Joan Burton (Dublin West, Labour)
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Question 124: To ask the Minister for Finance his views on making charitable contributions to educational institutions tax deductible for the donor in order that the tax relief would accrue to the donor as opposed to the educational institution; and if he will make a statement on the matter. [16933/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Section 848A of the Taxes Consolidation Act 1997 allows tax relief on donations made by either individuals or corporate bodies to eligible charities and other approved bodies, including first and second level schools and third level institutions providing education based on a programme prescribed or approved by the Minister for Education and Science. The arrangements for allowing tax relief on donations varies depending on whether the donor is a PAYE taxpayer, or is subject to self-assessment, or is a company. In the case of a self-assessed donor, the individual taxpayer himself or herself claims the relief in respect of the charitable donation. Likewise, in the case of a company, the company claims a deduction for the donation as if it were a trading expense. However, in the case of a PAYE donor, the relief is given on a "grossed up" basis to the eligible charity (or approved body) and the claim for refunds is made by the charity and not by the PAYE donor. For example, a donation of €1,000 by a taxpayer on the higher rate results in a refund to the charity of €695. Thus the charity benefits in total to the extent of €1,695. The Commission on Taxation, as part of its remit, is reviewing all existing tax reliefs including reliefs in respect of donations to charities and other approved bodies. It is expected that the Commission will furnish its report to me at the end of July.