Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I do not propose to accept this amendment. The only relief that I am removing from the current scope of the high earners' restriction is the employment and investment incentive, as I announced on budget night. There is no need, therefore, for a review at this stage.

The employment and investment incentive provides tax relief for investments in small and medium size enterprises, SMEs, in recognition that such investments are risky. Tax relief of 30% is provided initially, with a further 11% payable at the end of the holding period provided that the numbers employed have increased or the funds have been expended on research and development. The additional 11% was never subject to the restriction.

This amendment temporarily removes the initial 30% relief for a period of three years. After that time it will be examined to see if it has achieved the desired effect of increasing investments in Irish SMEs and the subsequent job creation that would follow.

Section 16 also provides for the inclusion of capital allowances on plant and machinery where those allowances are being claimed by passive investors. If section 16 were to be deleted, the potential for individuals to shelter income by investing in plant and machinery would remain. The only thing I am removing from the scope of the high earners' restriction is the employment and investment incentive, which I announced in the budget.

We will review it after three years to ascertain how it is working, which I believe meets the principle of the Deputy's amendment.