Vol. 461 No. 4
58 Mr. S. Brennan asked the Minister for Finance if he will seek agreement from the Government to have the 10 per cent corporation tax rate and the business expansion scheme applied to air transport industry in view of its central nature in developing Ireland's economy. [2859/96]
62 Mr. S. Brennan asked the Minister for Finance the plans, if any, he has to apply the 10 per cent corporation tax rate and the business expansion scheme to the air transport industry to encourage its development in view of the fact that it is central to our trade and tourism sectors. [2874/96]
I propose to take Questions Nos. 58 and 62 together.
The Deputy will appreciate that, as a member of the European Union, the Government is constrained as regards the provision of preferential rates of tax and that tax incentives generally are required to respect EU rules governing competition and the internal market.
An extension of the 10 per cent rate of corporation tax to the air transport industry would constitute a State aid under EU law, capable of distorting competition, and therefore would require the approval of the EU Commission. Given the rigorous enforcement of State aids rules in so far as the air transport industry is concerned, it is most unlikely that such approval would be forthcoming and no useful purpose therefore would be served in approaching the Commission on this matter.
As regards extending the BES, the review of the scheme as promised in the Government programme has been completed and I announced changes to the scheme in my recent budget statement. I have no plans at present for any futher extension of the scheme.
