Dáil Éireann Debate, Wednesday - 20 September 2023
176. Deputy Neasa Hourigan asked the Minister for Finance if his Department, as part of developing budgetary proposals, has examined the potential introduction of a tax credit for trade union fees; and if he will make a statement on the matter. [40471/23]
View answerTax 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 onward.
A review of the appropriate treatment for tax purposes of trade union subscriptions and professional body fees was carried out by the Department of Finance 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: assets.gov.ie/181475/91f597c2-bd98-41d8-998e-19f14c099eea.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, the Department of Finance 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 dead weight element which would accompany the measure. That analysis was published with the 2020 Tax Strategy Group papers at: assets.gov.ie/86995/006fad3c-ebb5-4b0e-b067-92f8102d6e43.pdf
In relation to the question of the potential introduction of a tax credit for trade union fees, it is a longstanding practice of the Minister for Finance not to comment, in advance of the Budget, on any matters that might be the subject of Budget decisions. I would add that any such decisions must have regard to the sound management of the public finances and my Department's Tax Expenditure Guidelines.
