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Thursday, 17 Jan 2013

Written Answers Nos. 20-29

Bank Debt Restructuring

Questions (20)

Martin Ferris

Question:

20. Deputy Martin Ferris asked the Minister for Finance the position regarding the €3.1 billion bond to be redeemed with the Bank of Ireland in April 2013, specifically, when the bond will be redeemed and the way it will be treated for accounting purposes on the State's balance sheets [1794/13]

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Written answers

As the Deputy is aware, the Irish Government bonds acquired by IBRC in settlement of the second instalment due on the IBRC promissory notes have a stated maturity date of 13 March 2025 at which point it is envisaged they will be repaid by the State for cash with the resulting balance sheet impact. These bonds have been used by IBRC as collateral for a securities repurchase transaction with Bank of Ireland. As the Deputy is also aware, this repurchase agreement between Bank of Ireland and IBRC was a commercial transaction, which was approved by Bank of Ireland’s shareholders on 18 June 2012. Essentially Bank of Ireland purchased this Irish Government bonds acquired by IBRC and IBRC has an obligation to repurchase the bonds upon maturity from Bank of Ireland not later than 364 days after the purchase date, which was 20 June 2012.

This maturity and the resulting funding requirement will be considered by IBRC as part of its ongoing funding and liquidity management activities.

Personal Insolvency Act

Questions (21)

Éamon Ó Cuív

Question:

21. Deputy Éamon Ó Cuív asked the Minister for Finance the discussions he has had with covered banks regarding the operating guidelines they will apply in respect of implementing the terms of the Personal Insolvency Bill; and if he will make a statement on the matter. [2027/13]

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Written answers

The Deputy will be aware that the Personal Insolvency Act was signed into law by the President on the 26 December 2012. The Act will now be subject to a commencement order by the Minister for Justice, Equality and Defence.

It will be a matter for the covered banks, and indeed for all relevant creditors, to engage with any proposal made by a debtor under the debt resolution frameworks provided in the Personal Insolvency Act. However, decisions on such proposals will be a matter for individual creditors. In respect of the covered institutions, under the Relationship Framework Agreements I have with the covered banks, responsibility for commercial policy and day to day operations remains with the Boards and management of the banks and I do not have any involvement in such decisions. However, in any engagement with the covered banks, I have pointed out the importance and necessity to the banks to appropriately implement legislation enacted by the Oireachtas.

In addition, the Central Bank has informed me that as part of its on-going engagement with all mortgage lenders on their Mortgage Arrears Resolution Strategies (MARS), lenders have been reminded of the importance of considering the impacts of the Personal Insolvency Act on their respective strategies. Work in this area will continue in 2013.

Legislative Programme

Questions (22)

Pádraig MacLochlainn

Question:

22. Deputy Pádraig Mac Lochlainn asked the Minister for Finance further to his announcement of introducing legislation to give effect to Real Estate Investment Trusts, if he will provide a timetable for the introduction of legislation and related regulations. [1780/13]

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Written answers

It is intended that legislation giving effect to Real Estate Investment Trusts (REITs) will be introduced through Finance Bill 2013.

Tax Yield

Questions (23)

Richard Boyd Barrett

Question:

23. Deputy Richard Boyd Barrett asked the Minister for Finance if he will provide the most up to date figures on corporate profits declared and corporate taxes paid for 2011 and 2012 with a detailed break-down in the application of allowances, deductions and write-downs applied to declared profits, reducing the total corporate tax liability; and if he will make a statement on the matter. [1932/13]

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Written answers

I am informed by the Revenue Commissioners that most recent data available in relation to corporation tax returns is in respect of 2010. In that regard, I would refer the Deputy to my reply to Parliamentary Question number 1739/13 which was answered on Wednesday, 16 January 2013 in which I provided the available information requested.

