Richard Bruton (Dublin North Central, Fine Gael)
Link to this: Individually | In context

Question 176: To ask the Minister for Finance if he will allow businesses to claim a deduction of VAT in respect of payments made on the leasing of private passenger cars which are used primarily for business proposes; and if he will make a statement on the matter. [40123/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

Since the introduction of VAT in 1972, Ireland has operated a block on VAT deductibility thereby not allowing businesses recover VAT incurred on cars, petrol, meals, hotel accommodation (except when associated with a business conference) and entertainment expenses. The block was introduced to limit revenue loss and tax avoidance. The cost to the Exchequer of removing this block would be significant.

In addition, removing the block on leasing while maintaining a block on the purchasing of business cars would not be feasible as it would introduce distortion of competition whereby leasing companies would enjoy a significant advantage over companies selling cars to the business community. Concerns also arise in controlling the measure given the potential for abuse.

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

Question 177: To ask the Minister for Finance, further to Parliamentary Question No. 188 of 5 November 2008, the level of increase in the capital gains tax rate at which he would consider that there would be an inverse relationship between an increasing rate and an increasing yield; his views on increasing the CGT rate by more than 2% in budget 2009; and if he will make a statement on the matter. [40125/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

The point at which an increase in Capital Gains Tax could cause an inverse relationship between an increasing rate and an increasing yield, is a matter of judgment. The judgment would have to have regard to issues such as the prevailing economic and market conditions and so on. I do not propose to make speculate on the matter. As regards increasing the CGT rate by more than 2%, I have no plans to increase the rate further, at this time.