Wednesday, 7 December 2005
Dáil Eireann Debate
Minister for Finance (Mr. Cowen): I announced in my Budget Statement in December 2004 that my Department and the Office of the Revenue Commissioners would undertake a detailed review of certain tax incentive schemes and tax exemptions in 2005. Certain schemes have been reviewed by two external consultancy firms and the tax incentives for private hospitals was one of the schemes reviewed.
As regards estimates of tax forgone under the schemes, I refer the Deputy to my reply to his Question No. 380 of 18 October 2005 on this matter. The outcome of the consultants review will be dealt with in the budget.
153. Caoimhghín Ó Caoláin asked the Minister for Finance the qualification criteria, including public health and assessment of need on a local and regional basis, which are applied in relation to the tax reliefs for the developers of private hospitals. [38464/05]
Minister for Finance (Mr. Cowen): A private hospital has to meet certain conditions before it can be regarded as a qualifying building and these conditions are set out in section 268(2A) TCA 1997. Conditions include that, the hospital must have the capacity to afford medical or surgical services all year round, provide a minimum of 70 inpatient beds, outpatient services, operating theatres and on-site diagnostic and therapeutic services and have facilities to provide at least five specialist services, ranging from accident and emergency to oncology and cardiology, etc. Section 24 of the Finance Act 2003 extended this relief to private hospitals providing acute services on a day care basis with accommodation for such services of not less than 40 beds. The Health Service Executive, in consultation with the Minister for Health and Children and with the consent of the Minister for Finance, is required to certify annually during the period in which the tax relief is being claimed that the hospital has complied with these conditions.
154. Caoimhghín Ó Caoláin asked the Minister for Finance the number and locations of hospitals constructed, under construction and at the planning stage which have qualified for the tax relief for developers of private hospitals. [38466/05]
Minister for Finance (Mr. Cowen): Claims for tax relief on private hospitals are generally aggregated in tax returns with other claims and do not distinguish at present between the reliefs claimed in respect of different schemes. Provisions were included in the Finance Act 2004 to get much of this data separately in future. The preliminary data should become available from early 2006 following the returns of income filed in October-November 2005.
The Galway Medical Clinic private hospital has been certified by the Health Service Executive, in consultation with the Minister for Health and Children in accordance with the legislation as set out in section 268(2A) TCA 1997.
155. Mr. Perry asked the Minister for Finance if his attention has been drawn to the fact that VAT at 13.5% on an ESB bill of €108.58 adds an extra €14.66 levy on to the bill for an old age pensioner; his plans to exempt VAT charged on ESB bills to old aged pensioners; and if he will make a statement on the matter. [38471/05]
Minister for Finance (Mr. Cowen): The position is that the rate of VAT that applies to a particular good or service is determined by the nature of the good or service, and not by the status of the customer. The VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. There is no provision in European VAT law that would allow the application of an exemption from VAT for supplies of electricity to old age pensioners.
However, under the social welfare code, the household benefits package, which comprises the electricity-gas allowance, telephone allowance and free lifetime television licence is available to people living permanently in the State. People aged over 70 years of age can qualify regardless of their income or household composition. The package is also available to carers. Customers under the age of 70 who are in receipt of a qualifying payment and live alone or only with certain categories of people may also have an entitlement to the package. For those customers aged between 66 and 69 years and who are not in receipt of a qualifying payment, a means test must be satisfied to determine eligibility for the package.
The electricity allowance covers the normal standing charge and up to 1,800 units of electricity each year. At current prices, the value of the electricity allowance to the consumer is approximately €339 per annum for urban dwellers, and €381 for rural dwellers, inclusive of VAT at 13.5%. An electricity — group account — allowance may be paid if a customer lives in self-contained accommodation and operates an electricity slot meter or where the registered consumer of electricity is the landlord. Payment is made by way of 12 vouchers at an annual value of €360, inclusive of VAT at 13.5%.
Alternatively, if the natural gas allowance option is selected, the customer is entitled to the supply charge and up to 1,674 kw/h of gas per year. The annual value of this is up to €313 per annum, inclusive of VAT at 13.5%. If the person’s home is not connected to an electricity or natural gas supply, the person is entitled to 15 cylinders of bottled gas per annum at an annual value of approximately €320, inclusive of VAT at 13.5%.
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