Written Answers Nos. 179-202
179. Deputy Pearse Doherty asked the Minister for Finance if he will confirm the procedure adopted by the National Asset Management Agency when selling loans under its control, so as to maximise the return to the taxpayer from such disposals. [44286/12]
View answer180. Deputy Pearse Doherty asked the Minister for Finance if he will confirm that the National Asset Management Agency does not sell loans under its control for less than the original book value plus accumulated interest to the point of disposal, unless there is a competitive bidding or tendering process. [44287/12]
View answer181. Deputy Pearse Doherty asked the Minister for Finance if he will confirm that the National Asset Management Agency has sold loans, or allowed loans to be refinanced out of NAMA, at less than the original book value plus accumulated interest to the point of disposal; and if it has, if the relevant debtor has obtained any financial advantage through debt forgiveness or debt write-down from these transactions. [44288/12]
View answer182. Deputy Pearse Doherty asked the Minister for Finance if he will confirm the cash received by the National Asset Management Agency since its inception in respect of the sale of loans; the total original book value of the loans plus interest accruing to the point of disposal and the total NAMA acquisition value of the disposed loans. [44289/12]
View answerI propose to take Questions Nos. 179 to 182, inclusive, together.
I am advised by the National Asset Management Agency (NAMA) that since inception to 31 March 2012 it has sold loans with a nominal value of €1.9 billion, and generated €7.2 billion in cash receipts from borrowers. (see page 3 of NAMA Quarterly Report, 31 March 2012 for additional detail)
The Agency advises that net profit on disposal of loans is recorded in its Section 55 Quarterly Accounts and in its year-end consolidated income statement. The cumulative amount to 31 March 2012 is €89.7m. These documents are available on the Agency’s website, www.nama.ie. The Section 55 Quarterly Accounts for the three months ending 30th June 2012 are currently being considered by Government and will be laid before the Houses of the Oireachtas in due course.
The Agency advises that in the case of a loan sale, it disposes of the entire par debt and that therefore the matter of debt compromise does not arise. For the debtor, the only change is that there is a new loan note holder. NAMA operates a phased an orderly programme of disposal of both assets and loans to achieve the best possible outcome for the taxpayer.
The Agency advises further that it has launched an active loan sales process, having recently established two sales advisory panels one for Europe and one for the US. NAMA’s objective in any loans sales transaction is to achieve the best outcome for the taxpayer. In this context, the disclosure of the additional information sought by the Deputy could adversely affect the Agency’s competitive position. Providing such information would be commercially counterproductive for the taxpayer as it would be of greatest benefit to potential loan purchasers.
183. Deputy Richard Boyd Barrett asked the Minister for Finance the amount granted in tax relief for private health insurance for each respective income category ranging from those earning up to €10,000, €10,000 to €20,000, €20,000 to €50,000, €50,000 to €80,000, €80,000 to €120,000, €120,000 to €200,000, €200,000 to €300,000, €300,000 to €500,000, €500,000 to €1 million, €1 million to €2 million and over €2 million, in tabular form. [44297/12]
View answerAs I stated in a previous reply to the Deputy, on 26 September 2012, Question No 56 (ref no 40934/12), the cost of the tax relief for private health insurance to 31 August this year was €601 million, comprising €305 million in medical insurance relief and €296 million in age related tax credits. I am informed by the Revenue Commissioners that tax relief generally on contributions to private health insurance is provided by way of the Tax Relief at Source system (TRS). A breakdown by range of income of the tax relief provided in this way could not be identified without requiring the health insurers to provide further information in their annual returns, followed by carrying out a significant development of the Revenue Commissioners’ TRS computer system.
184. Deputy Richard Boyd Barrett asked the Minister for Finance the amount of tax that was foregone due to relief in approved retirement funds for each of the past four years; and if he will make a statement on the matter. [44298/12]
View answerApproved Retired Funds (ARFs) form part of the regime of flexible options on retirement first introduced in 1999. ARFs are not pension schemes per se. They are investment options into which the proceeds of certain pension arrangements can be invested on retirement. Under the “ARF option” individuals are entitled to take their retirement lump sum and, with the balance of their pension fund, purchase an annuity, invest in an ARF or take the balance in cash subject to tax. Where the ARF route is chosen, beneficial ownership of the assets in the ARF vests in the individual. ARFs are managed by Qualifying Fund Managers and any investment income or capital gains arising are exempt from tax while the funds are invested in the ARF. There is no requirement on Qualifying Fund Managers who hold and manage ARFs on behalf of individuals to provide data to my Department or to the Revenue Commissioners in relation to the value of ARF assets, the numbers of ARFs held by them or, in the context of the question, on the accrued income or gains arising from the investments in such funds. I am not, therefore, in a position to provide the definitive statistical data requested by the Deputy.
