Wednesday, 8 May 2019

Questions (126)

Mattie McGrath


126. Deputy Mattie McGrath asked the Minister for Finance his views on the way in which the cost of tax expenditures in revenue forgone are calculated; if he is satisfied that the current calculating methodology is adequate; the amount of revenue foregone in each of the years 2011 to 2018 and to date in 2019; and if he will make a statement on the matter. [18920/19]

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Written answers (Question to Finance)

I am advised by Revenue that the available information in respect of the cost of tax expenditures (credits, allowances and reliefs) is published on Revenue’s statistics web page at

My Department also publishes its own Report on Tax Expenditures each year, and I expect that it will be  published with the Budget 2020 documents later this year, as they have been each year since 2015. 

Both Revenue and my Department acknowledge that estimates of revenue foregone can be different due to different definitions of what is included in a list of tax expenditures. My Department uses a classification for tax expenditure which is aligned with an OECD’s definition of tax expenditure.  

The 2017 tax strategy group paper on the topic noted significant advances have been made in the analysis of tax expenditures. There is the Department’s 2014 tax expenditure guidelines, a comprehensive analytical process for evaluations and ex-ante evaluations of proposed new tax incentives.  All tax expenditures that commenced post 2014 have been subject to sunset clauses.

However the Department is unable to provide the cost of tax foregone for around 40 per cent of tax expenditures for a number of reasons including tax payer confidentiality and because the data is not collected by Revenue for some tax measures. For example the Cycle to Work Scheme is currently not costed because it is expected that the administrative cost of collecting the data would exceed the amount of Revenue foregone. Therefore we are unable provide an accurate total figure for tax expenditures.

I am satisfied that the costing basis used, i.e. revenue foregone, provides the most appropriate data to my Department and Revenue.