Dáil Éireann díospóireacht -
Thursday, 17 May 2001

Vol. 536 No. 4

Written Answers. - Taxi Licence Holders.

Eamon Gilmore

Ceist:

60 Mr. Gilmore asked the Minister for Finance if he has proposals to further assist those retired taxi drivers or widows of licence holders who have suffered genuine hardship as a result of the new regime; and if he will make a statement on the matter. [10144/01]

Minister for Finance (Mr. McCreevy)

As part of the Government's policy in introducing the new regime for taxi licences, section 51 of the Finance Act 2001 provides for a new scheme of capital allowance for expenditure incurred on the cost of taxi licences acquired on or before 21 November 2000. The allowances are effectively backdated with the cost being deemed to have been incurred on 21 November 1997 where the licence was purchased prior to that date.

The actual cost of the licence can be written off over five years at the rate of 20% per annum in line with the new write-off period for capital allowances for plant and machinery. The write-off will be allowed against the trading income only of the licence owner who drives the taxi. However, if additionally, the same vehicle is rented out on a part-time basis, then the cost can be written off against both the trading income and the rental income from the vehicle in question.

On Committee Stage of the 2001 Finance Bill, I introduced some further refinements to the provision as it then stood and these are now also reflected in section 51 of the Act. The objective was to address certain ‘hardship' cases that had been brought to the my attention. Accordingly, section 51 also provides that where a licence was inherited from a deceased spouse who carried on a taxi trade the licence holder may offset the capital expenditure incurred on the original acquisition of the licence against the rental income from the licence, even if there is no trading income from the licence. This measure will only be available in respect of one licence. In cases where inheritance tax or probate tax was paid in respect of a taxi licence, the value used for such tax pur poses may be used instead of the actual capital expenditure cost, if that value is higher.

On Report Stage I further extended the provisions of section 51 to cater for the situation where a widow or widower, who has inherited the licence from his or her spouse, lets the licence to a third party who provides the associated vehicle.

As I said on both the Committee and Report Stages, what has been offered to taxi drivers affected by deregulation is a much improved position on that which existed beforehand. Those taxi drivers can now offset the cost of their taxi licences against both their trading income and, in the case mentioned above, their rental income, on the basis of one licence only per licence owner. Previously, a taxi licence owner would not have been allowed to write off the expenditure incurred in buying a plate against his or her income.

I have no plans to make further changes.