Robert Dowds
Question:74. Deputy Robert Dowds asked the Minister for Finance the way income from farming and related activities is calculated for tax purposes. [9357/13]
View answerTax Code
Questions (74)
Written answers
Given the very wide range of farming-related tax issues it is not feasible, in the time available, to provide a comprehensive answer. My officials are currently preparing a detailed list which will shortly be forwarded directly to the Deputy.
IBRC Liquidation
Questions (75)
Michael McGrath
Question:75. Deputy Michael McGrath asked the Minister for Finance his plans to amend the Irish Bank Resolution Corporation Act 2013 to remove the stay on legal actions against the bank; and if he will make a statement on the matter. [9475/13]
View answerWritten answers
There are currently no plans to amend the IBRC Act 2013, which was signed into law on the 7th February 2013. As the Deputy is aware, this Act puts a stay on all actions against IBRC. I have been advised that the courts are in the process of examining if they have discretion to lift this stay and that some parties will make submissions on the 7th March. It is not possible for me to add anything further on these matters as they are currently before the courts.
IBRC Liquidation
Questions (76)
Michael McGrath
Question:76. Deputy Michael McGrath asked the Minister for Finance the date on which his Department first communicated with KPMG regarding the possibility of its being appointed as special liquidator of the Irish Bank Resolution Corporation; the procurement procedures that applied; the estimated value of the contract; and if he will make a statement on the matter. [9476/13]
View answerWritten answers
The Department first communicated with KPMG on Friday the 12th October the possibility of their officials being appointed as Special Liquidator of IBRC. I am sure the Deputy will understand that for commercial reasons the estimated cost of the contract cannot be disclosed. It is obvious that in the circumstances, a tender process could not have been entered into for the liquidation of IBRC due to the sensitivity of the matter. However, I can assure him that the rates that have been agreed are commensurate with those agreed following a tender process undertaken by the National Asset Management Agency.
As is normal in liquidations of companies, all costs, charges and expenses properly incurred by the Special Liquidators in relation to the winding up of IBRC, including the Special Liquidators’ fees, will be paid out of the assets of IBRC in priority to all other claims.
Promissory Note Negotiations
Questions (77)
Michael McGrath
Question:77. Deputy Michael McGrath asked the Minister for Finance if it is his intention, provided all other economic indicators remain in line with the projections made in Budget 2013, to use the circa €1 billion improvement in the general Government balance as a result of the deal on the promissory notes to reduce the planned €3.1 billion adjustment in budget 2014; and if he will make a statement on the matter. [9477/13]
View answerWritten answers
First of all it is important to note that some aspects of the promissory note deal are yet to be finalised. For example, the liquidator is in the process of overseeing a valuation and sales process for the assets of IBRC, while the final payments made under the ELG Scheme have not yet been determined. Nevertheless, as referred to by the Deputy, simulations ran by my Department estimate that the General Government deficit will improve by approximately €1 billion per annum over the coming years, which will bring us €1bn closer to attaining out 3% deficit target by 2015. This means that the expenditure reductions and tax increases will be of the order of €1 billion less to meet the 3% deficit ( there will be negligible impact in 2013 as a result of the payout under ELG). However, this has to be seen in the light of the most recently published General Government deficits of €8.9bn and €5.3bn in 2014 and 2015.
While this agreement is a significant step forward in restoring sustainability to our public finances, this Government is well aware that there remains a considerable gap between what we get in revenue and what we spend. This situation is not sustainable over the longer term. In addition to the requirements to bring our deficit to under 3% of GDP by 2015 as per the EDP, it makes sense that we bring balance back to the public finances and stabilise and reduce our debt burden.
As we are less than two months into the year, I will not be drawn into speculation on the composition of the next Budget and the impact that this deal will have on it. There are a lot of other moving parts to be considered such as economic growth, tax take and expenditure performance. All of the above, including the impact of the promissory note deal, will form the basis of Government decisions regarding the Budget.
