Tom Parlon (Laois-Offaly, Progressive Democrats)

This recommendation proposes to insert a new section into the Bill. The purpose of the new section is to provide that tax reliefs will lapse automatically five years after being enacted unless they are renewed. The recommendation also provides that before renewing any relief, the Minister for Finance would produce a report to both Houses that contains the numbers of people who have availed of every tax relief and the total cost of each relief to the Exchequer on a geographical breakdown by tax districts.

As the Minister for Finance announced in his Budget Statement, the Department and the Revenue Commissioners are to conduct a review of tax schemes. It is accepted that these reliefs, no matter how desirable, narrow the tax base and will have the effect of reducing the tax paid by high earners. However, until this review of tax incentives and exemptions is complete and the Government has considered the matter, it would be premature to make any comment on what steps may be taken to ensure the correct balance is struck between the benefit of tax incentives and the extent to which such incentives and exemptions are used by high earners to reduce their tax bills.

Likewise, it would be premature to consider whether or not mechanisms such as sunset clauses or automatic reviews would be appropriate. For this reason, I cannot accept the Senator's recommendation. The Revenue Commissioners publish an annual statistical report that includes in table IT 6 information on the cost of tax reliefs, copies of which are sent to the Oireachtas Library. The 2003 report for the first time gives a breakdown of the numbers availing of particular tax reliefs to the extent that such information is available to the Revenue Commissioners. This information is provided in respect of the 2001 short tax year. The breakdown will be extended to future years as additional information on the numbers involved becomes available to the Revenue Commissioners.

It would not be a good use of resources to create a statutory compulsion to have a case-by-case procurement of statistics on the numbers availing of reliefs and exemptions broken down by geographical area. The costs and resources expended in assembling this information would be disproportionate to the value of the information obtained. We must consider the appropriateness of the information to be gathered in various cases. As I outlined on 22 March, there are various reports under way to examine practically all of the exemptions and reliefs. These reports will be made available to the Department of Finance and the Minister in advance of the next budget.