Written Answers Nos. 110-24
110. Deputy Bernard J. Durkan asked the Minister for Finance if a required number to enable purchase of specially modified vehicle will be provided in the case of a person (details supplied); and if he will make a statement on the matter. [34155/16]
View answerI am advised by Revenue that an application for tax relief under the Drivers and Passengers with Disabilities Scheme was received by them, in respect of a car to be used for the transport of the person concerned. To qualify for relief as a passenger with a disability, the car must either be purchased by the passenger or by a family member of that person. The application in this instance was refused on the basis that the applicant did not qualify as a 'family member' under the scheme. Consequently, there was no exemption notification number issued.
111. Deputy Peter Burke asked the Minister for Finance the total tax take on a new car retailing at €15,000, €20,000, €25,000, €30,000 and in €10,000 increments up to €100,000; if he will provide a breakdown on headings under which the tax is collected; and if he will make a statement on the matter. [34168/16]
View answer112. Deputy Peter Burke asked the Minister for Finance the total tax paid on second-hand cars imported here beginning at €5,000 and in increments of €5,000 up to €50,000; if he will provide a breakdown on headings under which the tax is collected; and if he will make a statement on the matter. [34169/16]
View answer113. Deputy Peter Burke asked the Minister for Finance the tax take on motor diesel, petrol and marked gas oil on a spend of €20, €30, €40, €50 and €60; and if he will make a statement on the matter. [34170/16]
View answerI propose to take Questions Nos. 111 to 113, inclusive, together.
I am informed by Revenue that Vehicle Registration Tax (VRT) and Value Added Tax (VAT) are charged on new cars. The rate of VRT charged on passenger cars is based on the level of CO2 emissions of the vehicle. The tax take on new cars as shown in the following table is based on the average open market selling price in each of the eleven VRT rate bands in the period January to October 2016.
|
CO2 Band |
Average OMSP |
VRT |
VAT |
Total Tax |
|
€ |
€ |
€ |
€ |
|
|
A1 - 14% |
16,872 |
2,362 |
2,713 |
5,075 |
|
A2 - 15% |
22,128 |
3,319 |
3,517 |
6,836 |
|
A3 - 16% |
25,725 |
4,116 |
4,041 |
8,157 |
|
A4 - 17% |
26,367 |
4,482 |
4,092 |
8,575 |
|
B1 - 18% |
26,044 |
4,688 |
3,993 |
8,681 |
|
B2 - 19% |
37,383 |
7,103 |
5,662 |
12,765 |
|
C - 23% |
46,878 |
10,782 |
6,750 |
17,532 |
|
D - 27% |
57,535 |
15,535 |
7,854 |
23,388 |
|
E - 30% |
83,251 |
24,975 |
10,897 |
35,873 |
|
F - 34% |
95,693 |
32,536 |
11,810 |
44,345 |
|
G - 36% |
179,428 |
64,594 |
21,473 |
86,067 |
I am further informed by Revenue that VRT is charged on used cars. The rate of VRT charged on passenger cars is based on the level of CO2 emissions of the vehicle. The tax take on used cars as shown in the following table is based on the most popular VRT band (A4 - VRT rate 17%) in the period January to October 2016, beginning at €5,000 and in increments of €5,000 up to €50,000. It should be noted also that for Irish-registered second-hand vehicles, VAT is due on the difference between the sale price and the purchaser price of the vehicle. As the specific rules that apply vary depending on the nature of the transaction and the amounts involved also differ on a sale by sale basis, it is not possible to include a representation of the impact of this aspect in the following table.
|
Rate |
Value |
VRT |
|
|
€ |
€ |
|
17% |
5,000 |
850 |
|
17% |
10,000 |
1,700 |
|
17% |
15,000 |
2,550 |
|
17% |
20,000 |
3,400 |
|
17% |
25,000 |
4,250 |
|
17% |
30,000 |
5,100 |
|
17% |
35,000 |
5,950 |
|
17% |
40,000 |
6,800 |
|
17% |
45,000 |
7,650 |
|
17% |
50,000 |
8,500 |
I am further informed by Revenue that the tax take on auto diesel, petrol and marked gas oil in respect of the specified amounts are as follows:
|
- |
Petrol |
Auto Diesel |
MGO |
|
€ |
€ |
€ |
€ |
|
20 |
12.65 |
11.66 |
5.68 |
|
30 |
18.98 |
17.50 |
8.52 |
|
40 |
25.30 |
23.33 |
11.36 |
|
50 |
31.63 |
29.16 |
14.20 |
|
60 |
37.95 |
34.99 |
17.03 |
The tax shown is in respect of Mineral Oil Tax, Carbon Tax and Value Added Tax and is based on an average price of €1.209 for auto diesel, €1.319 for petrol and €0.62 for marked gas oil. The incidence of taxation tables on the Revenue statistics website provide similar figures back to 2003, available at: http://www.revenue.ie/en/about/statistics/excise-duty-vat.html.