Property Taxation Collection

Questions (24, 64)

Martin Ferris

Question:

24. Deputy Martin Ferris asked the Minister for Finance if additional staff are being allocated to the Revenue Commissioners to implement the proposed local property tax; and if not, his views on whether Revenue Commissionsers have sufficient personnel to deal with the new tax or if current staff are being redirected from other activities, such as auditing, to the property tax section. [1795/13]

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Gerry Adams

Question:

64. Deputy Gerry Adams asked the Minister for Finance the number of whole time equivalents currently employed at the Revenue Commissioners; and the number of whole time equivalents that will be working exclusively on the valuation, collection and enforcement of the property tax. [1775/13]

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Written answers

I propose to take Questions Nos. 24 and 64 together.

I previously advised the House in my reply to Question no. 57388/12 that the Revenue Commissioners would be resourced to ensure the successful implementation of the tax. The additional resources required for 2013 are noted in the Department of Public Expenditure and Reform Expenditure Report 2013. The Estimate cost for implementation of Property Tax in 2013 is €25.9 million. In line with standard costs associated with administering and collecting taxes, it is expected that Administrative Budget provisions equivalent to 2% of the annual property tax yield will be required in 2014 and 2015, decreasing to 1% after 2015.

I am advised that the Revenue Commissioners have a total of 5734 full time equivalent staff serving out of a new Employment Control Framework number of 5874 FTEs. I am advised that the Commissioners are actively seeking to fill the vacant posts mainly by way of redeployment, but it is proving to be a slow process.

The ECF includes 100 additional posts approved by my colleague the Minister for Public Expenditure and Reform in the context of the introduction of Local Property Tax. The deployment of resources to administer the new tax is a matter for the Revenue Commissioners who advise me that many aspects of the tax will be embedded into their existing divisions, such as legislation, IT, the Collector General, the Accountant General etc. At this stage, it is not possible to be precise about the number of FTEs which will be exclusively involved in the administration of the tax on an ongoing basis, however the Commissioners estimate that across all functions, it will range from 200 up to 400 at peak times. This may include up to 50 Temporary Clerical Officers. In addition, the Commissioners will contract for external service delivery of some data capture and call centre services.

The Commissioners further advise me that they have established the nucleus of the Local Property Tax Branch in Ennis, where staff are likely to become available for redeployment in the context of the Government's policy on shared services, specifically in the areas of payroll, banking and financial management. The Commissioners are deploying additional staff to this Branch by reconfiguring their district structure in the South West and relocating functions from Clare to Limerick. I am satisfied that if Revenue receives the additional 100 staff which were sanctioned in 2013, they will be in a position to prioritise their resources to ensure the successful implementation of Local Property Tax.

Finally, I would like to clarify that the Revenue Commissioners will not be involved as a matter of routine in valuing properties for LPT purposes. LPT is a self-assessment tax so in the first instance it is a matter for the property owner to calculate the tax due based on his or her assessment of the chargeable value of the property. Revenue is preparing valuation guidance and developing tools to assist liable persons in assessing the value of their property.

Tax Reliefs Application

Questions (25)

Dessie Ellis

Question:

25. Deputy Dessie Ellis asked the Minister for Finance if he will set out by year for 2010, 2011 and 2012, the total of any tax allowance clawbacks sought and the total actually obtained by the Revenue Commissioners pursuant to Section 23 of Chapter 11 of Part 10 of the Taxes Consolidation Act, 1997. [1787/13]

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Written answers

I assume the Deputy is referring to the clawback of tax relief associated with rented residential accommodation if the property ceases to qualify within the 10 year holding period. I am informed by the Revenue Commissioners that the relief is withdrawn by treating the relief already used as rent received in the period in which the property ceased to be a qualifying property. It is not possible to separately identify the amount of rent returned on the tax returns associated with this clawback and therefore the information requested by the Deputy cannot be provided.

NAMA Operations

Questions (26, 39)

Micheál Martin

Question:

26. Deputy Micheál Martin asked the Minister for Finance the amount of the project finance to be advanced by the National Assets Management Agency that has been drawn down to date; the nature of the projects funded; the expected drawdown by the end of 2013; and if he will make a statement on the matter. [2016/13]

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Sandra McLellan

Question:

39. Deputy Sandra McLellan asked the Minister for Finance further to the publication of the IMF staff report in December 2012 which commented that the National Assets Management Agency’s investment of €2bn would be back-loaded to the end of the four year period ending in 2016, the rationale for this approach in view of the immediate economic situation and the anticipated effect of NAMA’s investment on employment and economic activity. [1779/13]

View answer

Written answers

I propose to take Questions Nos. 26 and 39 together.