Electing to invest in an ARF or to receive the balance of a pension fund in cash are subject to conditions. The conditions include the requirements that the individual be over 75 years of age or, if younger, that the individual has a guaranteed level of pension income (“specified income”) actually in payment for life at the time the option is exercised.
Finance Act 2011 increased the “specified income” limit from the previous fixed amount of €12,700 introduced in 1999, to a variable amount equal to 1.5 times the maximum annual rate of the State Pension (Contributory) at the time the option is exercised, bringing the “specified income” limit to €18,000 per annum at present. This is the only income requirement attaching to the qualifying conditions for an ARF at retirement.
I should point out that sums withdrawn from an ARF are subject to tax at the individual ARF-owner’s marginal income tax rate. The 2006 Budget and Finance Act introduced an imputed or notional distribution of 3% of the value of the assets in an ARF on 31 December each year, which notional amount is taxed at the ARF owner’s marginal income tax rate. This measure was introduced because the internal review of tax relief for pensions provision undertaken by the Department of Finance and the Revenue Commissioners in 2005 found that the ARF option was largely not being used, as intended, to fund an income stream in retirement but, in certain cases, was being used to build up substantial funds in a tax-free environment over the long-term. The imputed distribution measure is designed to encourage the use of ARFs, as intended, in the way of actual draw downs being made which are subject to tax.
The annual imputed distribution of ARF assets was increased from 3% to 5% in Budget and Finance Act 2011 in respect of asset values as at 31 December 2010 and future years. It was further increased from 5% to 6% for ARFs with asset values in excess of €2 million at 31 December 2012 and future years. I am informed by the Revenue Commissioners that there was a yield of about €11 million from the taxation of the annual imputed distribution of ARF assets for 2011.
185. Deputy Richard Boyd Barrett asked the Minister for Finance the total profits declared in Ireland by companies registered here for the past four years; the total assets of these same companies in this period; the percentage of the sales of these companies that the profits represent for each of the past four years; the percentage of the assets of these companies that the profits represent for each of the four years; the number of workers these companies employed; and the average remuneration per employee. [44299/12]
View answerI am informed by the Revenue Commissioners that the latest relevant information available is in respect of all companies that were on corporation tax records in each of the four tax years 2007 to 2010. Figures for sales are not separately recorded but are included in corporation tax returns as part of a combined entry for sales/turnover/receipts. The figures for total taxable profits and of sales/turnover/receipts declared by those companies on their tax returns are included in the following table for the relevant years.
|
Tax Year |
Total Taxable Profits of companies* |
Sales/Turnover/Receipts of companies |
Total Taxable Profits of companies* as a % of Sales/Turnover/Receipts. |
|
2007 |
€63,160m |
€359,790m |
17.6% |
|
2008 |
€51,154m |
€416,922m |
12.3% |
|
2009 |
€57,210m |
€478,628m |
12.0% |
|
2010 |
€61,034m |
€461,451m |
13.2% |
* Before certain deductions such as management expenses but after capital allowances and loss relief.
The corporation tax return does not require information in respect of all assets held by companies and there is, therefore, no reliable basis for compiling this information.
The corporation tax return does not require the number of workers and their associated remuneration to be identified. Therefore, the information requested by the Deputy in this regard cannot be provided.
186. Deputy Richard Boyd Barrett asked the Minister for Finance the amount of extra taxation that has come to the State as a result of the introduction of transfer pricing rules in the Finance Act 2010. [44301/12]
View answerFinance Act 2010 introduced transfer pricing legislation in order to clarify the law in this area in Ireland and to confirm the role of the arm’s-length standard in setting transfer prices. The arms-length standard has been promulgated by the OECD and is already incorporated in Ireland’s double taxation treaties. The transfer pricing provisions are set out in Part 35A of the Taxes Consolidation Act 1997 and require, inter alia, that companies have records available to enable an assessment of whether the transfer prices being used have been set in accordance with the statutory requirements. The need to set transfer prices is an everyday reality for the companies concerned, given that the majority of cross-border transactions occur within multinational groups, rather than between multinational groups. The recent provisions have clarified the requirements under Irish law in relation to this normal aspect of a multinational group’s business, bringing a renewed focus among the companies concerned to ensuring that pricing conforms to the arm’s-length standard and that the required records are available. While compliance with the provisions will be monitored and consequent adjustments to income and tax payable may arise, the purpose of the Finance Act 2010 provisions is to provide a clear statutory statement of the requirements in this area.
With regards to increased taxation following the introduced of these rules, it is too early to say if this has been the case. I am informed by the Revenue Commissioners that the transfer pricing rules introduced in the Finance Act 2010 apply for accounting periods beginning on or after 1 January 2011. Accordingly, the first annual corporation tax returns affected are for the year ended December 2011 and were due for filing in September 2012. The Deputy should be advised that compliance with the provisions will be monitored. As with any other rules in relation to the computation of income for tax purposes, should any adjustments to income, resulting in additional tax, prove necessary, these will be made.
