Written Answers Nos. 203-214
203. Deputy Pearse Doherty asked the Minister for Finance the amount that could be raised for the Exchequer if the imputed distribution percentage on approved retirement funds was increased from 6% to 7% for ARFs with assets of €1 million or more. [44516/12]
View answerAn annual imputed distribution rate of 5% applies to approved retirement funds (ARFs) with asset values of €2 million or less and, from this tax year, to ‘vested’ Personal Retirement Savings Accounts (PRSAs where benefits have commenced) on the same basis. A higher imputed distribution rate of 6% applies from this tax year to ARFs and/or ‘vested’ PRSAs with asset values of more than €2 million. I assume the Deputy is suggesting an increase in the imputed distribution from 6% to 7% for ARFs and/or ‘vested’ PRSAs of more than €2 million in value and an increase from 5% to 7% where the asset values are greater than €1 million and less than €2 million. I am informed by the Revenue Commissioners that information provided to them in the context of the tax paid on these deemed or imputed distributions does not include information on the value of the ARFs out of which the distributions are deemed to arise. There is therefore no basis on which a definitive estimate of the impact on the Exchequer of the change mentioned in the question could be compiled.
As an exercise that might provide some indication of the scale of the additional tax yield involved, data made available to my Department from private sector sources provides a breakdown of ARFs by value in respect of a number of providers representing an estimated 40% of the ARF market. There is no similar data available in relation to ‘vested’ PRSAs.
Out of a total value of some €2.4 billion in ARFs under management by these providers where the average ARF value was just over €127,000, the total value of those ARFs representing individual funds of over €1m and under €2 million was €274 million. The total value of those ARFs representing individual funds of over €2m was €137 million. Based on a very rough extrapolation of these figures to arrive at a broad potential estimate for the total value of ARFs with assets in excess of €1 million, the estimated additional tax yield from applying increased imputed distribution rates to such ARFs as set out above would be about €6.5 million in a full year.
It is important to note that the deemed or imputed distribution measure is designed to encourage draw downs from ARFs and ‘vested’ PRSAs so that they are used, as intended, to fund a stream of income in retirement in the same way as a retirement annuity, for which ARFs are supposed to operate as a more flexible alternative. The measure, in itself, does not give rise to significant tax revenues as it does not apply to actual draw-downs from ARFs and ‘vested’ PRSAs, which are taxed in the normal way. Moreover, increasing the annual percentage notional distribution for ARFs and ‘vested’ PRSAs as suggested in the question would further increase the risk that the retirement income derived by the owners from such funds could be depleted before death.
204. Deputy Patrick Nulty asked the Minister for Finance his forecasts for each year out to 2016 for nominal GDP, GDP growth, nominal GNP, GNP growth, nominal General Government Deficit, GGD as a percentage of GDP, nominal cost of interest on the national debt, cost of interest on the national debt as a percentage of GDP, and the assumed average interest rate on the overall national debt underpinning these latter assumptions, the assumed average interest rate on that part of the national debt issued in the relevant year; and if he will make a statement on the matter. [44536/12]
View answerThe data requested by the Deputy for the period 2012-2015 are set out in the table below. My Department’s current forecast horizon is to 2015 and so forecasts post 2015 are not published at present. The 2012 to 2015 forecasts are taken from the Stability Programme Update (SPU) published in April this year. The Deputy should note that my Department is currently updating its macroeconomic and fiscal forecasts and these updated figures will be published in the coming weeks.
Department of Finance Macroeconomic and Fiscal Projections 2012-2015 - as per April 2012 SPU
|
- |
2012 |
2013 |
2014 |
2015 |
|
Nominal GDP (rounded to nearest €25m) |
158,925 |
164,175 |
171,150 |
178,850 |
|
Real GDP Growth |
0.7 |
2.2 |
3 |
3 |
|
Nominal GNP (rounded to nearest €25m) |
124,650 |
127,575 |
132,050 |
136,975 |
|
Real GNP Growth |
-0.2 |
1.4 |
2.3 |
2.3 |
|
General Government Balance (rounded to nearest €5m) |
-13,115 |
-12,355 |
-8,140 |
-4,950 |
|
General Government Balance as % of GDP |
-8.3 |
-7.5 |
-4.8 |
-2.8 |
|
National Debt Interest Expenditure* (€ billions) |
6.1 |
7.0 |
7.6 |
8.0 |
|
National Debt Interest Expenditure as % of GDP |
3.9 |
4.2 |
4.4 |
4.5 |
|
National Debt - year-end estimate (€ billions) |
138.1 |
152.8 |
163.4 |
170.4 |
|
Implied Average Interest Rate |
4.8 |
4.8 |
4.8 |
4.8 |
Rounding may affect totals
*National debt interest expenditure excludes the sinking fund payment & debt management expenses. Together these three items make up total debt servicing expenditure.
As regards assumed average interest rates, having consulted with the National Treasury Management Agency (NTMA), I am of the view that it would be unwise to provide details regarding interest rate assumptions on new debt issuance as this could compromise the State’s ability to access funds at the most competitive rate possible.
