Consultants to examine tax incentives

THE Department of Finance has appointed two consulting firms to carry out a review of tax incentive schemes.

In the last budget, Brian Cowen announced the department would be looking into the various tax relief and incentives schemes following criticism that wealthy individuals and industries abuse the system.

Mr Cowen said the various tax relief schemes cost some e8 billion, but while much of this was of benefit to ordinary people, €200 million was in the form of tax breaks to promote industries. The minister said he would be reviewing these tax incentive schemes to see if they were still necessary.

Mr Cowen said among the schemes up for review are: area-based urban renewal, town renewal, rural renewal and the living-over-the-shop schemes. Goodbody Economic Consultants have been appointed to report on these relief schemes.

Indecon Consultants have been appointed to review property tax incentives. These include multi-story carparks, park and ride facilities, student accommodation, third-level buildings, hotels, holiday cottages, nursing homes, private hospitals, sports injuries clinics, childcare facilities and refurbishment of rented residential accommodation.

The department said the two reviews will be completed before the end of September, allowing time for any changes to the tax systems to be prepared for December’s budget.

The review will not look at the earnings and tax exemptions of the stallion industry, which had been called for by opposition parties.

A report, by Indecon for Horse Racing Ireland last July, put the loss to the taxpayer of exempting stallion fees from taxation at €3 million a year.