exemption of Interest on Savings Certificates, National Instalment-Savings and Index-Linked Savings Bonds |
n/a |
82 |
2000 |
||
|
Personal |
|||||
|
Child Benefit - exemption from income tax |
n/a |
272 |
* |
2002 |
|
|
Loans relating to principal private residence – interest relief |
462,000 |
205 |
2003 |
||
|
Relief in respect of Medical Insurance Premiums |
533,000 |
160 |
2002 |
||
|
Expenses allowable to Employees under Schedule E (work related) |
856,900 |
61 |
2001 |
||
|
Health Expenses Relief |
99,900 |
38 |
2000 |
||
|
Rented Residential Accommodation |
n/a |
31 |
* |
2000 |
|
|
Investment in Corporate Trades (BES) |
n/a |
23 |
2000/01 |
(6) |
|
|
Investment in Films |
n/a |
24 |
2000 |
(7) |
|
|
Capital Taxes |
|||||
|
Principal Private Residence - CGT exemption |
n/a |
787 |
2002 |
(8) |
|
|
Stamp Duty Relief for new homes |
n/a |
112 |
2001 |
||
|
Exemption from CGT on occasion of Death |
n/a |
47 |
2002 |
(8) |
|
|
Indirect Tax |
|||||
|
Disabled Drivers and Disabled Passengers Tax Concessions |
7,500 |
38 |
2002 |
(9) |
|
|
Farm Buildings and Land (VAT Refund) |
n/a |
30 |
2001 |
||
|
Excise relief for local public transport vehicles |
n/a |
20 |
2002 |
(10) |
|
|
Other Income Tax |
|||||
|
Exemption of income of Charities, Colleges, Hospitals, Schools, Friendly Societies etc. |
n/a |
87 |
2000 |
(11) |
|
|
Artists Relief |
941 |
30 |
2000 |
||
|
Donations to Charitable Organisations |
n/a |
29 |
2000 |
||
|
Relief under Profit-Sharing Schemes |
n/a |
22 |
* |
2000 |
Notes on Table
Figures accompanied by an asterisk * are particularly tentative and subject to a considerable margin of error.
Note 1
Capital allowances represent deductions from income for tax purposes; they may be in lieu of depreciation, arising under accountancy rules, on plant, machinery or industrial (including farm) buildings, or they may arise in giving effect to incentive reliefs such as under the urban and rural renewal schemes.
The cost shown for capital allowances does not include any cost associated with "unused capital allowances", that is, capital allowances which are not absorbed by a company in the accounting period in which they arise because they exceed the amount of the company's profits of that accounting period and which are available for offset. Unused capital allowances can be offset as losses against taxable profits arising in the previous accounting period and against certain profits arising in future accounting periods and can be offset against the profits of another company in the same group of companies.
Note 2The Resort Relief figure relates to an exercise carried out by Revenue and is a very tentative estimate. The figure for the cost of the relief from its introduction until September 2000 (the scheme was introduced in January 1995) is estimated at €317.4 million; the figure shown is an annual estimate.
Note 3In the absence of other information, tax has been assumed at the standard rate even though a different rate might be appropriate in many cases.
Note 4This is on the basis that the level of investment in the most recent month for which figures are available broadly continues. As the scheme did not close until the end of April and more new accounts were being opened in the first four months of the year, the full cost will be greater than the expected 2002 cost of €435 million. The expected full year cost is of the order of €525 million. The cost of the scheme is affected where participants die, withdraw from the scheme or vary their monthly contributions. The expected costs provided above assume that these variations will broadly cancel each other out. The SSIA scheme will end five years from when the first contribution was made, i.e. between 1 May 2006 and 30 April 2007.
Note 5This is the most recent estimate provided by Revenue; it is not currently possible to capture this figure by way of tax returns.
Note 6Due to an increase in the BES investment limit, there will be an additional cost of €3.7 million in 2002.
Note 7Film Relief is scheduled to end on 31 December 2005.
Note 8CGT is not payable where the capital gain is in respect of the disposal of a person's Principal Private Residence. The figure for the cost of this relief makes no allowance for the number of cases where the disposal of the property was on death, and would therefore be exempt from CGT even in the absence of this relief. The Revenue Commissioners have no basis upon which to estimate the proportion of disposals of principal private residences which are sales on the death of owners.
Note 9Benefits here include refunds of VRT and VAT on the purchase of the vehicle. VAT (subject to a limit) on the cost of adaptations carried out, repayment of excise duty up to a maximum of 600 gallons and anyone with a primary medical certificate is exempt from road tax. Cost was €31.8 million in 2001 and is expected to rise to €38 million in 2002.
Note 10This was €16.5 million in 2001 but has risen to €17.4 million in the nine months to end September 2002 and is estimated to amount to some €20 million in the full year.
Note 11The cost of exempting the income of charities, colleges, hospitals, schools, friendly societies, etc. from income tax includes the sums repaid in respect of tax credits and income tax deducted at source (certain dividends, other investment income and payments received under covenant). It also includes the cost of exempting certain bodies from the deduction on income arising from government securities.