However, it is possible to calculate an implied technical average interest rate by dividing the estimated national debt interest expenditure for the year in question by the average stock of national debt outstanding in that year. These implied average interest rates are shown in the table above.
205. Deputy Patrick Nulty asked the Minister for Finance if he will provide in tabular form a breakdown of the numbers of cars sold here in 2007, 2008, 2009, 2010, 2011 and the expected or most recent figure for 2012 in the categories pre-VAT cost of less than €50,000 and pre-VAT cost of greater than €50,000; the total VAT generated by cars sold in both of these categories for the requested years; and if he will make a statement on the matter. [44537/12]
View answerI am informed by the Revenue Commissioners that the statistical breakdown as requested in respect of cars sold is not available. However, statistics in respect of the Open Market Selling Price (OMSP) of new and used cars registered for Vehicle Registration Tax purposes, which are VAT inclusive, are as follows:
|
New Cars |
Less than €50,000 OMSP |
Greater than €50,000 OMSP |
Total |
|
2007 |
173,262 |
13,579 |
186,841 |
|
2008 |
142,151 |
9,797 |
151,948 |
|
2009 |
55,780 |
1,557 |
57,337 |
|
2010 |
87,501 |
1,711 |
89,212 |
|
2011 |
88,767 |
1,710 |
90,477 |
|
2012 (9 Mths) |
75,361 |
1,641 |
77,002 |
|
Used Cars |
Less than €50,000 OMSP |
Greater than €50,000 OMSP |
Total |
|
2007 |
58,435 |
1,104 |
59,539 |
|
2008 |
60,396 |
1,255 |
61,651 |
|
2009 |
48,696 |
377 |
49,073 |
|
2010 |
39,890 |
225 |
40,115 |
|
2011 |
40,607 |
202 |
40,809 |
|
2012 (9 Mths) |
29,716 |
232 |
29,948 |
In addition, the table below indicates the total estimated VAT receipts for cars in the requested years:
|
Year |
€ m |
|
2007 |
657 |
|
2008 |
541 |
|
2009 |
211 |
|
2010 |
272 |
|
2011 |
288 |
|
2012 |
232 |
Please note that the VAT receipts are estimated, as the VAT returns do not require the yield from a particular sector or sub-sector of trade to be identified and the actual VAT yield for each category cannot therefore be determined.
206. Deputy Patrick Nulty asked the Minister for Finance if he will provide in tabular form the total VAT on jewels and furs yielded here in 2007, 2008, 2009, 2010, 2011 and the expected or most recent figure for 2012; if he will also provide an estimate of the amount of additional revenue that the State would have received in 2010 and 2011 of the VAT rate on these items was 25%; and if he will make a statement on the matter. [44538/12]
View answerI am informed by the Revenue Commissioners that it is not possible to furnish figures of the VAT take from jewels and furs for the periods specified, as the information furnished on VAT returns does not require the yield from particular sectors of trade to be identified.
207. Deputy Olivia Mitchell asked the Minister for Finance if he will respond to requests for further compensation of those who set up a private pension and indirectly invested in a company now in liquidation (details supplied) in view of the fact that the Central Bank of Ireland apparently began monitoring the company from 2009 and the losses appear to have occurred after that date; if any other avenues of compensation are available to these persons who stand to lose a huge proportion of their pension and who can now only recover a maximum of €20,000 through The Investor Compensation Company Limited; and if he will make a statement on the matter. [44596/12]
View answerI understand that the Deputy is referring to Custom House Capital Limited; this company has been the subject of recent Parliamentary Questions.
The basic requirements for investor compensation schemes are laid down in the EU Investor Compensation Directive, which has been transposed into Irish law as the Investor Compensation Act 1998. The Directive, including the level of compensation across the EU, is currently being reviewed by all Member States at EU level. A formal Commission proposal, published in 2010, is still under negotiation.
The investor compensation scheme currently in operation in Ireland, is provided for in the Investor Compensation Act, 1998 and is operated by the Investor Compensation Company Limited. Apart from the pursuit of legal action against the firm concerned, there is no other avenue of compensation available to customers of the company.
I am advised by the Central Bank that where it was aware of information relating to client investments and had substantiated its concerns, it ensured that Custom House Capital advised affected clients and reviewed the information that was provided.
I am further advised that in July 2011 the Central Bank received new information, previously unknown, which increased concerns regarding the integrity of client investments. The Central Bank, at that stage sought the appointment of High Court Inspectors to fully investigate the affairs of the firm.
