Dáil Éireann Debate, Wednesday - 13 July 2022
131. Deputy Ged Nash asked the Minister for Finance the anticipated savings to the Exchequer in 2023, from ending the employment and investment incentive scheme, the key employee engagement programme, the special assignee relief programme and the foreign earnings deduction in tabular form; and if he will make a statement on the matter. [38625/22]
View answer132. Deputy Ged Nash asked the Minister for Finance the anticipated savings to the Exchequer in 2023 from the ending rent-a-room relief; and if he will make a statement on the matter. [38626/22]
View answerI propose to take Questions Nos. 131 and 132 together.
I am advised that Revenue does not maintain a projected future cost for each of the schemes outlined by the Deputy, given the number of variables that would be involved.
However, the costs of the Employment Investment Incentive (EII), the Special Assignee Relief Programme (SARP), the Foreign Earnings Deduction (FED) and the Rent-a-Room scheme can be found in the ‘Cost of Tax Expenditures Report’ which is published on the Revenue website at www.revenue.ie/en/corporate/documents/statistics/tax-expenditures/costs-tax-expenditures.pdf.
A summary table of the costs in relation to 2018 (the latest year for which data are available, except for SARP, in respect of which the 2019 figure is available) is as follows:
|
Measure |
2018 cost (€m) |
|
Employment Investment Incentive (EII) |
14.5 |
|
Special Assignee Relief Programme (SARP) |
38.2 (2019) |
|
Foreign Earnings Deduction (FED) |
5.4 |
|
Rent-a-Room relief |
19.7 |
Regarding the Key Employee Engagement Scheme (KEEP), I am advised by Revenue that the first year the scheme became available was 2018. Generally, a qualifying employee must hold any share options granted under the scheme for at least 12 months prior to exercise. Therefore, 2019 was the earliest date that individuals were likely to exercise their options to acquire shares in qualifying companies. Revenue advises that the table below sets out the KEEP costs in 2019 and 2020:
|
Year |
Cost (€m) |
|
2019 |
0.1 |
|
2020 |
0.2 |
With the exception of the EII, the costs set out above can be assumed to be very broadly indicative of the annual saving that might arise if the schemes were ended. In the case of the EII, enhancements to the scheme made in Finance Act 2021 may give rise to an additional tax foregone cost of in the region of €10 million in the current tax year. Taking this factor into account, it is estimated that the abolition of the scheme beyond the current year could give rise to savings broadly of the order of €25 million.
As matters stand, there is no sunset clause attached to the Rent-a-Room relief, but SARP and FED are due to expire on 31 December 2022. The current sunset clause for EII extends to 31 December 2024.
As part of the preparations for Budget 2023 and Finance Bill 2022, my Department has undertaken a review of KEEP. A public consultation took place as part of this review, inviting stakeholders to comment on the operation of the scheme as it currently stands and to submit proposals for further improvements to the scheme. The output from this review will be considered as part of the forthcoming the Budget and Finance Bill process.
