Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 571 and 572 together.

The Taxsaver scheme is provided for in section 118(5A) of the Taxes Consolidation Act 1997 (TCA). The scheme provides an exemption from benefit-in-kind (BIK) where an employer purchases a travel pass for one of their employees or directors, subject to certain conditionality. Under section 118B TCA, an employer and employee may also enter into a Revenue-approved salary sacrifice arrangement under which the employee agrees to sacrifice part of his or her salary in exchange for the benefit.

Where a travel pass is purchased under the BIK scheme or through a salary sacrifice arrangement certain conditions must be met, for example:

• the cost incurred must relate to a monthly or annual bus, railway or ferry travel pass;
• the travel pass must be issued by or on behalf of one or more approved transport providers; and
• the approved transport provider must be contracted or licensed to provide the transport services covered by the travel pass.

Proposals in respect of tax expenditure measures are assessed in accordance with my Department's Tax Expenditure Guidelines. It is important to note that Government policy is based on the principle that tax expenditures should be used in limited circumstances where a demonstrable market failure exists, and the measure is more efficient than a direct expenditure intervention. In its comprehensive review of the Irish tax system, the Commission on Taxation and Welfare (2022) supported this position.

In considering proposals in respect of tax expenditures, the Government must be mindful of the public finances and the many demands on the Exchequer. Tax reliefs, no matter how worthwhile in themselves, lead to a narrowing of the tax base and a strong and convincing case for the benefits and outcomes needs to be articulated in order for due consideration to be given for the commitment of scarce taxpayer resources for such reliefs. The expansion of any tax expenditure creates a cost, and that cost must be recovered elsewhere.

As the Deputy will appreciate, amendment of a tax expenditure would normally be considered in the context of the annual Budget and Finance Bill process. It is a longstanding practice of the Minister for Finance not to comment in advance of the Budget on any tax matters which might be the subject of Budget decisions.

However, I would like to acknowledge that commuting employees may also have access to another relief from BIK in respect of sustainable transport, namely the Cycle to Work scheme under section 118(5G) TCA. That scheme offers an exemption from BIK where an employer purchases a bicycle and/or associated safety equipment for one of their employees (or directors) to use, in whole or in part, to travel to work. Associated safety equipment may include items such as helmets, lights, bells, mirrors and locks. Further information on the Cycle to Work scheme is available on the Revenue website at: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-01-01g.pdf