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Tax Code.

Dáil Éireann Debate, Thursday - 19 February 2004

Thursday, 19 February 2004

Ceisteanna (123, 124, 125)

Caoimhghín Ó Caoláin

Ceist:

120 Caoimhghín Ó Caoláin asked the Minister for Finance the cost to the Exchequer of the capital allowances for construction or refurbishment of buildings used as private hospitals and private sports injuries clinics under section 268 of the Taxes Consolidation Act 1997; if an analysis has been done as to the supposed benefit or otherwise of these allowances to the economy and society; and if he will make a statement on the matter. [5481/04]

Amharc ar fhreagra

Freagraí scríofa

I am informed by the Revenue Commissioners that tax relief for private hospitals and sports injury clinics are not at present captured in such a way as to provide a dedicated basis for compiling estimates of cost to the Exchequer. Claims for these reliefs are aggregated in tax returns with other claims, such as with industrial buildings allowances generally or with other capital allowances, and do not distinguish between the reliefs claimed in respect of the different schemes. Accordingly, the specific information is not readily available and could not be obtained without conducting a protracted investigation of the Revenue Commissioners' records.

I consider it important that data be improved to facilitate assessments of such expenditures and reliefs. The Department of Finance has been working closely with the Revenue Commissioners to investigate information and data capture issues arising with a view to producing possible solutions. The challenge is twofold: the first is to identify the optimal manner of obtaining the information that is required to monitor and cost existing reliefs and the second is to obtain such information with due regard to not overburdening compliant taxpayers. Bearing this in mind the Revenue Commissioners will be introducing a number of changes to the forms relating to the annual return of income in respect of the tax year 2004. These changes will yield additional information regarding the cost of various tax reliefs, including those referred to by the Deputy.

As these schemes were introduced in the past few years, no formal review of these schemes has yet been undertaken. However, these schemes will be kept under examination, especially in the context of the annual budget and Finance Bill process, to ensure they continue to meet the purposes for which they were introduced.

Caoimhghín Ó Caoláin

Ceist:

121 Caoimhghín Ó Caoláin asked the Minister for Finance the cost to the Exchequer of the capital allowances for hotels, holidays camps and holiday cottages; if an analysis has been done as to the supposed benefit or otherwise of these allowances to the economy and society; and if he will make a statement on the matter. [5482/04]

Amharc ar fhreagra

I am informed by the Revenue Commissioners that tax relief for hotels, holiday camps and holiday cottages are not at present captured in such a way as to provide a dedicated basis for compiling estimates of cost to the Exchequer. Claims for these reliefs are aggregated in tax returns with other claims, such as with industrial buildings allowances generally or with other capital allowances, and do not distinguish between the reliefs claimed in respect of the different schemes. Accordingly, the specific information is not readily available and could not be obtained without conducting a protracted examination of the Revenue Commissioners' records.

I consider it important that data be improved to facilitate assessments of such expenditures and reliefs. The Department of Finance has been working closely with the Revenue Commissioners to investigate information and data capture issues arising with a view to producing possible solutions. The challenge is twofold: the first is to identify the optimal manner of obtaining the information that is required to monitor and cost existing reliefs and the second is to obtain such information with due regard to not overburdening compliant taxpayers. Bearing this in mind the Revenue Commissioners will be introducing a number of changes to the forms relating to the annual return of income in respect of the tax year 2004. These changes will yield additional information regarding the cost of various tax reliefs, including those referred to by the Deputy.

Tax expenditure schemes are kept under review in the context of the annual budget and Finance Bill process. Following an examination of tax relief schemes, in budget 2003, I announced the special regime of accelerated capital allowances in respect of hotels and holiday camps, as well as holiday cottages, was set to be terminated subject to transitional arrangements. As I announced on budget day, in cases where a planning application has been lodged by 31 May 2003, the date for incurring qualifying expenditure will be extended from 31 December 2004 to 31 July 2006.

Caoimhghín Ó Caoláin

Ceist:

122 Caoimhghín Ó Caoláin asked the Minister for Finance the cost to the Exchequer of the capital allowances for multi-storey car parks; if an analysis has been done as to the supposed benefit or otherwise of these allowances to the economy and society; and if he will make a statement on the matter. [5483/04]

Amharc ar fhreagra

Section 344 of the Taxes Consolidation Act 1997 provides for a scheme of capital allowances for the construction and refurbishment of certain multi-storey car parks where the relevant local authority certifies that it is satisfied that the car park has been developed in accordance with the criteria laid down by the Minister for the Environment, Heritage and Local Government. Included in the criteria which must be met is a provision that the car park must support the objective of making the core area of the urban centre in which the car park is located the focus for the centre's commercial and business activity. Furthermore, the planning and design of the multi-storey car park must take account of the nature and character of the area in which it is located and the provision of the car park must be supportive of the relevant local authority's traffic and parking management policies.

This scheme was introduced in 1995 to reinforce the primary importance of the inner core of urban areas. Faced with the increasing trend of retail centres to locate in peripheral areas with better road links and readily available parking areas, the provision of extra off-street car parking in urban centres for shoppers and other short-stay users was aimed at assisting in the regeneration of the inner cores of urban areas and making them more attractive places to visit and do business. At the time of the introduction of the scheme, the Dublin transportation initiative supported the need to encourage people to use the city centre through the provision of adequate short-term parking.

It is my view that the qualifying criteria laid down for this relief are sufficiently robust and comprehensive to ensure that the provision of qualifying multi-storey car parks is undertaken primarily to respond to increased local demands for additional parking and to support the objective of developing the core urban area. In addition, in common with all special tax incentives schemes, this relief is subject to a process of ongoing review. It was in the context of this ongoing review and in response to recommendations from the Department for the Environment, Heritage and Local Government and the Dublin Transport Office that I decided in the 1999 budget to terminate this relief with effect from 1 July 1999 in respect of projects in the Cork and Dublin metropolitan areas. Additionally, in advance of 2003 budget, I reviewed the position on all reliefs and, as a result of this, I announced a termination date of 31 December 2004 for this scheme and a number of other reliefs including the urban, rural and town renewal scheme, film relief, etc. However, arising from concerns expressed from a range of parties, including local authorities, that the deadline of 31 December 2004 was placing undue pressure on building resources, I felt that there was a strong case for allowing a longer winding down period for these schemes. This will allow for a more orderly completion of projects where delays had arisen for various reasons. To this end, I have made provisions in Finance Bill 2004 to extend the 31 December 2004 deadline for this relief to 31 July 2006.

Regarding exact details of the cost of the scheme, I am informed by the Revenue Commissioners that tax relief for multi-storey car parks are not at present captured in such a way as to provide a dedicated basis for compiling estimates of the total annual cost to the Exchequer. Claims for these reliefs are aggregated in tax returns with other claims, such as with industrial buildings allowances generally or with other capital allowances, and do not distinguish between the reliefs claimed in respect of the different schemes. Accordingly, the specific information is not readily available and could not be obtained without conducting a protracted examination of the Revenue Commissioners' records.

I consider it important that data be improved to facilitate assessments of such expenditures and reliefs. The Department of Finance has been working closely with the Revenue Commissioners to investigate information and data capture issues arising with a view to producing possible solutions. The challenge is twofold: the first is to identify the optimal manner of obtaining the information that is required to monitor and cost existing reliefs and the second is to obtain such information with due regard to not overburdening compliant taxpayers. Bearing this in mind the Revenue Commissioners will be introducing a number of changes to the forms relating to the annual return of income in respect of the tax year 2004. These changes will yield additional information regarding the cost of various tax reliefs, including the relief for multi-storey car parks.

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