Suggestion on a new form of Tax Relief?

[ixus]

I was just thinking of a possible new form of Tax Relief that could be introduced to help develop & pay for our road network and possibly eliminate anymore Toll Roads being introduced.

Could a system be set-up whereby a person or company was allowed to give a lump sum to the government for the building / upgrading of our road network and receive tax relief on that lump sum.

Example :
A person gives €100,000 to the government (strictly for road building) and receives tax relief of €125,000 over a 6/7 year period, with a cap of €30,000 in any 1 year.

Would this be possible?
Is it a daft idea? (figures could obviously be changed)

I suggested it because I constantly hear of County Councils saying they don't have enough money to upgrade roads and they need to collect levies.
By the time they've collected levies, the price of constructions has gone up while the value of the collected levies have decreased.

 

[ClubMan]

I thought that the exchequer was rolling in the tax take money these days such that it was hardly necessary to give tax breaks in order to raise money for such capital projects? If the local authorities are stuck for money then perhaps there is a problem with central Government funding and how it is distributed to the local/regional authorities?

 

[RainyDay]

WHat's in it for the donor? Why would I give the Govt a loan of this nature?

What's in it for the Govt? Why wouldn't they simply borrow the money on the open markets?

 

[Inspiron]

About five years ago I saw a statistic which showed that only approximately 27% of road related taxes (VRT, VAT on vehicles/Fuel/VRT, Road Tax, duty on fuel, etc.) were being spent on the development and maintenance of our road infrastructure.

I am sure that this percentage must have increased since then because we have accelerated the development of new dual carriageways - I think of motorways as being at least three lane roads like the M1, M4, M25 etc. in the U.K.

If we assume that the rationale for tolling roads is that the user pays, then I think that is a good idea.

However, I believe that we should not have to pay any tolls until all of our road related taxes are being spent on the road infrastructure. Preferably spent effectively and efficiently, where there is a clear return and we get proper value for money.

 

[ixus]

WHat's in it for the donor? Why would I give the Govt a loan of this nature?

What's in it for the Govt? Why wouldn't they simply borrow the money on the open markets?

Well I was suggesting if one put €100K in they get tax relief of €125K over a period of 6/7 years. The donor would essentially get €5 for every €4 they put in, but in the form of tax credits.

The other benefit would / could be that county councils / the government would have funds to act straight away on upgrading roads and have no excuses for not acting immediately.

I don't have a thorough understanding of the economy or taxation laws, just thought it might be a good idea.

 

[RainyDay]

Well I was suggesting if one put €100K in they get tax relief of €125K over a period of 6/7 years. The donor would essentially get €5 for every €4 they put in, but in the form of tax credits.

This is equivalent to 3.8% compound return over 7 years. Seeing as they can get 3.05% by just putting their money in a deposit account today, I don't see the huge attraction in lending the money to the Govt in this way.

The other benefit would / could be that county councils / the government would have funds to act straight away on upgrading roads and have no excuses for not acting immediately.
.

The Govt can borrow as much money as they need tomorrow, if they wish.