114. Deputy Micheál Martin asked the Minister for Finance the current tax treatment on Irish resident international seafarers' income, including any reliefs in operation; if he has examined the UK relief system in place for resident seafarers; and if he will make a statement on the matter. [34203/16]
View answerIrish resident seafarers are subject to tax in this State under Schedule E and the PAYE system of tax deduction applies to their income. Section 472B of the Taxes Consolidation Act 1997 provides for an annual income tax allowance of €6,350 for seafarers who satisfy certain conditions. This is in addition to the standard tax credits that are generally available.
The seafarers' allowance is conditional on a seafarer being at sea for at least 161 days in a tax year. The duties must be wholly performed aboard sea-going ships on international voyages. A sea-going ship is one that is registered in the relevant Register of a Member State and is used solely for the trade of carrying, by sea, passengers or cargo for reward. An international voyage is a voyage that begins or ends in a port outside the State. The most recent year for which figures are available is 2014 when a total of 160 individuals claimed the seafarer's allowance at a cost of approximately €0.3 million.
A review of the Marine taxation regime in Ireland was carried out in 2015. A working group including the Department of Finance, the Department of Agriculture, Food and the Marine, the Department of Transport, Tourism and Sport and the Department of Jobs, Enterprise and Innovation was set up to oversee the Review and it liaised with other Government Departments and agencies including with the Marine Co-ordination Group (MCG) which is under the auspices of the Department of the Taoiseach.
Indecon International Economic Consultants completed the review and carried out a consultation process with key stakeholders. It encompassed a review of the tax supports available to the maritime sector in Ireland, analysis of the benefits available to the sector and the wider economy versus the Exchequer costs and made certain proposals for changes which could be made to enhance or maximise the value for money to the tax payer, taking EU State Aid considerations into account.
Indecon provided economic information on the size of the marine sector, including employment in the sector and growth targets. They also carried out a review of the existing supports, and the tax contribution of the marine sector to the Irish economy. This included a review of marine tax measures in other countries, including the UK.
I understand that the UK tax relief for seafarers is different in structure than Ireland's. The approval of that scheme by the European Commission under state aid rules is a matter for the UK authorities. The tax relief regime in Ireland, in addition to the PRSI exemption for seafarers, have both been approved by the European Union under the applicable state aid rules.
115. Deputy Thomas P. Broughan asked the Minister for Finance the process whereby budget 2017 is scrutinised by the EU institutions; if the Finance Bill 2016 is subject to similar scrutiny; if he will report on any official EU reactions to the budget and Finance Bill; and if he will make a statement on the matter. [34220/16]
View answerAll euro area Member States are required to submit their draft budgetary plans for the coming year to the European Commission by mid-October (Member States in a programme are exempt from this process). This is required under Regulation (EU) No 473/2013 of the European Parliament and of the Council of 21 May 2013 on common provisions for monitoring and assessing draft budgetary plans and ensuring the correction of excessive deficit of the Member States in the euro area. Draft budgetary plans have to be submitted in a common format.
Ireland's Draft Budgetary Plan for 2017 was submitted to the European Commission on 17 October in line with requirements.
The Commission assesses the plans for all euro area Member States as to whether they are compliant with the requirements of the Stability and Growth Pact. Where the Commission identifies particular issues and risks in the submitted draft budgetary plans, it is required to consult with the Member State concerned within a week of receipt before taking further action. This year, the Commission issued letters to seven Member States. Ireland was not one of these Member States.
Under the legislation, the Commission is required to issue its opinion on the draft budgetary plans by 30 November. The opinion generally grades the draft budgetary plans as being compliant, partially compliant, or at risk of non-compliance. The Commission's opinions are normally issued ahead of the deadline - the opinions are currently expected to be published in mid-November.
Regarding the Finance Bill, this is not submitted to the European Commission as it is the domestic legislation that gives effect to the taxation measures announced as part of the Budget. Any measures that may require approval from the Commission under State aid rules are subject to a commencement order pending approval from the Commission. Likewise, the Estimates to be voted on by the Dáil and the Social Welfare Bill are not submitted to the European Commission.
