Arthur Spring
Question:92. Deputy Arthur Spring asked the Minister for Finance if he will provide a list of all public consultations his Department has carried out since the start of 2012. [50751/12]
View answerDepartmental Consultations
Questions (92)
Written answers
Consultations are taken as a matter of course within the Department with industry groups, professional bodies, trade unions and social partners. I will set out the consultations that have taken place since the beginning of the current year. On foot of the Mazars report on SME lending demand, and in order to understand the situation on the ground and stimulate further ideas to get movement from the bottom up, a series of seven regional meetings with local representatives, including the banks and small business representatives, was undertaken, hosted by the Minister of State with responsibility for small business, Deputy Perry, supported by Mr. John Moran, who is the Secretary General of the Department of Finance. These meetings took place between February and April. The aim of the meetings was to examine further the actions which might be taken to improve access to credit for SMEs. A report on these meetings was published on 5 July on my Department’s website, at www.banking.finance.gov.ie/presentations-and-latest-documents. The Financial Services Division had a consultation on the SEPA end date regulation in March 2012 and on the Credit Institutions Resolution Fund Levy in July 2012. Further information is available at www.finance.gov.ie/documents/publications/consultation2012/sepaconsult.pdf and at www.finance.gov.ie/viewdoc.asp?DocID=-1&CatID=77&UserLang=EN&m=31. The Fiscal Policy Division has had consultations on the following:
1. Public consultation on Review of Section 481 Film Tax Relief. Consultation paper was published by the Minister on 28 May 2012. Submission Deadline was 31 August 2012.
2. The Tax Implications of Appointing a Receiver - July 2012
3. Public Consultation on Tax Residence Rules - 1 May 2012 to 1 August 2012
4. Public consultation on Donations to Approved Bodies - 8 February 2012 to 11 May 2012.
A list of all public consultations carried out by the Tax Policy Unit of my Department and EU originated consultations can be viewed on my Department’s tax policy website, www.taxpolicy.gov.ie.
European Banking Sector
Questions (93, 94, 104)
Bernard Durkan
Question:93. Deputy Bernard J. Durkan asked the Minister for Finance arising from his recent discussions with fellow Ministers within the eurozone, if there is specific recognition of the need to ensure a Europe-wide regime and agreement in respect of debt repayment which recognises the need for each member State to be treated equally and that repayment terms and conditions are not such as to inflict long-term damage on programme countries; and if he will make a statement on the matter. [50795/12]
View answerBernard Durkan
Question:94. Deputy Bernard J. Durkan asked the Minister for Finance if there is a general acceptance throughout the EU and particularly the eurozone of the need to encourage economic recovery by way of improved terms in respect of interest and the period within which borrowings can be repaid as opposed to current expectations; and if he will make a statement on the matter. [50796/12]
View answerBernard Durkan
Question:104. Deputy Bernard J. Durkan asked the Minister for Finance if at EU level, having regard to his discussions with his EU and eurozone colleagues, there is a recognition by each member state of the Union and within and without the eurozone for the need for a co-ordinated unified approach to economic and fiscal issues throughout the European Union as opposed to the tendency to impose increasing burdens in terms of conditions and interest repayments arising from debt relief; and if he will make a statement on the matter. [50807/12]
View answerWritten answers
I propose to take Questions Nos. 93, 94 and 104 together.
European Union Member States, in general, and euro area Member States, in particular, are obliged, under the treaties, to treat each others’ economic and financial affairs as matters of common interest. Further, Member States have committed themselves to undertake measures necessary to correct harmful imbalances. In a consultative process, typically a co-ordinated and unified approach emerges naturally and extends to economic and fiscal issues. This is also in the interest of even-handedness. While I cannot speak for each and every Member State, the need and desire to protect the common EU and euro area good is felt generally. This includes reducing fiscal deficits and consolidating debt with an aim to reducing the high interest rates resulting from high levels of indebtedness. Since the onset of the financial crisis and the subsequent entry of Greece, Ireland and Portugal into Programmes of Financial Assistance, the EU and the eurozone have taken measures to reduce the cost of programme funding.
The interest rates on EU funding mechanisms (the EFSF and EFSM) were reduced significantly in 2011 and are now provided at rates close to the cost of funding. These rates apply equally to all countries availing of these mechanisms. The maturities of these loans were extended at the same time. For example, the Euro Area Heads of State or Government agreed on 21 July 2011 to reduce the cost of the European Financial Stability Facility (EFSF) to interest rates equivalent to those of the EU Balance of Payments facility i.e. close to, without going below, the EFSF's cost of funding. Lengthening of maturities provides benefits in terms of phasing of loans and ensuring that the profile of redemptions is more orderly, avoiding as far as possible exceptionally large amounts in particular years. By contrast, money borrowed at longer maturities is generally more expensive. However, on balance, savings arising from maturity extension are significant though complex to calculate. The interest rate reductions for the EFSF and the EFSM have also been reflected in the rates charged on Ireland's bilateral loans from the UK, Sweden and Denmark.
