Tuesday, 20 May 1986
Dáil Eireann Debate
Mr. Keating: asked the Minister for Finance if he has had an opportunity to consider the submission of the Marketing Institute of Ireland relating to the capital cost and running expenses of salespersons' cars; whether he considers their submission that the tax treatment of company cars has become a major additional cost and restriction on the employment of professional sales personnel to be correct; and if he will institute a change in this respect, in the light of the facts of the case.
As the Deputy will know, section 50 of the Finance Bill increases the restriction on capital allowances for business cars and the pro rata restriction on the running expenses of such cars from £3,500 to £4,000. This is the first time since 1976 that these restrictions have been increased.
I accept that the increase is a modest  one, but I took the opportunity of explaining why it is not possible to improve upon it when I spoke in this House at the commencement of the Second Stage of the Finance Bill on 15 April 1986. I stated then:
“The cost to the Exchequer in raising the restriction to a level consistent with present prices for appropriate cars would be quite prohibitive and is out of the question at this time. It would also be inequitable since it is clear that many of those who have business cars enjoy a considerable advantage over other taxpayers who must meet all their motoring expenses out of after tax income. This is due to the fact that the private benefit derived from the business car is subject to less income tax than monetary income. In these circumstances, it would not be fair to ask these other taxpayers — and, indeed, taxpayers who cannot afford to run a car at all — to bear the cost of a substantial increase in the restriction.”
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