I am advised by NAMA that it is currently assessing a wide range of projects in Ireland that may be suitable for development by reference to projected demand and that decisions to invest will be based on those projects that are likely to generate a strong commercial return to the taxpayer. NAMA advises that project appraisal is still on-going and in majority of cases is subject to achieving suitable planning and resolving infrastructural issues with local authorities. Based on its analyses to date, it expects, as announced in May 2012, to invest at least €2 billion in its Irish assets over the next four years, including new development where this makes commercial sense. Based on recent Government and industry studies, NAMA’s €2 billion investment, which it advises is in addition to the €500 million that had been advanced for projects in Ireland prior to May 2012, would be expected to generate up 25,000 direct and indirect construction jobs and potentially an additional 10,000 jobs in the wider economy.

As set out in NAMA’s end-of-year review for 2012, which is available on the NAMA website, the timing of actual drawdowns in Ireland is dependent, for certain of the proposed projects, on resolution of planning matters and a number of infrastructure issues with various local authorities. NAMA advises that this is necessary to enhance the commercial viability of these projects. A number of projects within NAMA’s portfolio currently have either an unviable planning permission, reflecting the environment in which they were conceived, or no planning permission. NAMA advises that it is working closely with local authorities within the Greater Dublin Area and the other metropolitan areas in which its debtors and receivers hold properties to overcome these challenges. NAMA also advises that, where appropriate, it is funding some infrastructure works to unlock strategic land banks for future development where demand has been confirmed and that its plans are, in this respect, aligned with other state agencies, including IDA.

NAMA advises that to end-November 2012 it had approved €1.7 billion in advances to debtors, of which over €1 billion has been drawn down to date, including over €460 million drawn down in respect of a range of commercial, retail and residential development projects across its Irish portfolio. NAMA is seeking to fund projects which are commercial and in a position to proceed wherever possible but the majority of projects require resolution of planning and infrastructural issues which are outside of NAMA’s control to resolve.

NAMA’s Annual Report and Financial Statements for the period to end-December 2011 contains extensive information on its working capital and development capital advances, including the structures and mechanisms in place to ensure the delivery of projects and examples of projects funded in line with proven and anticipated market demand. Additional information will I expect be provided by NAMA in its 2012 Annual Report in due course.

Tax Code

Questions (27)

Seán Crowe

Question:

27. Deputy Seán Crowe asked the Minister for Finance if he has drawn up a table of new effective and marginal tax rates per income decile for 2012 in view of budgetary changes last month; and if he will make this table available to the House of the Oireachtas. [1791/13]

View answer

Written answers

The position is that no changes were introduced in Budget 2013 to marginal rates of tax on income apart from those applying to those aged 70 years and over and medical card holders (PAYE /and self-employed income earners) whose income is in excess of €60,000 per annum. In such cases, the standard rates of Universal Social Charge will apply from 1 January 2013. This measure will have the effect of increasing their marginal tax rate by 3 percentage points. In addition, where modified PRSI rate payers have income from a trade or profession, such income and any unearned income they have will be made subject to PRSI with effect from 1 January 2013. This measure will have the effect of increasing their marginal tax rate by 4 percentage points.

It should be noted that tables demonstrating the new effective tax rates for 2013 per income decile were not produced as part of the Budget 2013 Booklet. However, I would point out that a number of tables demonstrating the average tax rates/ effective tax rates for the various household types at certain income levels for the years 2001 to 2013 were included in the Budget 2013 Booklet and are set out below.

