Eoghan Murphy (Dublin South East, Fine Gael)
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134. To ask the Minister for Finance the reason a self-employed person pays more income tax than a PAYE earner when the Government is trying to incentivise entrepreneurial activity. [46000/13]

Michael Noonan (Limerick City, Fine Gael)
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For the purpose of this reply, it is assumed that the Deputy is referring to entitlement to the PAYE tax credit. On that basis, the position is that the PAYE allowance, as it was then, was introduced in 1980 to improve the tax progression of PAYE taxpayers and to take account of the fact that the self-employed generally then had the advantage of paying tax on a preceding year basis. The argument was also made at the time that the general scheme of allowances for expenses discriminated against employees and in favour of other taxpayers. There have been some changes since 1980. For example, the self-employed now pay tax on a current year basis. In addition, the PAYE allowance has become a tax credit. However, significant timing benefits remain, depending on the accounting period used by the taxpayer. In addition, the expenses regime remains somewhat more liberal than that afforded to employees and therefore the self-employed can actually pay less tax when compared to a PAYE worker on the same income.

Not withstanding the above, to extend the PAYE tax credit to the self-employed would also be extremely costly to achieve. However, as the Deputy is aware, I did announce in my Budget Speech a package of 25 measures costing over €500m to promote jobs and growth. I believe that these measures will assist new business and small business and provide support for employers in almost every sector.

Eoghan Murphy (Dublin South East, Fine Gael)
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135. To ask the Minister for Finance if he is considering making a distinction in the capital gains tax regime to incentivise entrepreneurial activity by way of returns to investors versus returns from investment in non-productive speculative activity. [46001/13]

Eoghan Murphy (Dublin South East, Fine Gael)
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137. To ask the Minister for Finance the way planned changes to the capital gains tax regime for 2014 in terms of entrepreneurial relief are to be monitored over the course of 2014 in terms of their effectiveness. [46003/13]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 135 and 137 together.

The CGT entrepreneurial relief provided for by Finance (No 2) Bill 2013 will apply to active entrepreneurs who invest in new businesses, engaged in relevant trading activities (as defined), carried on by them personally or through qualifying companies controlled by them in which they are full-time working directors. The relief is intended to apply to productive enterprises that will generate employment and will not therefore apply to passive investors or to investments in passive activities.

The benefit of the proposed entrepreneur relief will arise on the ultimate disposal by qualifying entrepreneurs of the chargeable business assets in which they invest. These chargeable business assets must be held for a minimum of three years and the other applicable conditions must be satisfied to qualify for relief.

Taxpayers are required to include in their tax returns details of chargeable assets acquired each year. However, it will only be on a future disposal that entitlement to the relief can be determined. Accordingly, it will be 2017 at the earliest, before any tax relief under this provision will arise. From 2017, the relief may be claimed by qualifying entrepreneurs in their tax returns. These returns will require appropriate details in relation to the relief so that statistical information will be available to establish the extent to which the relief is availed of.

Eoghan Murphy (Dublin South East, Fine Gael)
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136. To ask the Minister for Finance his views on whether that the EIIS is too complicated and if he will provide an update on the changes that are planned to improve take-up of this scheme in 2014 and the way their effectiveness is to be measured throughout the year. [46002/13]

Michael Noonan (Limerick City, Fine Gael)
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The Employment and Investment Incentive (EII) is a tax incentive which provides income tax relief for investment in certain corporate trades. Relief is initially available to an individual at 30%, with a further 11% tax relief available where it has been proven that employment levels have increased at the company at the end of the holding period. The EII commenced on 25 November 2011. Prior to this the Business Expansion Scheme (BES) was in operation. As part of Budget 2013 I announced a 10 point tax reform plan to help small business. One of the measures in this plan was the extension of the EII from its current expiration date of the end of 2013 to the end of 2020 in order to provide certainty to investors and companies.

In addition to the extension of the scheme, I also announced the inclusion of hotels, guest houses and self-catering accommodation in the EII, subject to certain conditions.

In the recent Budget I also announced that the EII will be removed from the high earners' restriction for a period of three years in the hope that it will stimulate further investment in SMEs.

I do not consider the scheme to be too complicated. When the EII was introduced in 2011, it greatly simplified the application process when compared to the process that had been in place under the BES.

Eoghan Murphy (Dublin South East, Fine Gael)
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138. To ask the Minister for Finance if he has considered adapting the EIIS to make it more competitive similar to the EIS scheme in the UK. [46004/13]

Michael Noonan (Limerick City, Fine Gael)
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According to the UK Revenue website, the UK Enterprise Investment Scheme (EIS) provides 30% relief for investment in qualifying companies where shares are held for a minimum of three years. The Employment and Investment Incentive (EII) is broadly similar to the EIS. However, the level of tax relief available is more generous than the UK scheme.

The EII provides tax relief of 30% on investments made in small and certain medium-sized enterprises, including early stage enterprises, with the possibility of a further 11% tax relief at the end of the three year holding period. This additional 11% relief is not subject to the high earners' restriction.

In addition, as part of the recent Budget, I announced that the initial 30% relief will be removed from the high earners' restriction for a period of three years in order to encourage further investment in SMEs.

The incentive was previously known as the Business Expansion Scheme and was significantly amended in 2011 to target limited Exchequer resources towards job creation. As part of these changes, access to the incentive was made available to the majority of small and medium-sized companies.