Mr Terry Larkin, currently chairman of Area Development Management Ltd (ADM), has been appointed chairman of the working group on the taxation of returns from credit union savings.

The group is to hold its first meeting early next week and is expected to report by September, 1998. Its terms of reference are "to examine the taxation of returns on credit union savings bearing in mind the special and particular nature of the credit union movement, its contribution to Irish society and the wider taxation issues involved".

The establishment of the group follows the controversy which erupted earlier this year when the Minister for Finance, Mr McCreevy, announced his intention to introduce DIRT on credit union deposits and a requirement on credit unions to report dividend payments of more than £500 to the Revenue Commissioners.

In the face of a barrage of criticism, Mr McCreevy subsequently decided not to go ahead with the proposals.

The group will be composed of the Registrar of Friendly Societies, four nominees of the Irish League of Credit Unions, and a representative each from the Department of Finance, the Department of Enterprise, Trade and Employment, and the Revenue Commissioners. Mr Larkin was appointed by Mr McCreevy as independent chairman.

Mr Larkin is a former president of the Confederation of Irish Industry, and previously chaired the governing body of Dublin City University.

ADM Ltd acts as the independent intermediary designated by the government, in agreement with the European Union, to take responsibility for the management of global grants for local development and its channelling to area-based partnership companies.