AVERAGE TAX RATES ON ANNUAL EARNINGS IN % TERMS*

FULL RATE PRSI/SINGLE

Gross Income €

2001

2002

2003

2004

2005

2006

2007

2008

2009

2009 (s)/

2010

2011

2012

2013

15,000

9.5%

7.7%

6.8%

5.2%

3.2%

0.0%

0.0%

0.0%

0.0%

0.0%

2.7%

2.7%

2.7%

20,000

15.2%

13.8%

13.1%

11.9%

8.4%

7.1%

5.1%

4.4%

5.4%

6.4%

9.8%

9.8%

11.1%

25,000

17.3%

16.2%

15.7%

14.7%

13.5%

12.5%

10.9%

8.3%

9.3%

10.3%

14.0%

14.0%

15.1%

30,000

22.2%

19.3%

18.9%

18.1%

16.0%

14.7%

13.4%

12.9%

13.9%

16.9%

16.8%

16.8%

17.7%

40,000

28.3%

26.4%

26.1%

25.5%

24.0%

21.9%

19.7%

18.6%

19.1%

22.1%

24.2%

24.2%

24.8%

60,000

33.6%

32.4%

32.3%

32.0%

31.1%

29.8%

28.1%

27.5%

28.2%

31.7%

33.4%

33.4%

33.9%

100,000

37.9%

37.1%

37.0%

36.9%

36.3%

35.6%

34.2%

33.8%

34.6%

39.2%

40.9%

40.9%

41.1%

120,000

38.9%

38.3%

38.2%

38.1%

37.6%

37.0%

35.7%

35.4%

36.5%

41.1%

42.7%

42.7%

42.9%

FULL RATE PRSI/MARRIED/CIVIL PARTNERSHIP ONE INCOME TWO CHILDREN

Gross Income €

2001

2002

2003

2004

2005

2006

2007

2008

2009

2009 (s)/

2010

2011

2012

2013

15,000

2.2%

2.2%

2.2%

2.2%

2.2%

0.0%

0.0%

0.0%

0.0%

0.0%

2.7%

2.7%

2.7%

20,000

4.7%

4.7%

4.7%

4.7%

2.7%

2.7%

2.7%

2.7%

3.7%

4.7%

6.3%

6.3%

7.6%

25,000

8.7%

7.1%

6.5%

5.5%

4.9%

4.9%

4.9%

2.9%

3.9%

4.9%

7.2%

7.2%

8.3%

30,000

11.6%

10.2%

9.8%

9.0%

7.8%

6.7%

5.1%

5.1%

6.1%

9.1%

8.6%

8.6%

9.5%

40,000

16.6%

15.7%

15.5%

14.9%

13.2%

11.5%

10.2%

9.4%

10.4%

13.4%

14.2%

14.2%

14.9%

60,000

25.9%

25.3%

25.1%

24.8%

23.9%

22.5%

20.8%

19.8%

20.5%

24.0%

26.2%

26.2%

26.6%

100,000

33.2%

32.8%

32.8%

32.6%

32.0%

31.2%

29.7%

29.2%

30.0%

34.6%

36.5%

36.5%

36.8%

120,000

35.0%

34.7%

34.6%

34.5%

34.0%

33.3%

32.0%

31.6%

32.6%

37.2%

39.1%

39.1%

39.3%

* Average Tax Rates 2001-2010: Total of Income Tax, Levies (Income and Health) and PRSI as a proportion of gross income.

Average Tax Rates 2011 - 2013: Total of Income Tax, PRSI and Universal Social Charge as a proportion of gross income.

This measure includes only the standard employee credit, personal income tax credit and home carer credit, where relevant.

