Terence Flanagan (Dublin North East, Fine Gael)
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Question 106: To ask the Minister for Finance if he will deal with a matter (details supplied) regarding VAT for public service vehicles; and if he will make a statement on the matter. [45562/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am advised by the Revenue Commissioners that the transport of passengers and their accompanying baggage is exempt from VAT under Paragraph 14(3) of Schedule 1 to the Value-Added Tax Consolidation Act 2010. Accordingly, the provision of a taxi service is exempt from VAT.

The provider of a service that is exempt from VAT does not charge VAT on the service and is not entitled to deduct, or claim a refund of, any VAT incurred on goods and services used for the purposes of the exempt supplies. Thus, a person who provides a taxi service does not register for VAT and cannot recover VAT incurred on any goods and services, including a motor vehicle, used for the purposes of the person's taxi business. I would add that, in any event, Section 60(2)(a)(iv) of the Value-Added Tax Consolidation Act 2010 provides that, in general, a taxable person has no entitlement to deduct VAT incurred on the acquisition of a passenger motor vehicle, except where it is acquired as stock-in-trade or for use in a vehicle hire or driving school business.

Michael McGrath (Cork South Central, Fianna Fail)
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Question 107: To ask the Minister for Finance the estimated cost to the Exchequer of the tax relief on approved share options schemes in 2010 and the reasons he plans to abolish the relief. [45573/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Approved Share Option Scheme was introduced in 2001 and is provided for in Chapter 4, Part 17 and Schedule 12C of the Taxes Consolidation Act, 1997. It is estimated that the scheme cost €0.5 million in 2009, the most recent year for which statistics are available. Abolition of the scheme was recommended by the Commission on Taxation in its recent report. The Commission indicated that the decisions taken by many employers to use unapproved schemes instead of the approved scheme, demonstrated that the scheme was not needed.