187. Deputy Richard Boyd Barrett asked the Minister for Finance the total profits of foreign subsidiaries of companies registered here; if Revenue will state the amount of extra taxation that would accrue as a result of the implementation of controlled foreign company regulations that would designate subsidiaries of Irish registered companies in other countries as taxable here. [44302/12]
View answerI am informed by the Revenue Commissioners that it is not possible to separately identify from their records either the foreign subsidiaries of companies registered here or the profits of such subsidiaries. Accordingly, it is not possible to provide the information requested by the Deputy.
188. Deputy Richard Boyd Barrett asked the Minister for Finance if he will provide the increased revenue figures that would result from increasing the effective tax rate on the top 5% of earners from the current rate of 36% to 50% and the top 10% from 33% to 40%. [44303/12]
View answerI am advised by the Revenue Commissioners that the full year yield, estimated by reference to 2012 incomes, that would result from increasing the average effective tax rate of the top 5 % of income earners from the existing average rate of 36% to 50%, would be of the order of € 2.9 billion. The corresponding full year yield from increasing the average effective tax rate of the top 10% of income earners (which clearly includes the top 5% of income earners referred to above) from the existing average rate of 33% to 40%, would be of the order of € 1.9 billion.
The Deputy should note that to increase the effective tax rate to 50% and 40% for the top 5% and 10% of income earners respectively would mean having to increase the top marginal rates of tax significantly and would also involve restricting access to the basic tax credits and tax bands as well as all tax reliefs in addition to the restrictions that are already in place for certain categories of higher income earners. The top marginal rates of tax are currently 52% and 55% for PAYE workers and self-employed respectively. While it is not possible to be precise the top marginal rates of tax would increase to in excess of 70%.
The marginal tax rate is described as the tax rate that applies to the last euro of the tax base. Marginal tax rates are important because they influence individual decisions to work more or indeed to work at all. The OECD working paper Tax and Economic Growth indicates that “there is also the possibility that high top marginal rates will increase the average tax rates paid by high-skilled and high-income earners so much that they will migrate to countries with lower rates resulting in a brain drain which may lower innovative activity and productivity” . Higher marginal tax rates for earners may also incentivise a greater level of tax evasion and contribute to the development of a shadow economy.
The Deputy may wish to note that the top 5% of income earners earn 24% of the total gross income and already pay 43% of the total income tax and 39% of the total income tax, USC and PRSI. While the top 10% of income earners earn 35% of the total gross income and pay 59% of the total income tax and 53% of the total income tax, USC and PRSI.
The yield figures are estimates from the Revenue tax-forecasting model using actual data for the year 2009 adjusted as necessary for income and employment trends in the interim. These are, therefore, provisional and likely to be revised. In addition, it should be noted that Gross Income is as defined in Revenue Statistical Report 2010.
189. Deputy Richard Boyd Barrett asked the Minister for Finance the amount of profits made by companies registered here in 2011; and the total amount of tax paid and to break down the profits and tax paid into bands starting from €0 to €100,000, €100,000 to €500,000, €500,000 to €1 million, €1 million to €5 million, €5 million to €20 million, €20 million to €100 million, €100 million to €500,000 million, €500,000 to €1 billion and more than €1 billion. [44304/12]
View answer190. Deputy Richard Boyd Barrett asked the Minister for Finance the number of companies that pay tax in each of the corporate tax brackets; the amount of profits they declare; the amount of tax they pay and the average effective tax rate in tabular form. [44305/12]
View answerI propose to take Questions Nos. 189 and 190 together.
I am informed by the Revenue Commissioners that the relevant information is contained in Table CTS 1 of the Statistical Reports published annually by the Commissioners and which can be found on the Revenue website at www.revenue.ie. The latest year for which information is published from that source is for 2009 which is contained in the 2010 report.
The corresponding information for 2010 is as per the following table. This will be published in the 2011 report on the website. Data for the year 2011 is not yet available.