In terms of reporting, I would point out that the Commission's assessment of Ireland's Draft Budgetary Plan will, of course, be made public and I will comment accordingly.
116. Deputy Thomas P. Broughan asked the Minister for Finance his Department's role in preparations for Brexit; if a detailed sectoral analysis of the economy has been carried out to examine the possible or likely impacts on tax revenue from the UK leaving the EU; and if he will make a statement on the matter. [34221/16]
View answerMy Department has been to the fore in terms of producing and funding relevant analysis on the Irish economic and budgetary impact of 'Brexit'.
Outputs include a scoping study produced by the ESRI last year under our joint research programme, initial short-term (i.e. for next year) estimates published in the Summer Economic Statement, an analysis of the possible sectoral and regional impacts of Brexit arising from Ireland's trade relationship with the UK, published with Budget 2017, and a joint research paper with the ESRI modelling the medium to long term macroeconomic impact of 'Brexit'.
The sectoral analysis shows that those most exposed to the UK are generally comprised of indigenous enterprises that are small in scale, are concentrated in food and manufacturing industries, have relatively low profit levels and have a disproportionate concentration of employment in regional and rural labour markets. Budget 2017 laid out an extensive range of policies targeted at these exposed sectors.
In relation to the impact on tax revenue the joint work with the ESRI has estimated that over the medium to long term the government debt and deficit ratios are expected to worsen by 10.8 percentage points and 1 percentage point, respectively, after 10 years in the event of the UK entering a World Trade Organisation relationship with the EU. I would stress that these are determined on a 'no policy change basis'. With these potential adverse outcomes in mind Budget 2017 sought to build up Ireland's buffers to any 'Brexit' fallout. Accordingly the Government has decided to set a new domestic target of a debt to GDP ratio of 45 percent to be reached by the mid-2020s, or thereafter, depending on economic growth. Further measures will be introduced over time once there is greater clarity on the exact timing of the UK's exit as well as the post-exit relationship between the EU and the UK.
117. Deputy Denise Mitchell asked the Minister for Finance the cost in a full year if the small benefits exemption allowance was increased from €500 to €620. [34225/16]
View answerThe Small Benefits Exemption provides that, in general, where an employer provides an employee/director with a small benefit (that is, a benefit with a value not exceeding €500), PAYE, USC and PRSI need not be applied to that benefit. This treatment does not apply to cash payments, which are taxable in full. No more than one such benefit given to an employee in a tax year will qualify for such treatment. Where a benefit exceeds €500 in value the full value of the benefit is to be subjected to PAYE, USC and PRSI.
The overall cost of the increase proposed by the Deputy is difficult to estimate. It would depend very much on the take-up, the amounts awarded by employers, the tax situation of the employees and how the vouchers are subsequently used. It should be noted that Revenue does not maintain (nor is it required to maintain) any statistics on the measure in its current form.
118. Deputy Bernard J. Durkan asked the Minister for Finance if the lending institutions can continue to be encouraged to accommodate borrowers who have made reasonable efforts to meet their mortgage or borrowing repayments in respect of loans, particularly those loans which were by today's standards unsustainable from the outset; if the lending institutions will refrain from repossessions until an amicable and reasonable solution can be found to meet the requirements of borrowers and lenders and that the acquisition of loan books by third parties would not frustrate these objectives; and if he will make a statement on the matter. [34274/16]
View answer120. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which his Department can monitor the situation affecting those with mortgage arrears, with particular reference to the need to ensure that family homes are protected to the greatest extent possible and that borrowers who continue to make payments within their capacity are facilitated into the future; and if he will make a statement on the matter. [34276/16]
View answerI propose to take Questions Nos. 118 and 120 together.
The Deputy will be aware from previous PQ responses that the Government attaches great importance to the resolution of mortgage arrears and wants to keep families in their homes and avoid repossessions in so far as possible and he will also be aware of the recent establishment of the Abhaile mortgage arrears resolution service to ensure that those either in mortgage arrears or at risk of going into mortgage arrears on their primary residence are able to access State-funded professional legal or financial advice on their resolution options. The Deputy will also know that the Code of Conduct on Mortgage Arrears (CCMA) sets out statutory requirements for mortgage lenders and credit servicing firms dealing with borrowers in or facing arrears on the mortgage loan secured by their primary residence.