As noted above, our EU programme funding is being provided at, or close to, the cost of funds for the lenders. The scope for further changes to our programme interest payments is therefore very limited. However, we are also seeking ways to alleviate the burden on the sovereign of assisting the banking sector. Arising out of the 29 June 2012 statement by the Euro Area Heads of State or Government that "it is imperative to break the vicious circle between banks and sovereigns", work is continuing at a technical level to put in place the single supervisory mechanism and the European Stability Mechanism’s direct banking recapitalisation facility at the earliest possible date. In short, every effort has been and is being made at EU and eurozone level to ensure the burden placed on Programme countries is reduced in order to support the success of their programmes.
Tax Yield
Questions (95)
Bernard Durkan
Question:95. Deputy Bernard J. Durkan asked the Minister for Finance the areas in respect of which Revenue for the current to date is not up to expectations; those sectors which have exceeded expectations or have shown greater potential for the future; the extent to which he can expect to see any improvement in performances where necessary in the coming year; and if he will make a statement on the matter. [50797/12]
View answerWritten answers
As detailed in the supplementary information published with the end-October Exchequer statement on 2 November, income tax, VAT, corporation tax, stamp duty and capital gains tax are all ahead of profile. Excise duty, capital acquisitions tax and customs duty are behind profile. The supplementary information contains a table which shows the exact performance of each tax head, both compared to profile and as a year on year basis, and on both a monthly and cumulative basis. It is encouraging that three of the big four tax sources of revenue are ahead of expectations at end-October. As outlined in the medium-term fiscal statement published yesterday, the Department of Finance is of the view that tax revenues for the year as a whole will be broadly in line with profile, with the possibility of a marginal surplus, of the order of €0.2 billion (0.5%) being recorded. Much will depend on the performance of tax revenues in November. It is the most important month of the year for income tax and corporation tax and it is also the last VAT “due” month of the year. All told, close to €5.7 billion or 16% of the total tax expected this year is profiled for collection in the month. Good performances are required from each of these three taxes if the annual aggregate target for taxes is to be achieved. As regards 2013, we expect that the minor 2012 tax revenue surplus will have beneficial impacts for the base going into next year which will largely offset the negative impact of weaker economic growth.
Job Initiatives
Questions (96)
Bernard Durkan
Question:96. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which incentives or inducements will be provided to encourage those with substantial savings to invest in job creation; and if he will make a statement on the matter. [50798/12]
View answerWritten answers
It is a long-standing practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions. However, I draw the Deputy’s attention to the following existing incentives in the tax code to encourage individuals to invest in schemes which can lead to job creation:
The Employment and Investment Incentive (EII)
The EII is a tax incentive that provides tax relief for investors who purchase new ordinary shares in small and certain medium-sized companies carrying on a trade, and who hold those shares for a minimum of three years. The incentive is designed to help companies to raise new risk capital to expand their activities. An individual investor can obtain income tax relief on investments up to a maximum of €150,000 per annum, subject to the high income individuals restriction, in each tax year up to 2013. The maximum amount that may be raised by a company in any 12-month period is €2.5 million, subject to a lifetime limit of €10 million. The maximum rate of tax relief available to an individual who subscribes for new ordinary shares is 30% of the amount invested. A further 11% tax relief may be available at the end of the holding period, however, provided the company concerned has either increased its number of employees or spent at least 30% of the investment raised on research and development.
The Seed Capital Scheme (SCS)
The SCS provides that an employee, who leaves employment and invests by means of shares in a qualifying new venture, may claim a refund of income tax paid in previous years. An unemployed person may also avail of this facility. The maximum investment that can be set against taxable income in any year of assessment is €100,000. This means that the maximum total investment that can be made under the Seed Capital Scheme is €600,000, as the individual may set up to €100,000 against the taxable income of each of the previous six years. By way of example, an individual who invests €10,000 under the scheme would be entitled to a refund of income tax already paid of €4,100 provided they had paid income tax at the higher rate in the relevant tax year.
Film Relief (Section 481)
The film relief scheme was introduced to promote the Irish film industry, by encouraging investment in Irish made films. Tax relief on the full amount of the investment is available to individual investors at their marginal rate of tax (41% for top rate taxpayers). Individual investors can invest up to €50,000 under the scheme in any year of assessment. The maximum amount which can be raised by a film production company, under the scheme is 80% of the total cost per production, subject to a maximum of €50,000,000.