CORPORATION TAX STATISTICS 2010
CTS1 - Distribution Of Incomes and Tax
|
Range Of Net Trading Income |
- |
Manufacturing Trading Profits |
Other Trading Profits (Including Shipping) |
Net Trading Income |
Net Case V (Rent) |
Total Income |
Regrossed Capital Gains |
Tax Due Including refunds |
|
Negative |
No. |
512 |
17,893 |
95,278 |
4,477 |
17,385 |
547 |
16,920 |
|
or Nil |
Amnt.(€m) |
886 |
7,402 |
0 |
447 |
4,914 |
503 |
246 |
|
€1-€25,000 |
No. |
206 |
13,622 |
13,883 |
270 |
13,871 |
40 |
12,699 |
|
Amnt.(€m) |
103 |
1,364 |
109 |
8 |
249 |
18 |
26 |
|
|
€25,001-€50,000 |
No. |
105 |
3,519 |
3,598 |
119 |
3,596 |
14 |
3,292 |
|
Amnt.(€m) |
9 |
198 |
129 |
4 |
151 |
1 |
19 |
|
|
€50,001-€75,000 |
No. |
74 |
1,945 |
2,009 |
111 |
2,008 |
11 |
1,869 |
|
Amnt.(€m) |
9 |
170 |
123 |
5 |
145 |
8 |
19 |
|
|
€75,001-€100,000 |
No. |
51 |
1,318 |
1,356 |
78 |
1,354 |
10 |
1,252 |
|
Amnt.(€m) |
8 |
157 |
118 |
3 |
127 |
1 |
17 |
|
|
€100,001-€200,000 |
No. |
153 |
2,663 |
2,758 |
182 |
2,757 |
24 |
2,601 |
|
Amnt.(€m) |
33 |
511 |
392 |
6 |
434 |
12 |
50 |
|
|
€200,001-€300,000 |
No. |
65 |
1,272 |
1,319 |
110 |
1,318 |
16 |
1,238 |
|
Amnt.(€m) |
26 |
388 |
323 |
6 |
342 |
2 |
37 |
|
|
€300,001-€400,000 |
No. |
64 |
694 |
725 |
64 |
724 |
11 |
687 |
|
Amnt.(€m) |
29 |
279 |
251 |
2 |
263 |
1 |
28 |
|
|
€400,001-€500,000 |
No. |
48 |
415 |
447 |
40 |
447 |
4 |
415 |
|
Amnt.(€m) |
32 |
224 |
200 |
6 |
212 |
2 |
22 |
|
|
€500,001-€600,000 |
No. |
29 |
295 |
308 |
34 |
308 |
4 |
285 |
|
Amnt.(€m) |
32 |
184 |
169 |
2 |
180 |
0 |
18 |
|
|
€600,001-€700,000 |
No. |
36 |
246 |
269 |
20 |
269 |
5 |
243 |
|
Amnt.(€m) |
29 |
200 |
173 |
14 |
210 |
2 |
21 |
|
|
€700,001-€800,000 |
No. |
29 |
187 |
206 |
15 |
206 |
3 |
186 |
|
Amnt.(€m) |
28 |
154 |
154 |
1 |
164 |
5 |
16 |
|
|
€800,001-€900,000 |
No. |
24 |
135 |
149 |
11 |
149 |
6 |
140 |
|
Amnt.(€m) |
54 |
138 |
126 |
1 |
156 |
25 |
18 |
|
|
€900,001-€1,000,000 |
No. |
20 |
122 |
134 |
8 |
134 |
3 |
127 |
|
Amnt.(€m) |
21 |
141 |
128 |
1 |
132 |
0 |
14 |
|
|
€1,000,001-€5,000,000 |
No. |
233 |
1,138 |
1,255 |
117 |
1,255 |
23 |
1,143 |
|
Amnt.(€m) |
654 |
3,086 |
2,807 |
11 |
3,260 |
29 |
268 |
|
|
€5,000,001-€10,000,000 |
No. |
41 |
227 |
247 |
18 |
247 |
4 |
228 |
|
Amnt.(€m) |
306 |
1,753 |
1,741 |
5 |
1,830 |
6 |
173 |
|
|
Over €10,000,000 |
No. |
120 |
429 |
463 |
48 |
463 |
13 |
431 |
|
Amnt.(€m) |
26,504 |
24,847 |
47,695 |
27 |
48,265 |
30 |
3,257 |
|
|
All Cases |
No. |
1,810 |
46,120 |
124,404 |
5,722 |
46,491 |
738 |
43,756 |
|
Amnt.(€m) |
28,762 |
41,196 |
54,638 |
548 |
61,034 |
645 |
4,246 |
I would draw the Deputy’s attention to the Revenue Commissioners’ obligation to observe confidentiality in relation to the taxation affairs of individual taxpayers and small groups of taxpayers. Accordingly, they are not in a position to provide a breakdown in relation to incomes exceeding €10 million as requested, due to the relatively small numbers of companies with incomes in excess of that level.
Regarding the tax rates, all companies operating in Ireland are chargeable to corporation tax at the 12.5% rate on their trading profits. A higher 25% rate applies in respect of investment, rental and other non-trading profits. This rate also applies in respect of certain petroleum, mining or land dealing activities. Companies’ capital gains are effectively chargeable at the capital gains tax rate and the rate was increased; from 20 per cent to 22 per cent for disposals on or after 15 October 2008; to 25% for disposals on or after 8 April 2009 and; to 30 per cent for disposals on or after 7 December 2011.
With regard to the effective tax rate, the Deputy has been advised in my previous replies to his questions on this subject that there are different ways of measuring the effective rate of corporation tax depending on the variables that are used. As there is no single internationally agreed comparative measure in place, I am not in a position to provide such a measure.
