Written Answers Nos. 150-171
150. Deputy Paul J. Connaughton asked the Minister for Finance if a person qualified for mortgage interest relief before the end of the year are they guaranteed it for the duration of the mortgage or a specified period or is the relief only available on the tranche of the mortgage drawn down before the year end 2012; and if he will make a statement on the matter. [54071/12]
View answerThe position is, as I stated in my Budget day speech on 6 December 2011, and on many occasions in this House since, that mortgage interest relief for principal private residences will no longer be available to house purchasers who purchase after the end of 2012 and will be fully abolished from 2018. Tax relief on interest paid on qualifying home loans taken out in the period 1 January 2004 to 31 December 2012 will continue up to and including the 2017 tax year. However, tax relief is not available on interest paid on loans taken out on or after 1 January 2013. This means that only the interest paid on monies drawn down on or before 31 December 2012 will qualify for tax relief. I have no plans to review this decision and I believe that more than adequate notice of this decision has been provided. As you will appreciate, I receive numerous requests for the introduction of new tax reliefs and the extension of existing ones. You will also appreciate that I must be mindful of the public finances and the many demands on the Exchequer given the current significant budgetary constraints. Tax reliefs, no matter how worthwhile in themselves, reduce the tax base and make general reform of the tax system that much more difficult.
151. Deputy Patrick Nulty asked the Minister for Finance the organisations he met in the preparation for budget 2013; the organisations that sought a meeting but had their request declined; and the reason for these decisions. [54078/12]
View answerIn advance of Budget 2013 I met, along with Minister Howlin, a number of representative organisations. These were IBEC, ICTU, the IFA, the ICMSA, the Construction Industry Federation and the Community and Voluntary Pillar. The Pillar, as the Deputy will be aware, comprises seventeen separate organisations. In addition, I met with other organisations including the Vintners' Federation of Ireland, the Irish Road Haulage Association, Retail Ireland, the Consultative Committee of Accountancy Bodies - Ireland and Property Industry Ireland.
In the run-up to the Budget I have received to date some 540 Pre-Budget Submissions from a wide variety of groups and individuals. Many of these have suggested a meeting either with me or with my officials. Even allowing for some duplication amongst the Submissions, the Deputy will appreciate that it would be impossible to organise meetings on this scale and it is a question of arranging to meet a representative selection of organisations. However, all Pre-Budget Submissions received are recorded and distributed as appropriate, both in my Department and in the Department of Public Expenditure and Reform, so that their content may be considered by the relevant officials in the context of Budget preparation.
152. Deputy Pearse Doherty asked the Minister for Finance the revenue that would be raised for the Exchequer by increasing the universal social charge by 3% on income in excess of €100,000; and what the impact would be on the average effective tax rate of earners between €100,000 and €200,000. [54083/12]
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 effect of the suggested change on effective tax rates of income tax and USC would vary depending on the income level, ranging from increases of approximately 0.14% at €105,000 to 1.5% at €200,000. The overall average increase in the effective rate for the income range €100,000 to €200,000 is ultimately decided by the distribution of income earner numbers in the range. As the population distribution is predominantly skewed towards the lower end of that income range the overall average increase in the effective rate emerges as 0.3%. 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.
153. Deputy Pearse Doherty asked the Minister for Finance the revenue that would be raised for the Exchequer by reducing the pension related earnings cap to €70,000 and reducing the marginal rate of tax relief for private pensions to 30%. [54084/12]
View answerI assume that the Deputy is referring to the current annual earnings cap of €115,000 which operates to limit the level of tax-relieved personal pension contributions in any one year. The annual earnings cap acts, in conjunction with age-related percentage limits of annual earnings, to put a ceiling on the annual amount of tax relief an individual taxpayer can obtain on pension contributions. A breakdown of the cost of tax relief on employee contributions to occupational pension schemes is not available by income tax rate, as tax returns by employers to the Revenue Commissioners of employee contributions to such schemes are aggregated at employer level. An historical breakdown is available by tax rate of the tax relief claimed on contributions to personal pension plans — Retirement Annuity Contracts (RACs) and Personal Retirement Savings Accounts (PRSAs) — by the self-employed and others, to the extent that the contributions have been included in the personal tax returns of those taxpayers. There is, therefore, only a limited statistical basis for providing definitive figures. However, by making certain assumptions about the available information, the Revenue Commissioners inform me that the combined estimated full year yield to the Exchequer from reducing the current annual earnings cap of €115,000 to €70,000 and confining tax relief to the standard rate of 30% in respect of individual contributions to occupational pension schemes, RACs and PRSAs would be about €330 million.
