asked the Minister for Finance the cost in revenue foregone of reducing the 23 per cent VAT rate to 10 per cent for the current year.
Written Answers. - Tax Reduction Costs.
390.
The cost in a full year, based on 1983 estimated figures, of a reduction to 10 per cent in the 23 per cent rate as at present applied is calculated at about £530 million.
391.
asked the Minister for Finance the amount of tax foregone in 1982 in respect of (a) tax based lending, (b) export sales relief and (c) accelerated capital allowance.
Following is the information requested in so far as it is available:
(a) Tax-based lending is estimated to have cost £155 million in corporation tax foregone in 1982. The cost of the relief was inflated in that year by the effects of bringing forward the due dates for payment of corporation tax. Effectively, this meant that the companies responsible for the bulk of the tax-based lending were required to pay two years tax in 1982. In the absence of the changes in the due dates the cost of the relief would have been in the region of £70 million. This figure includes the cost of tax relief on leased plant and machinery, "section 84" loans and preference share financing.
(b) The latest available data on export sales relief is in respect of relief allowed in the period 1 February 1982 to 31 January 1983 which resulted in an estimated £96 million in tax foregone.
(c) The cost of accelerated capital allowances is by reference to the income tax year 1982-83. For this period, the cost is estimated at £97 million. This figure includes a cost of £40 million for accelerated capital allowances which is also part of the £70 million figure shown at (a) above.