(s) Supplementary Budget 2009

AVERAGE TAX RATES ON ANNUAL EARNINGS IN % TERMS*

MODIFIED RATE PRSI/SINGLE

Gross Income €

2001

2002

2003

2004

2005

2006

2007

2008

2009

2009 (s)/

2010

2011

2012

2013

15,000

8.1%

6.3%

5.4%

3.8%

1.8%

0.0%

0.0%

0.0%

0.0%

0.0%

2.7%

2.7%

2.7%

20,000

13.3%

11.9%

11.2%

10.0%

6.6%

5.2%

3.2%

2.5%

3.5%

4.5%

7.9%

7.9%

8.0%

25,000

15.2%

14.1%

13.6%

12.6%

11.5%

10.4%

8.8%

6.2%

7.2%

8.2%

11.9%

11.9%

12.0%

30,000

19.9%

17.1%

16.6%

15.8%

13.8%

12.5%

11.1%

10.7%

11.7%

14.7%

14.6%

14.6%

14.6%

40,000

26.1%

24.0%

23.7%

23.0%

21.6%

19.5%

17.2%

16.1%

16.6%

19.6%

21.7%

21.7%

21.7%

60,000

32.0%

30.7%

30.5%

30.1%

29.1%

27.8%

25.9%

25.3%

25.9%

29.0%

30.8%

30.8%

30.8%

100,000

36.8%

36.0%

35.9%

35.7%

35.1%

34.3%

32.8%

32.4%

33.2%

37.1%

38.8%

38.8%

38.8%

120,000

38.0%

37.3%

37.2%

37.0%

36.6%

35.9%

34.6%

34.2%

35.2%

39.3%

41.0%

41.0%

41.0%

MODIFIED RATE PRSI/MARRIED/CIVIL PARTNERSHIP ONE INCOME TWO CHILDREN

Gross Income €

2001

2002

2003

2004

2005

2006

2007

2008

2009

2009 (s)/

2010

2011

2012

2013

15,000

0.8%

0.8%

0.8%

0.8%

0.8%

0.0%

0.0%

0.0%

0.0%

0.0%

2.7%

2.7%

2.7%

20,000

2.8%

2.8%

2.8%

2.8%

0.8%

0.8%

0.8%

0.8%

1.8%

2.8%

4.4%

4.4%

4.5%

25,000

6.6%

5.0%

4.4%

3.5%

2.9%

2.9%

2.9%

0.9%

1.9%

2.9%

5.1%

5.1%

5.2%

30,000

9.3%

8.0%

7.5%

6.7%

5.5%

4.5%

2.9%

2.9%

3.9%

6.9%

6.4%

6.4%

6.4%

40,000

14.4%

13.3%

13.0%

12.4%

10.8%

9.1%

7.7%

6.9%

7.9%

10.9%

11.8%

11.8%

11.8%

60,000

24.3%

23.6%

23.3%

23.0%

21.9%

20.5%

18.6%

17.6%

18.2%

21.3%

23.5%

23.5%

23.5%

100,000

32.2%

31.8%

31.6%

31.4%

30.7%

29.9%

28.4%

27.7%

28.5%

32.5%

34.4%

34.4%

34.4%

120,000

34.1%

33.8%

33.7%

33.5%

32.9%

32.2%

30.9%

30.4%

31.4%

35.4%

37.3%

37.3%

37.4%

* Average Tax Rates 2001-2010: Total of Income Tax, Levies (Income and Health) and PRSI as a proportion of gross income.

Average Tax Rates 2011 - 2013: Total of Income Tax, PRSI and Universal Social Charge as a proportion of gross income.

This measure includes only the standard employee credit, personal income tax credit and home carer credit, where relevant.

(s) Supplementary Budget 2009

AVERAGE TAX RATES ON ANNUAL EARNINGS IN % TERMS*

SELF EMPLOYED/SINGLE

Gross Income €

2001

2002

2003

2004

2005

2006

2007

2008

2009

2009 (s)

/2010

2011

2012

2013

15,000

13.7%

12.9%

12.9%

12.9%

12.5%

12.1%

11.3%

10.8%

10.8%

10.8%

15.7%

15.7%

15.7%

20,000

18.0%

17.4%

17.4%

17.4%

15.1%

14.9%

14.2%

13.9%

14.9%

15.9%

19.3%

19.3%

19.3%

25,000

19.4%

18.9%

18.9%

18.9%

18.7%

18.5%

18.0%

15.7%

16.7%

17.7%

21.7%

21.7%

21.7%

30,000

23.7%

21.4%

21.4%

21.4%

20.2%

19.6%

19.1%

18.9%

19.9%

22.9%

23.2%

23.2%

23.2%

40,000

29.5%

27.8%

27.8%

27.8%

26.9%

25.3%

23.8%

22.8%

23.3%

26.3%

29.0%

29.0%

29.0%

60,000

35.4%

34.2%

34.2%

34.2%

33.6%

32.6%

31.2%

30.6%

31.2%

34.2%

36.6%

36.6%

36.6%

100,000

40.0%

39.3%

39.3%

39.3%

39.0%

38.3%

37.1%

36.7%

37.5%

41.3%

42.8%

42.8%

42.8%

120,000

41.2%

40.6%

40.6%

40.6%

40.3%

39.8%

38.7%

38.4%

39.4%

43.2%

44.8%

44.8%

44.8%

SELF EMPLOYED/CIVIL PARTNERSHIP ONE INCOME TWO CHILDREN

Gross Income €

2001

2002

2003

2004

2005

2006

2007

2008

2009

2009 (s)