154. Deputy Pearse Doherty asked the Minister for Finance the revenue that would be raised for the Exchequer by introducing a levy of 10% on alcohol sales in off licences. [54085/12]
View answerI understand from the Revenue Commissioners that EU Directive 92/ 83 - EEC, which governs the structure of alcohol taxation, does not provide for different tax treatment of alcohol products depending on where the product is sold. Therefore, it does not allow for the introduction of such a levy.
155. Deputy Pearse Doherty asked the Minister for Finance the revenue that would be raised for the Exchequer if the practice of below cost selling of alcohol was outlawed, a practice which sees VAT lost to the State. [54086/12]
View answerWith regard to the VAT treatment of below cost selling, VAT is a tax on the value added to a supply, and the collection and recovery of VAT takes place at each stage of the chain of supply from manufacturing to retailer. 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. Consequently, if there is a decrease in value at any stage in the process the trader is entitled to a refund of the excess of VAT incurred over that collected. In this case, where a retailer is in a situation of net VAT gain as a result of below cost selling, this is not a loss to the Exchequer or an additional benefit to the retailer, it is merely how VAT is charged.
As regards calculating the VAT impact of below cost sales of alcohol, separate figures are not available for input VAT on goods that were subsequently sold at a discount as traders’ VAT returns show only the total input VAT and the total output VAT for the period covered by the return.
156. Deputy Pearse Doherty asked the Minister for Finance the revenue that would be raised for the Exchequer if a junk tax was introduced. [54087/12]
View answerThe Deputy will be aware that the Minister for Health established a Special Action Group on Obesity (SAGO) to examine and progress a number of issues to address the problem of overweight and obesity, particularly in children. I understand that SAGO are calling for consideration to be given to taxation measures being applied to all foods and drinks high in fat and sugar. A detailed assessment would need to be carried out prior to the introduction of a junk tax or a more targeted tax on sugar sweetened drinks. This assessment would need to consider the possible impact a tax of this nature would have on employment, the less well off, cross border trading in the absence of a similar measure being introduced in the UK. In the absence of this assessment I am unable to advise the Deputy the revenue that would be raised for the Exchequer if one were to be introduced.
It should be noted, however, that the Danish Government has recently announced it is withdrawing the saturated fat tax it introduced in 2011, citing higher prices to consumers, higher administration costs, putting Danish jobs at risk, and an increase in cross-broder purchases as reasons for its withdrawal. It also said it intends to cancel the planned sugar tax.
157. Deputy Pearse Doherty asked the Minister for Finance the revenue that would be raised for the Exchequer if the duty rates between agricultural fuels and motor fuels were equalised with a reclaim system for agricultural fuel users. [54088/12]
View answerIt is assumed that the Deputy’s question envisages a movement away from the current system of marking of oil to which a reduced rate of tax applies to one in which certain users, who currently use marked oil tax paid at a reduced rate for specific uses, would instead be given refunds of part of the mineral oil tax paid by them in respect of fuel used for non-auto purposes. No additional revenue would accrue to the Exchequer as a result of such a system because any additional revenue raised would be subject to reclaim by eligible users. While it might be expected that the net mineral oil tax raised from the users concerned would be neutral, this might not be the case in practice as the risk of abuse and fraud might be greater than is the case with the existing system. A change of this kind would also require the establishment of an extensive repayments system, which would give rise to a significant additional administrative burdens and costs for oil traders, users and the Revenue Commissioners. It would also impose significant cash-flow costs on those currently using marked oil for certain purposes, including agriculture.
158. Deputy Pearse Doherty asked the Minister for Finance the revenue that would be raised for the Exchequer if capital gains tax was increased to 35%. [54089/12]
View answerI am advised by the Revenue Commissioners that the full year yield to the Exchequer, estimated in terms of expected 2013 gains, from increasing the CGT tax rate from 30% to 35% could be in the region of €80 million. This figure includes corporate gains. However, this estimate assumes no behavioural changes on the part of taxpayers, and increases in rates may have a significant behavioural impact and may not produce a corresponding increase in tax yield. In current economic conditions any estimate of additional yield must be treated with caution. In addition, increasing the rate could, in theory, lead to a reduction in yield from the tax.
