Written Answers. - Tax Expenditure.

Tuesday, 28 February 1995

Dáil Éireann Debate
Vol. 449 No. 7

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[1770]

  78.  Kathleen Lynch  Information on Kathleen Lynch  Zoom on Kathleen Lynch   asked the Minister for Finance  Information on Ruairí Quinn  Zoom on Ruairí Quinn   if he will give information on tax expenditure in the years 1993 and 1994 relating to payments made under section 439 (1) (II) of the Income Tax Act, 1967 to universities or colleges; the amount of expenditure relating to third level colleges; the number of funds set up to receive covenanted payments from this section; the number of funds set up to receive covenanted payments that relate to third level colleges and universities; the number of funds set up to receive covenanted payments that relate to second level schools; the number of funds set up to receive covenanted payments that relate to the primary sector; the payments made under section 439 to persons other than the direct descendants of the disponer; the payments made under section 439 to children and others subject to the 5 per cent limit of disponer's income; and the payments made under section 439 to organisations for human rights as amended by section 15 of the Finance Act, 1975. [4476/95]

Minister for Finance (Mr. Quinn): Information on Ruairí Quinn  Zoom on Ruairí Quinn  I am informed by the Revenue Commissioners that statistics are not available which would enable the precise information requested by the Deputy to be given. Such information either could not be obtained, or could not be obtained without undertaking inquiries which could be carried out only at a disproportionate cost.

The relevant information available on the cost to the Exchequer of the tax relief for covenanted dispositions of income by individuals and companies, excluding maintenance arrangements between separated spouses, and the numbers of claimants in respect of the income tax years 1993-94 and 1994-95 is estimated as follows:

Individuals Companies Total
Cost Numbers Cost Numbers Cost Numbers
£m £m £m
1939-94 33.7 36,000 1.2 60 34.9 36,060
1994-95 36.8 37,000 1.1 60 37.9 37,070

The cost figures attributed to companies are in respect of covenants in favour of universities and colleges for the purpose of research and the teaching of the natural sciences. Any costs attributable to individuals for the same purpose are included in the overall totals given for that category and cannot be distinguished.

The other data sought by the Deputy, in so far as it is available, is based on the results of a special survey carried out by the Revenue Commissioners in 1994. The main purpose of the survey was to provide an estimate of the number and cost to the Exchequer of covenants in favour of persons in third level education.It was based on a 1 per cent random sample of all cases on file.

Information on covenants other than those in favour or persons in third level education also became available as a result of the survey. However, since the information in respect of covenants retained on the Revenue files is, in general, confined to that which is necessary [1771] to administer the relief, the precise data requested by the Deputy is not available.

Following is the relevant information available on covenants by individuals based on the results of the survey: covenants from parents and grand-parents to children, which are limited to a maximum of 5 per cent of the covenator's income, make up to 60 per cent of the total of 37,000 covenants and nearly 53 per cent of the total cost of £37 million for covenants in 1994-95; covenants from other relatives make up 22 per cent of the total number of covenants and 34 per cent of the total cost; other covenants make up to 18 per cent of the total number of covenants and 13 per cent of the total cost; covenants to persons in third level education (whether from parents or from other covenantors) make up to 69 per cent of the total number of covenants and 64 per cent of the total cost.

In overall figures of costs and numbers supplied, it is not possible to identify the amounts related to the tax relief provided under section 15 of the Finance Act, 1973, for covenants in favour of certain human rights organisations recognised by the UN.


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