Vol. 551 No. 2
232 Mr. Deasy asked the Minister for Finance if the Government will consider introducing a scheme to encourage wealthy Irish people to donate large sums of money for good causes such as the provision of lifeboats, hospital wards and equipment and other worthwhile causes. [9206/02]
I have long believed that providing tax relief for donations to worthy causes stimulates individuals and companies to donate money to them. I also believe that if people want to donate money to good causes, then tax relief should be provided to encourage them to do so. Therefore, prior to last year's Finance Act, I decided to look at the whole area of tax relief for donations. At that time there were thirteen different reliefs for donations to various bodies with widely differing qualifying conditions. Having considered the area carefully, I decided to simplify and rationalise the various tax reliefs in this area and, as part of this simplification process, most of the existing tax reliefs for donations were allowed to lapse.
Accordingly, in Finance Act 2001, I introduced a new scheme of tax relief on donations made by either individuals or corporate bodies to eligible charities and other approved bodies including first and second level schools and third level institutions including universities. An eligible charity is any charity in the State which has been granted exemption from tax for a period of not less than three years and which is authorised by the Revenue Commissioners for the purpose of the new scheme. The minimum qualifying donation for relief purposes to an eligible charity or approved body is €250 per annum and there is no upper limit on the amount which can be donated. Donations for any one year can be on a cumulative basis so that a weekly donation of €5 can qualify for the relief. The relief on the donation will be at an individual's marginal rate of tax.
The arrangements for allowing tax relief on donations will depend on whether the donor is a PAYE taxpayer or an individual on self-assessment or a company. For a PAYE taxpayer, the relief will be given at the donor's marginal rate of income tax and will be given on a grossed up basis to the charity. This means the tax refund will go to the charity. In the case of a donation made by an individual who is self-assessed, the individual will claim the relief and there is no grossing up arrangement. Similarly, in the case of companies, they can claim deductions for donations as if they were a trading expense. I believe sincerely that this simple and widely expanded tax relief will encourage greater giving.
I announced in the budget last December that donations made to certain sports capital projects may benefit from tax relief. I am happy to have been able to do this, as I am confident that this new scheme of relief will act as a major incentive for the development and improvement of sports facilities throughout the State.