/2010

2011

2012

2013

15,000

3.0%

3.0%

3.0%

3.0%

3.0%

3.0%

3.0%

3.0%

3.0%

3.0%

6.7%

6.7%

6.7%

20,000

7.2%

6.0%

6.0%

6.0%

3.4%

3.0%

3.0%

3.0%

4.0%

5.0%

7.6%

7.6%

7.6%

25,000

10.8%

9.8%

9.8%

9.8%

9.3%

8.9%

7.8%

4.8%

5.8%

6.8%

11.8%

11.8%

11.8%

30,000

13.2%

12.3%

12.3%

12.3%

11.9%

11.6%

10.7%

9.8%

10.8%

13.8%

15.0%

15.0%

15.0%

40,000

17.9%

17.1%

17.1%

17.1%

16.1%

14.9%

14.3%

13.6%

14.6%

17.6%

19.0%

19.0%

19.0%

60,000

27.6%

27.1%

27.1%

27.1%

26.4%

25.3%

23.8%

22.9%

23.5%

26.5%

29.4%

29.4%

29.4%

100,000

35.3%

35.1%

35.1%

35.1%

34.6%

34.0%

32.7%

32.1%

32.9%

36.7%

38.4%

38.4%

38.4%

120,000

37.3%

37.0%

37.0%

37.0%

36.7%

36.1%

35.0%

34.5%

35.5%

39.4%

41.2%

41.2%

41.2%

* Average Tax Rates 2001-2010: Total of Income Tax, Levies (Income and Health) and PRSI as a proportion of gross income.

Average Tax Rates 2011 - 2013: Total of Income Tax, PRSI and Universal Social Charge as a proportion of gross income.

This measure includes only the standard employee credit, personal income tax credit and home carer credit, where relevant.

(s) Supplementary Budget 2009

Promissory Note Negotiations

Questions (28)

Mick Wallace

Question:

28. Deputy Mick Wallace asked the Minister for Finance his views on whether a deal on the Anglo Irish Bank promissory note can be achieved by 31 March 2013; and if he will make a statement on the matter. [1930/13]

View answer

Written answers

As the Deputy is aware, the Irish Government has been working extremely hard to secure a deal on the Irish bank debt with our European partners and detailed work will continue to ensure that positive moves in Europe are harnessed to maximise the benefit to the Irish taxpayer. I have previously stated that I am working to try and achieve a solution to the IBRC Promissory Note issue before the next scheduled instalment on the Promissory Note at end March. It would be very difficult for Ireland to make a payment on that date and so we continue to work on a deal with our European partners to resolve this issue.

Banking Sector Remuneration

Questions (29, 46)

Timmy Dooley

Question:

29. Deputy Timmy Dooley asked the Minister for Finance when he expects to be in a position to outline his plans to deal with public concern in respect of pay and pensions in the covered banks; and if he will make a statement on the matter. [2005/13]

View answer

Caoimhghín Ó Caoláin

Question:

46. Deputy Caoimhghín Ó Caoláin asked the Minister for Finance if he will provide an update on the Mercer review of bankers' remuneration; when the review will be published and the action he will take on this issue. [1776/13]

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Written answers

I propose to take Questions Nos. 29 and 46 together.

A significant amount of work has been completed on the review of bankers’ remuneration. I expect the report to be submitted shortly whereupon I will start consultations with the various stakeholders. As I have said previously, I fully recognise that there is a real public interest in the levels of remuneration at the covered institutions and I will endeavour to have the details underpinning the review published in due course.

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