159. Deputy Pearse Doherty asked the Minister for Finance if it is possible to control tobacco prices in the same way as energy prices are controlled; if implementing such controls would change the proportion of the retail price of tobacco that would go to the Exchequer, as outlined by health groups; and if such a policy has the potential to raise a minimum of €100 million in the first year of its introduction. [54090/12]
View answerI assume the Deputy to refer to the proposal to introduce a price cap of the pre-tax price of tobacco. Preliminary advice on this suggests that any proposal to interfere with the ability of manufacturers to set the maximum price level for tobacco is a breach of Council Directive 2011/64/EU on the structure and rates of excise duty applied to manufactured tobacco. In the circumstances, therefore, I am not in a position to outline potential revenue that could be raised.
160. Deputy Pearse Doherty asked the Minister for Finance the cost to the Exchequer of extending mortgage interest relief for first time buyers for an additional 12 months, subject to an annual maximum of €2,000. [54091/12]
View answerIt is assumed that the annual maximum of €2,000 mentioned in the question relates to a limit in terms of tax relief. On that basis, I am informed by the Revenue Commissioners that the full year cost to the Exchequer of extending mortgage interest relief for new first time buyers in 2013, subject to that annual maximum, would be of the order of €3.3 million.
161. Deputy Aodhán Ó Ríordáin asked the Minister for Finance if he will ensure that the nominee for the position of credit union regulator has credit union as well as banking experience; that he or she understands the ethos of the credit union movement and is comfortable with the concept of volunteerism; and if he will make a statement on the matter. [54094/12]
View answerMs. Sharon Donnery was appointed as the Registrar of Credit Unions on 23 November 2012 and will take up her new position on 1 February 2013. Ms. Donnery joined the Central Bank in 1996 as an economist and has held a number of management positions in the Central Bank. She has been in her current role as Head of Division within the Central Bank’s Consumer Protection Directorate for almost three years where she has gained significant experience in dealing with consumer and regulatory issues and mortgage arrears. Ms. Donnery has chaired the European Banking Authority’s Sub-Group on Consumer Protection since its establishment in early 2011. She is also the vice-chair of the EBA’s Standing Committee on Consumer Protection and Financial Innovation. Ms Donnery will bring a range of regulatory knowledge and experience to the position and her strong consumer protection background will be fundamental to this important role.
162. Deputy Paschal Donohoe asked the Minister for Finance if he will consider making provision for those first-time home buyers who are in the middle of purchasing but are unlikely to have the deal closed by 31 December to receive the additional mortgage interest relief, as provided for in budget 2012; and if he will make a statement on the matter. [54258/12]
View answerThe position is, as I stated in my Budget day speech on 6 December 2011, and on many occasions in this House since, that mortgage interest relief for principal private residences will no longer be available to house purchasers who purchase after the end of 2012 and will be fully abolished from 2018. This means that a loan will have to be drawn down on or before 31 December 2012 in order to qualify for this relief. I have no plans to review this decision and I believe that more than adequate notice of this decision has been provided. As you will appreciate, I receive numerous requests for the introduction of new tax reliefs and the extension of existing ones. You will also appreciate that I must be mindful of the public finances and the many demands on the Exchequer given the current significant budgetary constraints. Tax reliefs, no matter how worthwhile in themselves, reduce the tax base and make general reform of the tax system that much more difficult.
163. Deputy Michelle Mulherin asked the Minister for Finance if the Revenue Commissioners are now pursuing a policy of shutting down licensed premises without any leeway when intoxicating liquor licences have not been renewed on time; if a list of licensed premises has been prepared for this purpose; and if he will make a statement on the matter. [54323/12]
View answerI am informed by the Revenue Commissioners that under the Licensing Acts 1833 to 2010, an Intoxicating Liquor licence is granted by the Courts, administered by Revenue and regulated by An Garda Siochana. While unlicensed activities are treated very seriously by all of these bodies, their functions in regard to this matter differ. The issue of “shutting down premises” where a licence has not been renewed on time, or indeed any other breach of the Licensing laws, is a matter for An Garda Siochana. Revenue does not have power to shut down an unlicensed premise that sells intoxicating liquor. However, Revenue does have the authority to instigate Court proceedings for unlicensed trading when they detect such activity. Where a relevant Court is satisfied that such proceedings are valid then the normal outcome is that a monetary fine will be imposed on the person who engaged in the unlicensed trading. The Courts also have the power to direct for endorsement, temporary closure, or forfeiture in the case of repeated offences.
