The Institute of Chartered Accountants in Ireland (ICAI) is to submit a proposal to the Minister for Finance to introduce short term tax relief for businesses replacing computer equipment to deal with the "Millennium Bug".
The move follows an indication last week by the Minister of State for Science, Mr Noel Treacy, that such a scheme might be acceptable in the absence of Government funding to tackle the problem.
Speaking at a Year 2000 (Y2K) Accounting and Taxation conference in Dublin yesterday, the president of the ICAI, Mr Pierce Kent, said: "While I appreciate that this is an issue which individual businesses must resolve for themselves, I believe that some short term tax relief for necessary hardware purchases would encourage businesses to act more promptly. We will very shortly be submitting our ideas on this area to the Minister for Finance."
It is likely the proposal would chiefly benefit those companies needing to replace computer hardware to become Y2K compliant. Generally classed as a capital expenditure, the outlay can be written off over a number of years. It is understood the proposal would seek to accelerate this write off, and ease the cash flow problems facing smaller businesses over a shorter period.
Drawing from a recent survey which concluded the Y2K problem is only being effectively addressed by one in seven countries, Mr Kent said a lack of economic resources was the most common reason cited for lack of preparedness.
