Dublin City University has become the first education institution to benefit from new tax breaks in its drive to raise £22 million for a new library and computer school extension. Launching the fund-raising drive yesterday, the Taoiseach, Mr Ahern, said DCU's ability to co-operate with industry was "the envy of other universities and colleges", and its use of Section 25 of the 1997 Finance Act was "blazing a trail others are very anxious to follow."
DCU initiated the concept of Section 25 relief after it was turned down for a 50 per cent grant by the Government for the library project in 1996. With the accountancy firm Coopers and Lybrand it proposed a section in the Finance Act which would put third-level institutions on the same footing, for tax purposes, as businesses when borrowing funds to finance capital projects.
Until last year university buildings did not attract capital allowances, unlike, for example, new production buildings put up by manufacturing firms. This meant universities could not finance capital projects through "selling" capital allowances to banks and other financial institutions.
Section 25 of the Finance Act serves to spread the State's 50 per cent contribution to DCU's library and computer school extension over 10 years. The Government has to provide only 14 per cent of the total cost in the first year and nothing further until the tax break takes effect in the fourth year.
DCU has already raised £4.2 million of its £11 million share, mainly in the United States, said Ms Mairead Owens of the DCU Educational Trust yesterday. The fruit importers Fyffes made a large contribution.
The new £17.5 million library will have a number of innovative features, including access to the Internet for 1,500 students.
The £4.5 million extension to the School of Computer Applications will enable DCU to enrol an extra 1,500 students in computer related courses.