Joan Burton (Dublin West, Labour)
Link to this: Individually | In context

Question 43: To ask the Minister for Finance if his Department has concluded its consideration of the letter from the Commission Directorate General for Agriculture and Rural Development advising that it had come to a preliminary opinion that the stallion tax exemption scheme would seem to constitute an aid that was not compatible with the Common Market; if a reply has been submitted; if an extension of the one month deadline for reply has been agreed by the Commission; the details of the amount he has submitted to the Commission of the estimate for 2003 of the stallion income exempted by the scheme; and if he will make a statement on the matter. [7147/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

The Irish authorities have yet to conclude their consideration of the letter of 6 January 2005 from the Commission Directorate General for Agriculture and Rural Development and a reply to the Commission's letter has not yet issued. Officials from my Department and the Department of Agriculture and Food met with Commission officials on 23 February 2005. At this meeting, the Commission agreed to extend the deadline to respond to the end of March.

In relation to the cost of the exemption, in the Commission's letter of 20 April 2004, the Commission sought, inter alia, information on the amounts concerned. If no detailed official statistics can be provided, then the Irish authorities are requested to give best estimates on statistics on the number of holdings concerned, the number of stallion nominations performed, the relevant tax brackets, and the regular price paid for such nominations.

In response, the Commission was informed by the Irish authorities that, as the measure represented exempt income, there has been no requirement in the past on those claiming the exemption to supply any information to the Revenue Commissioners of details of the amount of income involved. Therefore, the information requested on the cost was not available.

The Commission was also informed that this position changed with the introduction through section 33 of the 2003 Finance Act of an amendment to section 231 of the Taxes Consolidation Act 1997 which provided that the profits, gains or losses arising in this regard must be included in the annual return of income for the taxpayer even though the income or gains are exempt from tax. This requirement applies in respect of chargeable periods commencing on or after 1 January 2004. The Commission was also informed that this information, which will not be available in full until early 2006, will enable more reliable information to be determined as to the cost or otherwise to the Irish Exchequer of the exemption. Other statistical estimates as requested by the Commission in relation to numbers of stallions, numbers of stallion farms, nominations and fee ranges were obtained from industry sources and were provided to the Commission in addition to the tax rates applicable. However, this could not give the cost of the exemption as this can only be obtained on the basis of the individual returns for each taxpayer claiming the exemption.

Subsequently, a copy of the report by Indecon International Economic Consultants, Assessment of the Economic Contribution of the Thoroughbred Breeding and Horse Racing Industry in Ireland, was sent to the Commission at end September 2004. As has been widely reported, that report contained an estimate that the Exchequer cost of the exemption was in the region of €3 million which was based on the consultants' own research and analysis. It was not an estimate prepared by the Irish authorities.

Dan Boyle (Cork South Central, Green Party)
Link to this: Individually | In context

Question 44: To ask the Minister for Finance the reason he opposed the initiative by his EU colleagues, including France, Germany, the Presidency and the Commission to introduce an aviation fuel tax to fund poverty relief in Sub-Saharan Africa. [7059/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

At the most recent meeting of EU Finance Ministers on 17 February, there was a lunchtime discussion about exploring the possibility of introducing a tax on aviation fuel or a levy on airline tickets for the purposes of raising revenue for development aid. Opinions differed on the wisdom of such an approach.

Following this discussion, the European Commission was asked to examine the pros and cons of possible approaches for the financing of development aid, including the suggestions referred to above. At that stage we will be in a position to better assess the impact of any such proposal from an Irish perspective.

I have not opposed any proposal as no detailed proposal has yet been made.