Custom House Docks tax concessions
Desmond sought the estimated Exchequer cost of tax concessions for the Custom House Docks development and challenged the circumstances in which they were granted. MacSharry said the tax foregone could not yet be estimated, defended the capital-allowance treatment as provided for under the 1986 Act and argued the concessions would support job creation; the exchange ended without a cost estimate.
asked the Minister for Finance the estimated net cost to the Exchequer of the tax and other financial concessions in relation to the contract provisions signed by the parties to the development of the Custom House Docks site, Dublin 1; and if he will make a statement on the matter.
Comment on this
In relation to the contract for the development of the Custom House Docks area, the development consortium and the Custom House Docks Development Authority sought an assurance that no restrictions would be placed administratively or otherwise upon the capacity of the owners of the buildings to be provided in the area to claim capital allowances on the buildings in question under section 42 of the Finance Act, 1986. This assurance was given by me and is reflected in the proposed changes in the corporation tax code announced in my Budget Statement of 27 January last, specifically as regards group relief. It is not possible at this early stage in the development of the Custom House Docks area to estimate the cost in terms of tax foregone of the concession given, but I am satisfied that it was necessary in order to ensure the success of this very worthwhile development.
Comment on this
Would the Minister agree that within his Department the gravest reservation was raised in relation to what can only be described as the last minute blackmail on the part of the developers to get that concession out of the Minister in respect of their future CPT liability and that the granting of that and, in particular, the interbank arrangements which surrounded the deal are a matter of serious public concern? Would the Minister agree that his Department held out to the last until the Taoiseach told him to sign up before the budget?
Comment on this
——and I suggest he has not either because what he is talking about was brought in under an Act in 1986 when he was in Government.
Comment on this
I said in the budget — and this is explained in the explanatory statement to the budget — that group relief would be curtailed by providing that losses, including losses as a result of capital allowances arising in activities which are qualifying activities for the 10 per cent rate of tax, would be eligible for relief only against profits from other such qualifying activities. This change will apply in respect of accounting periods beginning after 31 December 1988.
Comment on this
The exception from this provision will be made for capital allowances given under section 42 of the Finance Act, 1986, concessions which the Deputy gave these people while he was in Government so I do not know what he is talking about.
Comment on this
May I ask the Minister the net cost to the Exchequer estimated by his Department of that capital allowance in relation to that development which was estimated to be £200 million?
Comment on this
Obviously the Deputy was not listening to my reply because I said it is not possible as yet to estimate the tax foregone.
Comment on this
The Deputy is not letting me reply. I should like to say quite clearly that this change and the concessions generally given by his Administration for the development on the Dublin Custom House Docks site is well worthwhile in the context of the tens of thousands of jobs that are going to be created.
Comment on this
This was something that Deputy Desmond's party tried to do and I am disappointed that the Deputy is criticising their good work.
Comment on this
Deputy Desmond, resume your seat. I am seeking to dispose of the remaining questions and Deputy Desmond continues to interrupt even the Chair.