Patrick O'Donovan (Limerick, Fine Gael)
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Question 148: To ask the Minister for Finance the expected change to persons tax reliefs for service charges; if he will provide details of the expected annual saving of the change; and if he will make a statement on the matter. [3670/12]

Michael Noonan (Limerick City, Fine Gael)
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I am informed by the Revenue Commissioners that, up to the tax year 2011, income tax relief is available for individuals who pay service charges to local authorities and other independent contractors. Qualifying charges include all service charges paid to:

Ø local authorities for the provision of domestic water supply, domestic refuse collection or disposal, or domestic sewage disposal;

Ø group water schemes for domestic water supply; and

Ø independent contractors for domestic refuse collection or disposal.

The relief is given at the standard rate of tax (20%) for any qualifying service charges paid in full and on time in the previous calendar year. The maximum annual amount of qualifying service charges in respect of which tax relief may be claimed is €400. For example, for services charges paid in respect of the years 2007 to 2010, the tax relief is given in the tax years 2008 to 2011 is the lesser of -

(a) the amount of services charges paid in the previous tax year @ 20%; or

(b) €400 @ 20%.

This relief was abolished by Section 12 of the Finance Act 2010. The final year for which the relief may be claimed is the 2011 tax year of assessment as respects service charges paid in 2010.

I am further informed by the Revenue Commissioners that the most recent year for which the necessary detailed information is available regarding tax relief for service charges is the income tax year 2009, in which the cost to the Exchequer is estimated at approximately €26.8 million. On this basis, the full year yield to the Exchequer of abolishing tax relief for service charges would be of the same order.