That said, when responding to questions in the House last year, I did mention that one estimate of the effective rate of corporation tax in Ireland is 11.9%. This figure came from a 2011 Paying Taxes study produced by the World Bank and PriceWaterhouseCoopers as part of an annual Doing Business report and includes a measurement of effective tax rates across 183 countries. This effective tax rate was calculated based on the tax obligations of a standardised company operating in each country of the study and using standard assumptions regarding exemptions, deductions and allowances.
Another recent study by the European Commission – Taxation Trends in the EU 2011 - also indicates that Ireland has an effective corporate tax rate which is close to, or indeed higher than, the statutory 12.5% rate (the rate identified is, in fact, higher than 12.5% perhaps because of the higher 25% tax rate that applies, generally, to non-trading profits).
The above calculations are to give the Deputy examples of the differences that exist in comparative studies on effective tax rates, depending on how the rate is calculated or who carries out the calculation. However, the fact that these effective tax rates are close to our headline rate is reflective of the strong transparency around Ireland’s 12.5% corporation tax regime.
191. Deputy Kevin Humphreys asked the Minister for Finance the number of staff members in the National Treasury Management Agency and its constituent bodies that are on secondment from the private sector or publicly controlled financial institutions whether bank or insurance company; if he will list their current duties; the institution or business from which they transferred; their previous duties before secondment; how the NTMA controls for conflict of interest; and if he will make a statement on the matter. [44340/12]
View answerThe following table details the staff members of the National Treasury Management Agency who are on secondment from the private sector:
|
Organisation / Business Unit |
Number of Staff on Secondment |
Institution on Secondment from: |
Current duties within NTMA |
Previous Duties before Secondment |
|
NAMA |
1 |
KPMG |
Provision of specialist tax services to NAMA. |
Prior to secondment, the duties of the secondee included the provision of tax advisory services to the firm’s clients. |
|
1 |
McCann Fitzgerald |
Provision of specialist legal services to NAMA. |
Prior to secondment, the duties of the secondee included the provision of legal services to the firm’s clients. |
|
|
3 |
Grant Thornton |
Provision of specialist accountancy services to NAMA. |
Prior to secondment, the duties of the secondees included the provision of accounting and transactional services to the firm’s clients. |
|
|
NTMA Legal Unit |
1 |
A&L Goodbody Solicitors |
Provision of legal advice to the NewERA Unit. |
Associate within Projects and Construction Department. |
With regard to control procedures concerning conflicts of interest, secondees sign an undertaking that they will comply with the NTMA’s Code of Practice on Confidentiality and Professional Conduct for Secondees. This document deals inter alia with the secondees’ obligations in respect of the disclosure of conflicts of interest. In the event that they find themselves in a position of actual or potential conflict of interest or where there might be a perception of bias or where their impartiality or professionalism in carrying out their obligations may be potentially affected, they are required to disclose the existence of the conflict of interest or any related issue in writing to the Head of the Business Unit to which they have been assigned. Periodic training is undertaken on the obligations contained in the Code of Practice.
192. Deputy Dessie Ellis asked the Minister for Finance his plans to appoint a National Assets Management Agency board member with experience in social housing and community development as allowed for in the National Assets Management Agency Act 2009; and if he will make a statement on the matter. [44352/12]
View answerAs the Deputy may be aware my Department has advertised seeking expressions of interest from suitably qualified people for appointment to the NAMA board. It has established a pool of candidates which is made up from submissions received on foot of an advertisement for expressions of interest and nominees put forward by my office. In line with the criteria set out in s19 of the NAMA Act, my Department are currently in the process of drawing up a shortlist of suitable candidates from this pool based on their experience and expertise. In particular, they are focused on candidates with expertise in Finance & Economics, Public Administration, Property Management and Sales, Urban and Land Planning and Social Housing and Community Development.
Once this process is completed I will then appoint a board member whom I feel has the most to bring to the board based on their expertise and experience .
193. Deputy Brendan Griffin asked the Minister for Finance if he will consider making it compulsory that VAT cannot be claimed back on services or product invoices until proof of payment is made; and if he will make a statement on the matter. [44353/12]
View answerI am advised by the Revenue Commissioners that under EU and domestic VAT rules traders who are registered for VAT collect VAT on the goods and services that they sell. In turn such traders are entitled to recover the VAT they incur on their business inputs used in the purchase or production of goods or delivery of services. The entitlement to recovery is based on the trader having a valid VAT Invoice for the business input. The entitlement is not dependent on whether the trader has paid the amount shown on the invoice. Changing the entitlement along the lines suggested by the Deputy to make it dependent on proof of payment would result in a cash-flow advantage to the Exchequer and cash-flow disadvantage to traders.
