Simon Harris (Wicklow, Fine Gael)
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Section 118(5A) of the Taxes Consolidation Act 1997 (TCA) provides for an exemption from benefit-in-kind (BIK) where an employer purchases a travel pass for one of their employees or directors. This is commonly known as the TaxSaver scheme.

Under section 118B TCA, an employer and employee may also enter a salary sacrifice arrangement under which the employee agrees to sacrifice part of his or her salary, in exchange for a BIK, such as the aforementioned travel pass.

Where a travel pass is purchased either under the TaxSaver scheme or through a salary sacrifice arrangement, certain conditions must be met including:

• 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.

While the conditionality around the BIK exemption for the TaxSaver scheme falls under the remit of the Minister for Finance, I would ask the Deputy to note that the scope and conditions of the travel pass on offer are a matter for the individual transport providers. Furthermore, in respect of the day-to-day operations of public transport, including TaxSaver ticket offerings, it is the National Transport Authority that has responsibility for the regulation of fares charged to passengers in respect of public transport services provided under Public Service Obligation contracts.

In parallel, proposals in respect of all tax expenditure measures including the TaxSaver scheme, are assessed in accordance with my Department's Guidelines for Tax Expenditure Evaluation. 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 to amend any tax expenditures, the Government must be mindful of the public finances and the many demands on the Exchequer.