Mary Hanafin (Dún Laoghaire, Fianna Fail)

I move amendment No. 18:

In page 36, between lines 17 and 18, to insert the following:

26.—(1) Section 372AW of the Principal Act is amended—

(a) in subsection (1) in the definition of "qualifying period" by substituting "31 May 2015" for "31 May 2013", and

(b) in subsection (2)(b) by substituting "4 years" for "2 years".

(2) Subsection (1) comes into operation on the making of an order to that effect by the Minister for Finance.".

This new section makes changes to the scheme of capital allowances in respect of expenditure incurred in the construction or refurbishment of tourism facilities in the mid-Shannon area. The scheme commenced on 1 June 2008 and was time limited. Under the existing legislation governing the scheme, projects wishing to avail of relief must apply for approval in principle by 31 May 2010 in advance of expenditure being incurred. If approved, the qualifying expenditure must then be incurred by 31 May 2013.

I have been advised by the Department of Arts, Sport and Tourism, the Mid Shannon Tourism Infrastructure Board and Fáilte Ireland that there are a number of significant and worthwhile projects in the pipeline that have not yet been submitted formally to the board for approval. These projects are unlikely to proceed without an extension to the existing deadline for the submission of projects. To facilitate these projects, the Minister for Finance is making two changes to section 372AW of the Taxes Consolidation Act 1997. First, he is to extend the period during which applications for approval in principle can be made from two years to four years. The latest date for the submission of such applications will be 31 May 2012. Second, to cater for any projects that may avail of this new date for the submission of applications for approval in principle, the Minister is extending the period within which qualifying expenditure must be incurred by two years. This period will now end on 31 May 2015. These extensions will have to be notified to the EU Commission in the context of State aid and will, therefore, not come into operation until the necessary approval is received to make the commencement order.

I do not expect that the further two-year extension of the project approval deadline will have significant short-term Exchequer implications due to the long lead-in period for the projects concerned. Any longer-term Exchequer cost will be balanced by the benefits of additional tourism infrastructure in the area, increases in both short-term construction employment and longer-term employment in the facilities following completion. On balance, notwithstanding the current Exchequer difficulties, there is a good case for extending the approval deadline. I commend the amendment to the House.

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