194. Deputy Kevin Humphreys asked the Minister for Finance the number of staff in his Department or agencies under his control that are currently on career break; the number of staff currently hired temporarily to cover those on career break; if he will provide a breakdown of the numbers by grade and agency; and if he will make a statement on the matter. [44367/12]
View answer228. Deputy Kevin Humphreys asked the Minister for Finance the number of staff across the public service that are currently on a career break; if he will provide a breakdown of the numbers on career leave by Department and agency; the estimated cost of this scheme per year; the number of staff currently hired temporarily to cover those on career break; the reforms that have taken place in this general area in the past year; if these staff were counted as a reduction in numbers employed in the public service during that time period; and if he will make a statement on the matter. [45625/12]
View answerI propose to take Questions Nos. 194 and 228 together.
The following table sets out the number of persons (ten) in my Department who are currently on career break. There are no staff curently hired temporarily to cover those on career break.
|
Grades |
Number |
|
AP |
2 |
|
HEO |
1 |
|
AO |
1 |
|
EO |
1 |
|
CO |
4 |
|
Services Officer |
1 |
The Revenue Commissioners have advised me that they have a total of one hundred and eighty one (181) staff are currently on career break, eighty (80) of whom availed of the special civil service incentive career break scheme.
It is noted that there are no salary costs in respect of staff who avail of normal course career breaks.
The filling of all posts arising from career breaks, retirements and other departures has been subject to the Government policy on public service numbers and, in particular, the March 2009 moratorium on recruitment and promotion. Both the Department of Finance and the Revenue Commissioner’s staffing levels are managed within the Employment Control Framework set by Government.
Staff on career breaks are not counted in either's staff numbers.
195. Deputy Derek Keating asked the Minister for Finance in view of the fact that the current save rate from out of hospital cardiac arrest here is around 7% and that areas such as Las Vegas casinos that had ready availability of automated external defibrillators and which were used within three minutes show a save rate of 74% and where community groups, sports clubs and schools here often have to fundraise for some time to try and purchase automated external defibrillators and for these groups, in particular, the VAT adds considerably to the difficulty in purchasing same and these groups cannot reclaim the VAT, if he will consider exempting these responder automated external defibrillators, and not the more complicated professional devices, from VAT which would help to increase the number of defibrillators in the community in view of the fact that approximately 5,000 people each year die here from heart attacks and if we increased the save rate by 1% there would be more people saved than die from fires in a whole year. [44383/12]
View answerThe VAT rating of goods and services is constrained by the requirements of EU VAT law with which Irish VAT law must comply. Defibrillators, other than implantable defibrillators, are liable to VAT at the standard rate, currently 23%. Parts or accessories are also liable to VAT at the standard rate. There is no provision in VAT law that would make it possible to exempt from VAT the supply of such products.
196. Deputy Nicky McFadden asked the Minister for Finance if the tyre traders industry will be added to the list of cash businesses to be targeted by the Revenue Commissioners due to a risk of non-compliance with regulations for VAT, tax and waste disposal; and if he will make a statement on the matter. [44386/12]
View answerThe Deputy will be aware that it is a matter for the Revenue Commissioners to determine which sectors and which cases are to be selected for compliance interventions. I am advised by the Revenue Commissioners that they are very mindful of the unfair competitive advantage to be gained by those businesses that do not fulfil their tax obligations. Revenue’s tax and duty compliance programmes are under constant review to ensure that they are focussed on the areas of greatest risk, including risks from the shadow/hidden economy. I am advised that Revenue tackles the problem of tax and duty evasion through their range of compliance and audit interventions including through targeted special projects. Case interventions are undertaken based on Revenue’s assessment of compliance risks, the level of those risks and other relevant information available. In 2011 Revenue carried out over 11,000 audits of businesses and individuals as well as over 546,000 other compliance checks. These resulted in additional yield for the Exchequer of almost €483m.
Revenue uses a wide range of methodologies to identify those who under-declare their income and/or are operating in the shadow/hidden economy, and deploys the full range of compliance interventions to tackle those risks. Activities undertaken can include covert surveillance, cold calls to businesses and venues as well as pre arranged aspect queries on specific items. There is a strong focus on cash businesses, given its potential high-risk nature, and I am informed that in the first eight months of 2012 audits specifically targeted at these businesses have yielded over €12m.
I am further advised by the Commissioners that, regarding the retail and wholesale motor vehicle parts and accessories sector, 17 Audits have been carried out so far in 2012, yielding €331,165. In 2011, 37 audits were carried out in this sector, yielding €483,070. These statistics are compiled from Revenue’s records and I am informed that for the purpose of their records, the motor vehicle parts and accessories sector includes the tyre distributor industry.
Revenue holds meetings with trade and representative bodies nationally and locally through the Hidden Economy Monitoring Group where the risks posed by shadow/hidden economy activities are discussed. Furthermore, Revenue encourages anyone who has specific information regarding any business that is engaged in tax evasion, to submit the details to their local Revenue office.