208. Deputy Denis Naughten asked the Minister for Finance the position regarding his Departments working group that was set up to examine the Irish Road Hauliers Association proposals for an essential user fuel rebate; the efforts he is taking to tighten up on the availability of green diesel; and if he will make a statement on the matter. [44600/12]
View answer209. Deputy Denis Naughten asked the Minister for Finance the steps that are being taken to address the laundering of fuel; the total capacity of laundering plants seized this year; the potential loss to the Exchequer of same; the estimated total annual cost of fuel laundering to the economy; and if he will make a statement on the matter. [44601/12]
View answer212. Deputy Mattie McGrath asked the Minister for Finance his plans to introduce a pay as you go system of taxation to assist road hauliers who are struggling to meet large taxation on their vehicles due to current market conditions; and if he will make a statement on the matter. [44631/12]
View answer213. Deputy Joanna Tuffy asked the Minister for Finance if he will consider the Irish Road Haulage Association’s proposal for the introduction of an EUR essential user fuel rRebate for the industry which proposal may increase revenue to the exchequer and could save many small and medium sized haulage companies from going into liquidation; and if he will make a statement on the matter. [44660/12]
View answerI propose to take Questions Nos. 208, 209, 212 and 213 together.
As the Deputies are aware a working group was set up between officials of my Department, the IRHA and members of the Oireachtas. This working group had a series of meetings to discuss issues of concern to the haulage industry including the matter of an essential users rebate. I have recently received a submission from the group and I am considering the matters raised.
On the matters of green diesel and fuel laundering, I am informed by the Revenue Commissioners that they are very conscious of the threat posed by the illicit trade in mineral oil products, and in particular by the laundering of markers from diesel. They have, therefore, made action against this criminal activity one of their priorities.
Enforcement action is taken at all stages of the fuel supply chain, targeting both those involved in laundering and those who sell laundered fuel, and notable successes have been achieved. Between 2010 and the present, 18 oil laundries and 583,000 litres of oil have been seized, along with oil tankers and other vehicles. In addition, some 1.3 million litres of illicit fuel have been seized, the large majority from retail outlets or in the course of delivery to such outlets. As well as this, the licensing regime for the sale of road fuels has been tightened up to make it more difficult for launderers to get their product onto the market. Revenue has undertaken a vigorous campaign to close unlicensed outlets and outlets that are not complying with licensing requirements. 32 filling stations were shut down in 2011 either because they didn’t have a licence or were in breach of licence conditions, and a further 24 have been closed to date this year.
I wish to inform the Deputy also that legislative action has been taken that will provide improved underpinning and support for action to control and supervise the fuel supply chain and in that way restrict the ability of launderers to source marked fuel for laundering and also restrict their ability to get their illegal product onto the market. As well as a strengthening of the licensing requirements for the sale of auto-fuel, a new system of licensing for the sale of marked fuels came into operation on 1 October. Revenue has power to refuse a licence where the applicant does not show to their satisfaction that any condition they may attach to the licence can be satisfied, and to revoke a licence if the holder fails to comply with any of its terms.
There will also, from the start of 2013, be a new requirement for all fuel traders to make monthly returns to Revenue detailing their fuel transactions. This will be an important new source of information on the fuel supply chain and will, for example, assist in the identification of unusual or suspicious patterns of activity.
In addition, the Revenue Commissioners are working closely with Her Majesty’s Revenue and Customs in the UK on the development of a more effective fuel marker. An Invitation to Make Submissions was issued jointly by the two organizations in June. This has generated considerable interest across a number of countries and I am advised that the indications are that a significant number of proposals will be submitted by the closing date of 30 November.
210. Deputy Jim Daly asked the Minister for Finance when he expects the interdepartmental working group that has been established in relation to the matter of compensation for businesses affected by the recent flooding in County Cork to conclude their report; when he will be in a position to make an announcement in relation to any such scheme. [44605/12]
View answerA report on the response to flooding in the Cork area on 28 June 2012 was presented to the Government Task Force on Emergency Planning at its meeting on 24 September 2012. The report was presented by the Department of the Environment, Community and Local Government. My colleague the Minister for the Environment, Community and Local Government has submitted a memorandum to the Government on the matter. Accordingly the matter is now under consideration by the Government.
211. Deputy Eamonn Maloney asked the Minister for Finance his views on the need to introduce legislation for trade in second hand tyres in view of the fact that some companies may operate without paying rates or VAT, have no waste management policy, operate on cash sales and often sell products that are not certified and are often of questionable quality. [44613/12]
View answerI 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. 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. In this regard, I am 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.
With regard to the operation of cash sales, the Deputy should be aware that a trader supplying goods is not required to register for VAT unless their annual turnover exceeds €75,000.
214. Deputy Éamon Ó Cuív asked the Minister for Finance the number of farmers that availed of the new stock relief incentive introduced in Budget 2012 to encourage farm partnerships; and if he will make a statement on the matter. [44676/12]
View answerThe stock relief for registered farm partnerships, announced in Budget 2012, is subject to a Commencement Order and State Aid approval. This relief is available to all farmers who participate in a registered farm partnership, defined as a milk production partnership within the meaning of the European Communities (Milk Quota) Regulations 2008. I am informed by Teagasc that they currently have 640 milk production partnerships on their register.
However, I am informed by the Revenue Commissioners that no information is available as yet on the actual number of applications for the new stock relief incentive for farm partnerships because this scheme will be applied for via the partnership’s tax return, and the returns for 2012 will not be submitted until 2013.
