Budgetary incentives stalled by EU delays
A raft of major budgetary initiatives announced by Michael Noonan in the past two years have yet be implemented because of delays caused by the EU.
Several highly-anticipated measures introduced in the Finance Bills of 2013 and 2014 have been stalled for months and years by an EU approvals process, the Finance Minister has admitted. This includes the much-hyped Living City Initiative (LCI) and a host of other schemes.
The European Commission insists on giving its approval to tax incentives because it has a general prohibition on member states giving assistance to single organisations or sectors in a way that gives them an advantage over others.
But the revelations on just how long this process is taking raises questions as to whether these budgetary measures are effectively being wiped out.
The Department of Finance could not explain why the process was taking years in some cases, though a representative said delays of more than a year and a half were "normal".
The LCI was seen as crucial to revitalising the most dilapidated parts of Irish cities. It was designed to encourage owner-occupiers of historic buildings to renovate and refurbish these properties, in exchange for income tax relief.
It was first revealed by the Minister in the Finance Bill 2013. But a full 16 months later, the tax incentive is not in place. It must still get EU state aid approval, and then a formal commencement order, before it can be enacted, Mr Noonan said in response to a query by Sinn Fein spokesperson Pearse Doherty, without giving reasons for the delay at EU level.
A host of other Irish budgetary measures and tax incentives alongside the LCI have been similarly delayed by the approval process, Mr Noonan revealed.
A tax relief for entrepreneurs who reinvest the proceeds from the sale of their businesses (designed to encourage repeated entrepreneurship and indigenous job creation) has been delayed since October, when it was first introduced.
"My Department is liaising with the European Commission to obtain this approval. It is not clear how long this process will take. However, my department is endeavouring to obtain this approval in as timely a manner as possible" Mr Noonan said.
An exemption from stamp duty for companies listing on the Irish Stock Exchange's Enterprise Securities Markets – which generally involves smaller and more vulnerable start-up companies – is also stalled as it waits for approval.