197. Deputy Arthur Spring asked the Minister for Finance the potential additional revenue that would be acquired through extending the universal social charge 3% surcharge, which currently only applies to the self-employed, to all income earners more than €100,000 irrespective of source. [44434/12]
View answerI am advised by the Revenue Commissioners that the full year yield, estimated by reference to 2013 incomes, from extending the additional universal social charge of 3%, which is currently applicable to self-employed income in excess of €100,000, to all income earners at this level of income would be of the order of €71 million. The Universal Social Charge is an individualised charge and as such, the estimate of yield is based on individual incomes of more than €100,000.
The estimated yield is based on confining the extension of the 3% rate to the portion of income which is in excess of €100,000, that is, the increase is not applied to the portion of total income earned up to €100,000.
The figure is an estimate from the Revenue tax-forecasting model using actual data for the year 2010 adjusted as necessary for income and employment trends in the interim. It is, therefore, provisional and likely to be revised.
198. Deputy Michael McGrath asked the Minister for Finance the amount of money spent in 2010, 2011 and to date in 2012 broken down between money spent on print media, broadcast media, online media and so on by the National Treasury Management Agency on advertising the various State savings products. [44445/12]
View answerAn Post is responsible for marketing the State Savings products (savings bonds, savings certificates, prize bonds, national instalment savings and national solidarity bond) on behalf of the National Treasury Management Agency (NTMA). The following table sets out the amounts paid out on advertising in the media in respect of the State Savings schemes in 2010, 2011 and to date in 2012:
|
- |
2010 |
2011 |
2012 (to end-September) |
|
Medium |
€ (excluding VAT) |
€ (excluding VAT) |
€ (excluding VAT) |
|
TV |
€315,455 |
€306,841 |
€260,606 |
|
Press |
€302,712 |
€322,548 |
€153,301 |
|
Digital |
€101,213 |
€13,846 |
€22,267 |
|
Radio |
€236,108 |
€252,934 |
€107,813 |
|
TOTAL |
€955,488 |
€896,170 |
€543,987 |
199. Deputy James Bannon asked the Minister for Finance the cost in 2011 to his Department and to each body under the aegis of his Department of implementing the Official Languages Act 2003; and if he will make a statement on the matter. [44466/12]
View answerThe following table details the information requested by the Deputy in relation to my Department and the Office and Agencies under the remit of my Department.
|
Costs of Implementing 2003 Official Language Act by Department/Office |
2011 |
|
Department of Finance |
7,781 |
|
Comptroller and Auditor General |
67,149 |
|
Appeal Commissioners |
Nil |
|
Revenue Commissioners |
56,935 |
|
Central Bank |
67,000 |
|
NTMA |
10,740 |
|
NPRF Commission |
4,270 |
|
NAMA |
8,452 |
|
Total |
198,865 |
The Official Languages Act, 2003, and subsequent Regulations place a wide range of responsibilities on public bodies in relation to the promotion of the Irish language. These include for example the use of Irish in correspondence, publications, stationery, signage, computer programmes, training and other areas.
The costs for my own Department relate primarily to the translation of Budget documents and the Finance Accounts.
For the Comptroller and Auditor General - the following documents are published bilingually in accordance with the provisions of section 10 of the Official Languages Act 2003: Comptroller and Auditor General Annual Report; Audited Appropriation Accounts; Corporate Report;The Statement of Strategy.
The Office also commits to publishing all electronic versions of the above documents on its website in accordance with the commitments under the Act.
For the Central Bank of Ireland, the principal costs in connection with the Official Languages Act, 2003 identified for 2011 relate to translation, design and printing costs for publications such as the Irish language Annual Report and Annual Performance Statement ; translation of correspondence and other material; dealing with internal/external parties concerning the correct and compliant practice on the use of the Irish language in the course of the Central Bank’s business; administration matters relating to developing compliance practice and raising awareness in the Bank.
In the case of Revenue, there are significant additional costs associated with the requirement for bilingual publications and associated separate printing, packaging, cataloguing, website development, ROS/self service offerings, training and storage costs.
The costs of implementing the provisions of the Act and legislations cannot be readily extracted or distinguished from the cost of providing services generally. However, the additional costs incurred by Revenue on external translation services in 2011 are shown in the table above.
Costs for the NTMA, NPRF and NAMA relate primarily to the publication of Annual Reports and Accounts in Irish. In addition to those costs shown in the table, costs of €7,179 were incurred by An Post in the production of State Savings forms and brochures in Irish. An Post acts as agent of the NTMA in relation to the State Savings products. These costs are treated as management fees for the operation of State Savings products and are charged to the Central Fund.
