Vol. 536 No. 4
28 Mr. Sargent asked the Minister for Finance if he will bring forward plans to amend the Finance Act, 2001, in order that all public sector workers can avail of the provision to encourage public transport use as provided for in section 33 of the Finance Act, 1999. [14176/01]
I have no plans to amend section 33 of the Finance Act, 1999, as suggested by the Deputy. That section, which applies equally to employees in the civil and public sectors as it does to private sector employees, waives a BIK tax charge on an employee in respect of the expense incurred by the employee's employer in providing the employee with a travel pass. For the exemption to apply, the employer must incur the expense of the travel pass. It is not sufficient for the employer to purchase a pass and recover the cost from the employee – in such circumstances the cost would be borne by the employee.
In September 2000 the Revenue Commissioner's issued a statement in their tax briefing outlining the circumstances in which they would be prepared to accept that the cost had been borne by the employer where an employee forewent salary in favour of a travel pass. The necessary conditions are as follows: there must be a bone fide and enforceable alteration to the terms and conditions of employment exercising a choice of benefit instead of salary; the alteration must not be retrospective and must be evidenced in writing; there must be no entitlement to exchange the benefit for cash; the choice exercised, that is, benefit instead of cash cannot be made more frequently than once a year and then only with the consent of the employer.
The introduction in the Civil Service of the travel pass scheme provided for in the 1999 Finance Bill, which underpins Government policy on greater use of public transport, is currently being examined.
Following recent discussions with the staff side at general council, all Departments and offices were contacted for their observations on the introduction of such a scheme. A number of scheduling and technical problems, highlighted by Departments, are being examined.
