Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

Deputy Burton asked if we had done an economic appraisal of this beyond knowing what would be the potential revenue gain. We have not done such an appraisal because I decided we would be better off doing economic appraisals of the much larger decisions we had to make, for example, on the VAT rate applied to the tourism sector. I do not ask my Department to do detailed economic appraisals of every decision we make because of the use of resources involved and, in this case, the scale of the decision involved.

As to whether we engaged with the sector about this decision before it was made, we did not do so. As I informed the committee, this measure is part of a process I have undertaken where I asked my Department to examine reliefs that have been in place for a long time and tax changes made during the crash. I asked it to provide me with a list of these reliefs and changes and an assessment of the pros and cons of changing them. We looked at this measure as part of that process.

On the tourism impact, which is the point raised by Deputy McGrath, I would hazard a guess that the cost was not shared with him when people came to him seeking a change in this policy decision. Approximately half of the cost of between €10 million and €20 million relates to fleet cars and how fleets are leased, as opposed to tourism.

Half of it has to do with reliefs that we have in place for the leasing of fleets of cars to companies. We have to ask if between €10 million and €20 million of the State's money is best used for doing something like that. This was not a policy decision to stimulate the growth of the car rental and leasing sector. It was a decision made in the early 1990s when we were going from excise to VRT. Yes, there has been huge growth in the car rental sector since then, but I contend that the reason there has been huge growth and a huge decrease in the price of car rental across that period has been the massive growth in tourism and the rising incomes of people who have been visiting our country, as opposed to this change.

The view I am advocating to the committee and which I will advocate again on Report Stage is that while this may well have an effect on leasing arrangements that companies make and on the kinds of cars that are being offered to rent by car rental companies, and while it could have an effect on price, this is also a very competitive sector, so should it not be the case that we allow the private sector to work its way through those issues as opposed to maintaining a concession in our system that could have a price of up to €20 million to it? Over the next fortnight, before we go to Report Stage, I am happy to engage with members on the matter. The cost of this could be as high as €20 million. That figure has perhaps not been present in some of the lobbying or advocacy relating to this change over recent weeks. I note, in fairness to the committee, that nobody to date has advocated that this is a change that we should not make. I think what colleagues are emphasising is that we should perhaps look at the timing of it or do an analysis of it. My view is that this is a change that we should make, and we should make it in the way I have prescribed. As I have said, if colleagues want to make me aware of any more significant issues beyond those of which I am aware, I am happy to engage with people on those.