I am further advised by the Revenue Commissioners, that their compliance strategies are based on addressing the areas of greatest risk to the Exchequer. The Revenue Commissioners have a compliance programme in this area, which systematically targets and addresses unlicensed premises and those publicans that fail to renew their licences.
164. Deputy Jerry Buttimer asked the Minister for Finance the amount of tax repaid under the retirement relief for certain sportspersons in each year since 2000; if he will provide a breakdown for each sport; and if he will make a statement on the matter. [54333/12]
View answerThe scheme which provides that qualifying sportspersons, whether in a professional or semi professional capacity, are entitled, on retirement, to income tax relief was introduced in Finance Act 2002. I am informed by the Revenue Commissioners that information on the estimated cost to the Exchequer of the tax relief on retirement for qualifying sportspersons is set out in the following table for the income tax years 2003 to 2010 inclusive. 2010 is the latest year for which the necessary detailed data is available.
Retirement relief for Qualifying Sportspersons
|
Year |
Estimated cost to the Exchequer €m |
|
2003 |
0.1 |
|
2004 |
0.2 |
|
2005 |
0.3 |
|
2006 |
0.2 |
|
2007 |
0.2 |
|
2008 |
0.2 |
|
2009 |
0.2 |
|
2010 |
0.3 |
Any claims which may have been received for years prior to 2003 are dealt with separately and the amounts involved are not centrally recorded. There is, therefore, no basis on which to provide the information requested in respect of those applications.
I am informed by the Revenue Commissioners that information on tax relief on retirement for qualifying sportspersons is not captured in such a way as to provide a basis for compiling a breakdown of the estimated cost of the relief by reference to sports code. Even if such a breakdown was available the obligation of the Revenue Commissioners to observe confidentiality in relation to the tax affairs of individual taxpayers or small groups of taxpayers would preclude them from providing it.
165. Deputy Michelle Mulherin asked the Minister for Finance if incentives in relation to Shannon Airport will be included in or are being considered for the budget 2013 or the forthcoming Finance Bill; if so, if he will confirm that these will not have an adverse competitive impact on Ireland West Airport Knock; and if he will make a statement on the matter. [54337/12]
View answer166. Deputy Michelle Mulherin asked the Minister for Finance if discussions have taken place with the EU authorities in relation to any potential incentives at Shannon Airport and the EU's response to same; and if he will make a statement on the matter. [54340/12]
View answerI propose to take Questions Nos. 165 and 166 together.
As the Deputy is aware, items that may or may not be included in the Budget are never commented on in advance. Therefore, I cannot respond on the issue of incentives relating to airports.
167. Deputy Michelle Mulherin asked the Minister for Finance if he will direct the Revenue Commissioners to change their policy of requiring a 40% down payment of tax from a taxpayer in advance of agreeing to accept payment of the taxpayer's tax liability by instalments in view of the increasing number of publicans who are not in a position to get their tax clearance certificate in order to renew their intoxicating liquor licences as they cannot come up with the 40% tranche in one payment and are unable to get a loan from the banks and are now faced with the shutdown of their businesses; and if he will make a statement on the matter. [54380/12]
View answerThe Revenue Commissioners are charged with responsibility for the timely collection and recovery of a range of taxes and duties due to the Exchequer. Revenue has a clear focus on making sure that every person and business complies with the requirement to file the relevant returns and to pay the appropriate tax or duty on a timely basis. That is an appropriate and correct focus for Revenue and one that I fully endorse. Delays in the collection of tax revenues properly due, adds to the level of Government borrowing and public debt interest and confers an unfair competitive advantage on non-compliant businesses.