The CCMA includes guidelines on how co-operating borrowers are to be treated before legal action can commence. It is important to also note that the commencement of the court process is not a signal that a repossession will occur; it may often be the case that the process then prompts borrowers to re-engage with their bank and to find a solution. Often these cases are adjourned to allow both parties time to find a sustainable solution. Borrowers should also consider other options such as a Personal Insolvency Arrangement.
With respect to the question of loans that have been sold to third parties, the Deputy will be aware that the Consumer Protection (Regulation of Credit Servicing Firms) Act, 2015 was introduced to fill the consumer protection gap where loans were sold by the original lender to an unregulated entity. The 2015 Act introduced a regulatory regime for a new type of entity called a 'credit servicing firm'. Credit Servicing Firms are now subject to the provisions of Irish financial services law that apply to 'regulated financial service providers'. This ensures that relevant borrowers, whose loans are sold to third parties, maintain the same regulatory protections they had prior to the sale, including under the various statutory codes, such as the Consumer Protection Code and the Code of Conduct on Mortgage Arrears. The Act means that any purchasers of loans books are required either to become regulated themselves by the Central Bank or use a regulated credit servicing firm to service their loans.
The numbers in mortgage arrears have been steadily declining. Data released by the Central Bank on 13 September shows that to end-Q2 2016, the number of mortgage accounts in arrears for principal dwelling houses (PDH) has declined for the last twelve quarters. Some 120,614 PDH accounts were also classified as restructured. It is clear that where a borrower actively engages with their lender under the CCMA with a view to agreeing a sustainable arrangement to address their mortgage arrears, it is more likely that an equitable arrangement will be found and that the borrower will be able to remain in their family home.
119. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which the economy continues to remain competitive when compared to other competing jurisdictions within the European Union and without; and if he will make a statement on the matter. [34275/16]
View answerSignificant progress has been made in recent years in improving Ireland's competitiveness. The latest figures from the Central Bank of Ireland, show that Ireland's real harmonised competitiveness indicator (a widely used measure of competitiveness in Europe) has improved by over 20 per cent between its peak in 2008 and September 2016.
The gains in Irish competitiveness achieved since 2008 have been hard won through productivity improvements and wage and price moderation. It is important that this competitiveness is preserved and continues to support growth. In this regard we must be cognisant that favourable exchange rate movements can reverse, as can be seen for example in the recent strengthening of the euro against sterling. Similarly gains from the fall in oil prices may unwind in the future. This highlights the importance of maintaining competitiveness-oriented policies to help address emerging uncertainties.
122. Deputy Bernard J. Durkan asked the Minister for Finance the degree to which he continues to monitor house property prices, with particular reference to the need to ensure that such prices do not become a major governing economic influence as in the past; and if he will make a statement on the matter. [34278/16]
View answerAccording to the Central Statistics Office's Residential Property Price Index, national property prices increased by 1.6 per cent between July and August and by 7.2 per cent on an annual basis. This overall trend has been driven by price developments outside of Dublin, where residential property prices have increased by 1.8 per cent over the month and by 11.4 per cent on an annual basis. In Dublin, residential property price inflation has been more subdued, increasing by 1.5 per cent in August and by 4.5 per cent on an annual basis. The pick-up in residential property price growth over the last two months follows several months of moderation, most likely reflecting the impact of Central Bank's macro-prudential measures.
I wish to assure the Deputy that my Department continues to monitor developments in the property market including property prices. The recently announced Rebuilding Ireland - Action Plan for Housing affirms the Government's commitment to restore the housing market to a sustainable equilibrium with 84 actionable measures across five key pillars namely Address Homelessness, Accelerate Social Housing, Build More Homes, Improve the Rental Sector and Utilise Existing Housing. Progress in delivering on these actions is being monitored on an ongoing basis and the first quarterly progress report has recently been published.
123. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which corrective fiscal or budgetary measures are required over the next six years to ensure sustainable economic growth without over reliance on any particular sector; the extent to which he expects the economy to perform throughout this period and to remain amenable to job creation; and if he will make a statement on the matter. [34279/16]
View answerBudget 2017, which I presented last month, sets a general government deficit target of 0.4 per cent of GDP for 2017, following the projected deficit of 0.9 per cent of GDP this year. This will keep us on course to achieve our medium term target of a balanced budget in structural terms, defined as a structural deficit of 0.5 per cent of GDP, in 2018.
