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Dáil Éireann Debate, Tuesday - 27 July 2021

Tuesday, 27 July 2021

Questions (351, 418)

Gerald Nash

Question:

351. Deputy Ged Nash asked the Minister for Finance the estimated cost of reintroducing tax relief at the standard rate on trade union subscriptions on the same basis as applied up to its abolition in 2011; and if he will make a statement on the matter. [39906/21]

View answer

Richard Boyd Barrett

Question:

418. Deputy Richard Boyd Barrett asked the Minister for Finance the estimated cost of restoring tax relief for trade union subscriptions. [41157/21]

View answer

Written answers

I propose to take Questions Nos. 351 and 418 together.

Tax relief for Trade Union subscriptions was previously provided for under section 472C of the Taxes Consolidation Act 1997. The relief was introduced in 2001 and abolished from 2011 onwards.

A review of the appropriate treatment for tax purposes of trade union subscriptions and professional body fees was carried out by my Department in 2016 and included in the 2016 report on tax expenditures published on Budget day 2016. The review may be found at the following link:

(http://www.budget.gov.ie/Budgets/2017/Documents/Tax_Expenditures_Report%202016_final.pdf)

The review concluded that:

"analysis of the scheme using the principles laid down by the Department’s Tax Expenditure Guidelines shows that it fails to reach the evaluation threshold to warrant introduction in this manner.

The reinstatement of this tax relief would have no justifiable policy rationale and does not express a defined policy objective. Given that individuals join trade unions largely for the well-known benefits of membership, and the potential value of the relief to an individual would equate to just over €1 per week, this scheme would have little to no incentive effect on the numbers choosing to join. There is no specific market failure that needs to be addressed by such a scheme, and it would consist largely of deadweight."

In 2020, my Department carried out a further analysis which took stock of where matters stand in relation to the issue of tax relief for trade union subscriptions and set out a number of policy options for consideration. This exercise suggested that, based on certain assumptions about numbers of beneficiaries, the measure could cost at least €36.9 million if reintroduced at the same level of support as existed in 2010. However, it also drew attention to the potentially significant deadweight element which would accompany the measure. That analysis was published with the 2020 Tax Strategy Group papers at the following link: https://assets.gov.ie/86995/006fad3c-ebb5-4b0e-b067-92f8102d6e43.pdf .

The following table sets out details of the cost of the tax relief for trade union subscriptions in the seven years immediately prior to its end, including 2010 (in which year, the measure cost some €26 million):

Year

Cost (€ million)

No. of Claims

2004

10.7

248,300

2005

11.8

272,100

2006

19.2

294,300

2007

20.7

316,300

2008

26.4

341,900

2009

26.7

345,800

2010

26.0

337,500

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