I am advised by Revenue that tax clearance certificates automatically issue to individuals or businesses that are tax compliant. In circumstances where there are compliance problems in regard to the timely payment of tax then tax clearance certificates are not automatically renewed. In cases where payment of a tax debt in a single lump sum is demonstrably not possible for an individual or business and a tax clearance certificate is required, then the individual or business should contact Revenue and negotiate a mutually acceptable phased payment arrangement. A phased payment arrangement is a concession and must be fully justified to Revenue with reference to the specific circumstances of the individual taxpayer or business. In such phased payment situations where tax clearance is required, a down payment of at least 40% of the debt is normally requested. However, I am informed by Revenue that this level of down payment can be reduced on a case by case basis depending on the particular circumstances of the case and the willingness of the taxpayer or business to engage with Revenue to satisfactorily address the outstanding tax debt and to restore timely compliance as quickly as possible.
I know that Revenue is conscious of the difficult economic and financial climate that prevails and how this can pose challenges for businesses and individuals in being timely compliant. Revenue has responded to the difficult environment by encouraging businesses experiencing particular payment difficulties to work proactively with them when such difficulties start to arise in order to find an agreed way through those difficulties and quickly restore voluntary timely compliance. Revenue has, for example, published material for businesses experiencing tax payment difficulties on its website at www.revenue.ie. I commend Revenue for the work that it has done in that regard and in the practical support and assistance it is providing to viable businesses. I am aware that tax practitioners and representative bodies have recognised Revenue’s efforts in this regard also.
168. Deputy Sean Fleming asked the Minister for Finance his plans to abolish stamp duty in event of a property tax being introduced; and if he will make a statement on the matter. [54402/12]
View answerThe Government has no plans to abolish Stamp Duty on transfers of residential property. Stamp Duty on property transactions co-existed with domestic rates before their abolition in 1978; and in many jurisdictions (including those with similar legal systems, such as the UK and the USA, and those with similar sized property markets, such as Denmark and the Netherlands) an annual residence related charge co-exists with a transactions-based tax which operates in a similar manner to Stamp Duty. The Deputy will note that the rate of Stamp Duty on the vast majority of residential properties is 1% compared to a rate of 9% as recently as 2010.
169. Deputy Sean Fleming asked the Minister for Finance if he will include the tyre industry in the list of businesses that trade in cash which are to be targeted on the basis of compliance with Revenue and other standards; and if he will make a statement on the matter. [54540/12]
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. It is the role of Revenue to ensure that all businesses, regardless of the type of activity they are engaged in, are registered for the appropriate taxes and duties, and that they fulfill their obligations with regard to the filing of returns and the payment of taxes. Revenue has a strong focus on cash businesses, given their potential high-risk nature. Revenue uses a wide range of approaches 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, aspect queries on specific compliance issues as well as full audits and, where warranted, prosecutions.
I am further advised by the Commissioners that, specifically regarding the retail and wholesale motor vehicle parts and accessories sector (which includes the tyre distributor industry), 25 Audits have been carried out to the end of October 2012, yielding €407,063. In 2011, 37 audits were carried out in this sector, with a yield of €483,070.
The Commissioners also advise that their 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. In addition, the Revenue Commissioners advise that they hold meetings with trade and representative bodies through The Hidden Economy Monitoring Group where the risks posed by shadow/hidden economy activities are evaluated. Furthermore, the Commissioners advise that they are willing to meet with any party interested in passing on specific insights into tax evasion, and that all such information received will be followed up on, but for reasons of confidentiality Revenue will not be in a position to provide any specific feedback on information received.
The Deputy should also note that changes are frequently made in tax legislation aimed at counteracting shadow economy activity. Two recent examples are the introduction of a more robust Relevant Contracts Tax regime and an enhanced penalty regime for employers who fail to operate PAYE regulations fully.
171. Deputy Mary Lou McDonald asked the Minister for Education and Skills the annual pension in payment paid to a former assistant chief inspector of his Department (details supplied). [53768/12]
View answerThe information sought by the Deputy is personal information and its disclosure would amount to a breach of the Data Protection Act and therefore I cannot supply the information as requested. The official concerned retired as an Assistant Chief Inspector on the 29th, February 2012 and his pension and lump sum calculations were based on the 1st, September 2008 payscales. Details of the payscale and the calculation methods are as follows subject to a maximum of forty years service:
- Assistant Chief Inspector Payscale 1/9/2008: € 96,538; €98,846; €101,166; €103,469; €105,199; €108,556 (LSI 1); €111,912 (LSI 2).
- Pension Calculation: Final Salary X Years service / 80.
