In 1958 a tax was introduced on benefits-in-kind but at that time canteens were excluded from the provision. However, because employees earning less than £1,500 at the time were not liable to benefit-in-kind tax, employees on an ordinary wage were not affected. As inflation increased, however, the £1,500 limit did not and, therefore, more ordinary workers became liable to pay the tax.
In 1965 the Revenue Commissioners introduced a practice whereby meal vouchers up to a limit of three shillings were, by concession, not liable to the benefit-in-kind tax. This maintained an equity between employees in organisations which had canteens and those which provided meal vouchers instead. The terms of the concession for meal vouchers ensured the voucher was non-transferable, used for ready-to-eat meals and generally available to employees. This prevents any abuse of the concession. However, as neither the limit of three shillings – which became 15p with decimalisation and 19 cent when we changed over to the euro – nor the £1,500 limit was adjusted for inflation, the treatment has become more unequal. An employee who is able to get a meal in a canteen has gained substantially over one who is provided with a meal voucher.
This unequal treatment will be made worse by the provisions in the Finance Bill whereby it is proposed to introduce PRSI on benefits-in-kind, as employees provided with canteens will still remain exempt. It is almost certain that employers, both in the public and private sectors, currently using meal vouchers will cease to provide them in future. This inequality is borne by employees in smaller companies or those who work unsocial hours where it is uneconomic for an employer to provide canteen facilities. I will now provide a list of countries showing when their relevant laws were last updated, with the relevant exemption limits.
Austria last updated its law in this area in 1994 and an exemption limit of €4.40 applies, Belgium increased the exemption limit to €4.44 in 1998, the Czech Republic increased it to €1.52 in 2002, France increased it to €4.60 in 2001, Germany increased it to €3.10 in 1999, Greece increased it to €2.70 in 1995, Hungary increased it to 80 cent in 2002, Ireland increased it to 19 cent in 1965, Italy increased it to €5.29 in 1998, Luxembourg increased it to €5.60 in 2001, Poland increased it to €2.30 in 1998, Portugal increased it to €5.93 in 2000, Slovakia increased it to €1.71 in 2002, Spain increased it to €7.81 in 1999, Switzerland increased to €4.74 in 2004 and Turkey increased it to €4.44 in 2002.
One can note from that list the ludicrous position in Ireland in regard to these vouchers, with the value of one voucher being only 19 cent. The law providing for these vouchers has not been updated since 1965. In addition, injustice will now be heaped on those 30,000 people who benefit from these vouchers by categorising them as a benefit-in-kind under the budget. I ask the Minister of State to seriously examine this matter and to readjust the position.