Irish Chamber Calls For Extension Of Tax Incentive Scheme

by Jason Gorringe, Tax-News.com, London

25 August 2005

The Chambers of Commerce of Ireland (CCI) has called for an extension to the deadline for the completion of tax incentivised property developments.

“When one considers that the application deadline was 31st December 2004, the current deadline of July 2006 is insufficient to allow most projects to be completed in a timely and proper fashion and within budget," remarked Hilary Haydon, Chair of CCI’s Ratepayers’ Council.

“An extension will also guard against further construction price inflation as the demand for construction to meet the current deadlines grows. Furthermore, with 14% of Ireland’s workforce employed in the construction sector, we need to ensure that employment in the sector does not tail-off unexpectedly,” he argued.

“Any extension should also have a finite timeframe so that such extensions cannot be exploited indefinitely,” he cautioned.

Regarding the question on whether tax designation should continue, Mr. Haydon said, “this status should only be restored for chosen sites within urban and rural areas that are agreed between the local authority, the Department of the Environment, Heritage and Local Government and the Department of Community, Rural and Gaeltacht Affairs as being strategic development sites.”

“This geographical restriction would ensure more balanced growth and avoid continued exploitation of incentives by already prosperous areas which do not need growth or physical improvement for social development reasons. This double-lock mechanism could also help to achieve targets of the National Spatial Strategy and ensure the success of development programmes such as RAPID2,” he concluded.

Mr. Haydon made his comments in a submission to Indecon, the body which is currently reviewing property related taxation incentives on behalf of the Department of Finance.

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