200. Deputy James Bannon asked the Minister for Finance the number of winding up petitions presented on behalf of the Revenue Commission in 2011 to date in 2012; and if he will make a statement on the matter. [44475/12]
View answerIn 2011 Revenue presented 62 petitions to the High Court to wind up companies that failed to meet their tax obligations and has presented 32 petitions to the High Court up to the 8th of October this year. Revenue has a strong focus on making sure that businesses comply with their tax and duty responsibilities by paying the right amount of tax on time. While Revenue is conscious of facilitating and supporting businesses, they expect businesses to continue, notwithstanding the more difficult economic circumstances in which they are now operating, to maintain a clear focus and organise their financial affairs to ensure that tax debts are paid as they fall due. Apart from the importance of timely compliance to the Exchequer, unfair competitive advantage achieved through persistent late or non-payment of tax undermines compliant businesses.
I am advised by the Revenue Commissioners that tax debts are only referred for collection enforcement, including the presentation of winding up petitions to the courts, where a taxpayer or business has failed to comply with their tax payment obligations and where no satisfactory proposals to address the debt have been made. Revenue will not initiate enforcement proceedings in situations where there is meaningful engagement and where the terms of any agreement are being adhered to. Revenue will petition the courts to wind up a company as only a last resort when all other options to encourage the business to meet its tax obligations have been exhausted.
201. Deputy Pearse Doherty asked the Minister for Finance the savings that could be made for the Exchequer if the Standard Fund Threshold the maximum allowable pension fund for tax purposes was reduced from €2.3 million to €1 million. [44514/12]
View answerThe Standard Fund Threshold (SFT) is the maximum allowable pension fund on retirement for tax purposes which was introduced in Budget and Finance Act 2006 to prevent over-funding of pensions through tax-relieved arrangements. The SFT was reduced in Budget and Finance Act 2011 by over 50% to a level of €2.3 million with effect from 7 December 2010 with transitional arrangements to protect the capital values of the pension rights of individuals where these exceeded the reduced SFT on that date. There is currently no underlying data available to my Department or to the Revenue Commissioners on which to base reliable estimates of the savings from a further significant reduction in the SFT to the level indicated in the question. Information on the numbers and values of individual pension funds or on individual accrued benefits are not generally required to be supplied to the Revenue Commissioners by the administrators of pension schemes and personal pension arrangements. The estimated savings indicated at the time in respect the Budget and Finance Act 2011 change in the SFT were quite conservative, based as they were, on incomplete data and using very broad assumptions. Indeed those underlying data and assumptions may not be directly applicable to determining the effect of a further significant decrease.
My Department has been engaging with representatives of the pensions industry with a view, among other things, to gathering private pensions-related data which may be of value into the future in estimating the costs of potential changes in the pensions’ tax area.
These engagements are ongoing.
202. Deputy Pearse Doherty asked the Minister for Finance the amount that could be raised for the Exchequer if the cumulative lifetime limit for tax free retirement sums was reduced from €200,000 to €100,000. [44515/12]
View answerThe following arrangements currently apply to retirement lump sums paid under pension arrangements approved by the Revenue Commissioners. Lump sum amounts up to €200,000 are paid free of tax. They are also paid free of USC. The portion of a lump sum between €200,001 and €575,000 is taxed on a ring-fenced basis at 20%. This means that no tax credits or other tax reliefs can be set against this portion of the lump sum. No USC is chargeable. Any amount of a lump sum in excess of €575,000 is taxed at the individual’s marginal rate of tax (credits and other tax reliefs are available). In this instance, USC is chargeable on the excess. These amounts are lifetime amounts with prior lump sums aggregating with later lump sums. I assume from the Deputy’s question that he is proposing that retirement lump sums in excess of €100,000 be taxed as outlined above. As there is no general requirement for data on the number of persons who are receiving payments of retirement lump sums of less than €200,000 to be returned to my Department or to the Revenue Commissioners, I am not in a position to provide definitive figures on the Exchequer impact of reducing the tax-free retirement lump sum amount from €200,000 to €100,000.
As an exercise that might provide some indication of the scale of the savings involved, it is estimated that just over 33,000 individuals in the public service would be on salaries of over €67,000 and less than €133,500 which, under existing pension scheme arrangements generally applying across the public service, would deliver retirement lump sums of between €100,000 and €200,000 to persons retiring after a full 40 year career. If it is assumed that these individuals would retire in line with retirement trends from the public service in a normal year (about 2.5%), then the additional tax yield from taxing lump sums in excess of €100,000 at 20% could be about €8 million in a full year.
I have no data on which to provide a similar estimate in relation to the private sector. I should point out, however, that one significant difference between public sector and private sector pension schemes is that private sector schemes invariably allow scheme members the option of commuting part of their pension fund for a tax-free lump sum. The option of receiving benefits in the form of pension only is not available to members of public sector schemes. Depending on the impact of any tax charge on retirement lump sums, the option to commute part of a pension fund may no longer be exercised by private sector pension scheme members or may be exercised in a manner that reduces the value of the lump sum taken to minimise or avoid any immediate tax charge.
