Tom Parlon (Laois-Offaly, Progressive Democrats)

Reference was also made to the Government doing nothing with regard to capping relief on taxes. A major review of tax schemes was announced in the budget and this review will be completed in time for the inclusion of appropriate proposals in the 2006 budget. The review will evaluate the impact and operation of such schemes, including their economic and social benefits for the different locations and sectors involved in the wider community. In addition, the review will examine the degree to which these schemes allow high-income earners to reduce their tax liability.

External consultants will review certain tax incentive schemes and two consultancy studies are envisaged. One will examine area-based incentives, namely, urban, town and rural renewal and living over the shop schemes. The second study will examine other incentive schemes, namely, those covering multi-storey car parks, park and ride facilities, student accommodation, buildings in use for third level education purposes, hotels, holiday cottages, nursing homes, private hospitals, sports injury clinics, child care facilities and the countrywide refurbishment scheme.

In addition to the consultancy studies, a separate public consultation process was advertised on 8 January 2005 seeking submissions on measures that could be introduced to balance the benefit of such relief with the extent to which they are used by high earners to reduce their tax bill. The deadline for submissions is 31 March 2005. We are undertaking the review to determine what we can learn from past experience, what we do if we were starting again and whether we would look to bring about further change given the current level of economic development. This is important and Senator Leyden asked questions with regard to the issue of VAT recovery for tourists. These are areas which we must also examine.

Senator John Paul Phelan also raised the question of overpayments by PAYE taxpayers. He certainly was in a very negative mood today.