Léim ar aghaidh chuig an bpríomhábhar

Dáil Éireann díospóireacht -
Wednesday, 1 Feb 1978

Vol. 303 No. 2

Financial Resolutions, 1978: Financial Statement, Budget, 1978. - Capital allowances

As regards capital allowances allowed to industry for tax purposes, Deputies will be aware that "free depreciation" for new plant and machinery enables the entire cost of such investment to be deducted straightaway for tax purposes. It is on a permanent basis in the designated areas. In the rest of the country, however, it has been subject to renewal at intervals of two years since its introduction in 1971.
The current two-year period is due to end in March 1979. The purpose of the short-term basis of free depreciation in the past was to stimulate early investment by manufacturing industry as well as to keep options open in the matter of the long-term level of capital allowances for new plant and machinery. The Government have decided that the need for industrial growth would be better served by allowing free depreciation for plant and machinery as a normal and continuing feature of our capital allowances arrangements for the whole country.
For industrial buildings, the initial capital allowance at present stands at the accelerated rate of 50 per cent which is also on a temporary statutory basis. Having considered the matter, I propose that free depreciation will be available to industrialists for their expenditure on new industrial buildings with effect from tomorrow. This means that as much as 100 per cent of the capital cost can be written off in the first year, if so desired. The allowance will be on a net cost basis as at present —that is to say, net cost after deduction of grants payable. The detailed provisions in relation to capital allowances will be included in the Finance Bill.