Paul Connaughton
Ceist:27 Mr. Connaughton asked the Minister for Finance his views on the desirability of capping the aggregate value of special tax reliefs that can be claimed by a person. [18671/04]
Amharc ar fhreagraWednesday, 23 June 2004
Ceisteanna (44)
Freagraí scríofa
There is no cap on the aggregate value of such tax reliefs. In budget 1998 I announced, as and from 3 December 1997, that an annual cap of €31,750 would apply on the amount of capital allowances that an individual passive investor could claim against non-rental income on capital expenditure incurred on certain industrial buildings. Any unrelieved capital allowances can be carried forward for offset against the individual's rental income. Industrial buildings such as factories, docks and hotels are affected by the provision. Buildings under the area based schemes such the urban, rural and town renewal schemes and a range of other schemes such as multi-storey car parks and private hospitals are also affected.
There is a cap of €31,750 on the annual amount that can be claimed against income in general by investors under the business expansion scheme. There is also a cap of €31,750 on the maximum annual amount that can be claimed against income in general in respect of a qualifying film under the scheme of relief for investment in films. In the case of the latter scheme, this is further restricted as only 80% of total investment is eligible for relief under the scheme.
In my response to the Dáil debate on Second Stage of the 2004 Finance Bill I mentioned that the special reliefs provide undoubted economic and social benefits. They also narrow the tax base, have a cost and are inevitably used by high earners to reduce their tax bill. A judgment must be made on whether the advantages outweigh the disadvantages. Imposing an overall cap on the aggregate value of special tax reliefs, other than the caps already applying to them, that can be claimed by an individual could undermine the effectiveness of many incentive schemes in providing the economic and social benefits referred to above. I will keep the various tax reliefs under review in the context of annual budgets and Finance Bills.