Trevor Sargent (Dublin North, Green Party)

Ba mhaith liom buíochas a ghabháil leis an Seanadóir as an cheist thábhachtach seo a ardú. Tá brón orm nach bhfuil an tAire Airgeadais i láthair, ach gan amhras beidh áthas air go bhfuil an Seanadóir ag plé le cursaí Uíbh Fháille, chomh maith le contaethe eile.

The mid-Shannon corridor tourism infrastructure investment scheme is a tax incentive scheme aimed at encouraging the development of tourism infrastructure in the mid-Shannon area. Legislative provision for the scheme was made in this year's Finance Act. A scheme of this kind has been under consideration for some time. In the lead-up to the 2006 budget, a submission proposing a scheme like this was received from Shannon Development. This was the subject of an ex ante evaluation by Goodbody Economic Consultants last year. This review was followed by the completion of Fáilte Ireland's tourism product development strategy 2007 to 2013, the new marine leisure and tourism strategy and the recent report by the European Travel Council on tourism trends for Europe in September 2006. In addition, in the lead-up to this year's budget, a follow-up proposal was received from the Department of Arts, Sport and Tourism.

Given the contents of these reports, the Minister for Arts, Sport and Tourism is of the view that Ireland's inner core appears to be relatively underdeveloped from the point of tourism but does have sound potential. He believes this view is supported by changes in Ireland's demography and transport infrastructure, together with emerging trends in European and global tourism. The Minister for Arts, Sport and Tourism believes tourist numbers can materialise if facilities and products are put in place, that provide a competitive advantage or compelling reason for visiting and remaining in the mid-Shannon corridor region, while complying with high environmental standards.

The designated areas involved in the scheme are in a corridor of about 12 km on either side of the river stretching from the bottom of Lough Derg to Lough Ree. The scheme is time-limited to three years, within which qualifying capital expenditure may be incurred. Projects wishing to avail of relief must get approval in advance, for which an application must be made within one year of the commencement of the scheme, and also must get formal certification after completion. This approval and certification will be given by a special board established for the purposes of the scheme and will be carried out in accordance with guidelines to be issued by the Minister for Arts, Sport and Tourism in consultation with the Department of Finance.

The nature of the tourism infrastructure buildings and structures which may qualify under the scheme will also be set out in these guidelines. It is proposed the scheme should be concentrated on non-accommodation tourist infrastructure and facilities of a capital nature such as marinas and mooring-docking and similar facilities, leisure centres, sport facilities such as equestrian centres, adventure sport facilities, sailing schools, sport facilities such as golf clubs — not the actual golf courses as no capital allowance applies to land — eco-tourism facilities, education and cultural tourism facilities including interpretative centres, health farms and spas, heritage houses and gardens. These examples are not comprehensive.

Certain buildings such as those that facilitate gaming or gambling are specifically excluded from the scheme, as are licensed premises but not restaurants. Tourism facilities that already qualify for capital allowances such as hotels, guesthouses and holiday hostels are also excluded. However, other accommodation facilities that are provided as part of a qualifying tourism project may qualify for relief but expenditure on such accommodation facilities cannot be more than 50% of the overall expenditure on the project or cannot be more than the expenditure on the non-accommodation facilities in the project.

Relief will be available over seven years for qualifying construction and refurbishment expenditure incurred in the qualifying period at the rate of 15% per annum in years one to six and at the rate of 10% in year seven. In the case of refurbishment, the qualifying expenditure must exceed 20% of the market value of the property before work commences. In order to comply with the relevant state aid rules, in areas which are not in the BMW region, only 80% of the construction and refurbishment expenditure will qualify for relief.

There will be a 15-year holding period to avoid a clawback of allowances given. Existing restrictions on the sideways set-off of excess capital allowances against non-rental income for passive investors will apply as will the restriction on the use of specified reliefs by high-income individuals which is effective from 1 January 2007.

The scheme will be commenced by way of ministerial order. However, this will not be done until after the relevant guidelines have been drawn up and agreed, the scheme has been approved by the European Commission and the certification board has been established.

The development of the guidelines has been the subject of ongoing consultations between the Departments of Arts, Sport and Tourism and Finance. These guidelines and accompanying application forms are now at an advanced stage and will be completed presently. Indications are that EU Commission approval will follow on foot of notification of the scheme with the completed guidelines.