asked the Minister for Finance if he is aware that trustees of group water schemes are receiving demands for corporation tax from the Revenue Commissioners and that these committees are voluntary and non-profit making, providing a social service in rural areas; and if he will make a statement on the matter.

I am advised by the Revenue Commissioners that groups engaged solely in the provision of group water supply schemes are not liable to tax on these activities. Other income such as investment income — that is interest on balances held on deposit prior to completion of a water scheme and, after such completion, in respect of moneys required for maintenance purposes — is, however, chargeable to tax in the normal way. As an alternative to placing moneys on deposit with financial institutions, such groups might consider the possibility of investing temporary surplus funds in tax-free securities.

What is the position of trustees of group water schemes who have received from the Revenue Commissioners demands for thousands of pounds over a number of tax years? What are they to do? I appreciate what they may do in the future but, as of now, one scheme in particular in my constituency has a demand for £3,000 corporation tax. Could the Minister tell me what can be done there?

As I pointed out in my reply, if the income arises from the earnings of interest on moneys placed upon deposit pending completion of the scheme, income tax is due and chargeable on that income.