It should be noted these calculations are highly sensitive and are a function of a number of factors including our deficit performance which is contingent upon the continuation of prudent fiscal policies, consistent with the EU fiscal rules. Any deviation from this budgetary path could jeopardise achievement of this central assumption of our fiscal policy, particularly in relation to the post 2018 years when fiscal space opens up significantly on foot of achievement of a balanced budget in 2018.
My Department's macroeconomic forecasts, which underpin the Budget, show growth of 4.2 per cent this year and 3.5 per cent next year. The growth outlook for next year has been revised downwards by approximately ½ percentage point reflecting the uncertainty arising from the UK decision to leave the European Union. Over the medium-term (2018-2021) the economy is projected to grow in line with potential at around 3 per cent per annum on average. This growth is projected to be more balanced with strong positive contributions expected from both domestic demand and net exports.
The short-term outlook for the labour market also remains positive. For this year, employment growth of 2.6 per cent (52,000 jobs) is projected, with the unemployment rate set to average 8.3 per cent. For next year, employment gains of 2.1 per cent (43,000 jobs) are anticipated, with unemployment set to average 7.7 per cent. Employment growth averaging 1¾ per cent per annum is envisaged over the 2018-2021 period. Aggregate labour supply is projected to continue to expand over the medium-term supported by a resumption in positive net migration and a pick-up in participation rates. As a result, the unemployment rate is expected to fall towards 6 per cent by 2021.
My Department closely monitors developments at macro-fiscal level and economic performance at a sectoral level. Government policy will continue to guard against the build-up of sectoral imbalances and to avoid over-dependence on a single sector, as was previously the case with Ireland's construction sector.
The Fiscal and Economic Outlook published with the Budget notes that the economic landscape is characterised by considerable uncertainty at present, with risks firmly tilted to the downside. A number of specific risks are identified, including those arising from further sterling depreciation and a "hard" Brexit.
In view of such risks, it is appropriate that we should enhance our fiscal shock absorption capacity. The Government has therefore decided to establish a rainy day fund, starting in 2019, once we have achieved a balanced budget in 2018 as envisaged. This will be both a counter cyclical measure to avoid overheating, and will also enable us to deal with the initial effects of any shock that may occur.
However, it is also appropriate to take additional measures. While our debt ratio has fallen from a high of 120 per cent in 2013 to an expected 76 per cent this year it remains high in value and by comparison with others. The Government has therefore decided to set a new domestic target of a debt to GDP ratio of 45 per cent to be reached by the mid-2020s or thereafter depending on economic growth well inside the 60 per cent required by the Stability and Growth Pact to take account of the particular risks that Ireland, as a small and very open economy, faces.
124. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he expects credit availability to small and medium-sized enterprises to improve in line with requirements; and if he will make a statement on the matter. [34280/16]
View answerGovernment policy is focused on ensuring that all viable SMEs have access to an appropriate supply of credit from a diverse range of bank and non-bank sources. In this regard the Government has developed a number of initiatives to ensure that the supply of credit in the market is sufficient to meet the existing and future needs of SMEs.
A key objective of the Strategic Banking Corporation of Ireland (SBCI) is to ensure that SMEs can access low cost flexible loans from a variety of sources. The SBCI channels its funds through lending partners known as on-lenders. The SBCI currently has three bank on-lending partners and four non-bank on-lending partners. The SBCI has a current funding capacity of €1.05 billion which it makes available its on lending partners as demand from SMEs arises. To the end of June 2016 the SBCI has lent €347 million has been lent to over 8,600 SMEs, supporting more than 43,000 jobs across the country.
Another recent initiative is the €150 million agri-loan fund announced by the Department of Agriculture, Food and the Marine. This fund will provide highly flexible, low interest loans to farming SMEs.
The Microenterprise Loan Fund, administered by Microfinance Ireland, is an additional source of credit that provides loans for up to €25,000 to start-up, newly established, or growing micro enterprises employing less than 10 people.
The Credit Review Office (CRO) is another government initiative that helps SMEs who have had an application for credit of up to €3 million declined or reduced by the main banks, and who feel that they have a viable business proposition. This is a strictly confidential process between the business, the Credit Review Office and the bank. The CRO overturns more than 50% of appeals it receives.
The Government remains committed to the SME sector and sees it as the key engine of ongoing economic growth. Consequently my Department and the Credit Review Office, working with the other relevant Departments and Agencies, will continue to monitor the availability of both bank and non-bank credit in order to ensure that there is sufficient access to finance for SMEs.