Revenue Commissioners Investigations
Questions (78, 79)
Michael McGrath
Question:78. Deputy Michael McGrath asked the Minister for Finance if he will provide details of the actions taken by the Revenue sheriff in 2012 including the number and value of goods and property seized; the number and value of attachment orders issued; and if he will make a statement on the matter. [9478/13]
View answerMichael McGrath
Question:79. Deputy Michael McGrath asked the Minister for Finance if he will provide a detailed breakdown of the number, type and value of goods and property seized by county sheriffs and County Registrars in 2012; and if he will make a statement on the matter. [9479/13]
View answerWritten answers
I propose to take Questions Nos. 78 and 79 together.
Firstly, the Revenue Commissioners are charged with responsibility for collection and recovery of a wide range of taxes and duties. I know that Revenue has a strong focus on making sure that everyone complies with their tax and duty responsibilities by paying the right amount and on time. Revenue expects businesses to continue, notwithstanding the 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. I know that Revenue is conscious of the difficult economic and financial climate and how it impacts on business in being timely compliant. For example, Revenue has actively encouraged businesses experiencing particular payment difficulties to work proactively with them when such difficulties start to arise to find an agreed way through the difficulties and quickly restore voluntary timely compliance.
In regard to Sheriffs, I am advised that Revenue serves certificates through Revenue Sheriffs. However in the cases of Dublin City, Dublin County, Cork City and Cork County, these certificates are served through the County Sheriff and County Registrar. In all other counties Revenue Sheriff and County Registrar duties are carried out by separate individuals. It should be noted that Sheriffs are officers of the Court, holding office under Section 12 of the Court Officers Act, 1945. Their debt collection activities are generally covered by the Enforcement of Court Orders Act, 1926, as amended and the execution of Revenue certificates is specifically provided for in Section 962 of the Taxes Consolidated Act 1997, as amended.
Revenue issued 31,065 certificates in 2012 in respect of outstanding tax liabilities with a cumulative value of €373.6m. The Sheriffs recovered a total of €151.3m in respect of those certificates. The Sheriffs are not accountable to Revenue in relation to their operational activities. Therefore the information requested by the Deputy in relation to seizure of goods by the Sheriffs is not maintained by Revenue. I am advised however that Revenue understands that Sheriffs only undertake seizures in a very small minority of cases and only after the defaulting taxpayer has not complied with requests for payment.
In regard to attachment, Revenue issued 4,039 orders in 2012 with a cumulative value of €178.5m. It recovered a total of €38.4m in respect of those orders. The Deputy should note that Revenue issues attachment orders directly and does not operate through either the Sheriffs or County Registrars.
Finally, Revenue will always take the appropriate collection and enforcement action to ensure timely compliance, including referral of cases to the Sheriffs and the issue of attachment orders where necessary. However as mentioned already, Revenue will work with taxpayers or businesses to find a mutually acceptable arrangement before any enforcement activity is commenced, providing there is open and honest engagement and I fully support Revenue in this approach.
Government Bonds
Questions (80)
Michael McGrath
Question:80. Deputy Michael McGrath asked the Minister for Finance in the context of the deal on the promissory notes reached with the European Central Bank, if the ECB can instruct the Central Bank of Ireland to dispose of the Government bonds at an accelerated pace; and if he will make a statement on the matter. [9480/13]
View answerWritten answers
The Government bonds now held by the Central Bank following the liquidation of IBRC will be placed in the trading portfolio of the Central Bank, and these bonds will be sold as soon as possible, provided conditions of financial stability permit. The Central Bank has undertaken that minimum of bonds will be sold in accordance with the following schedule: €0.5bn by the end of 2014, €0.5bn per annum from 2015 to 2018, €1bn per annum from 2019 to 2023 and €2bn per annum from 2024 onwards.
IBRC Liquidation
Questions (81)
Michael McGrath
Question:81. Deputy Michael McGrath asked the Minister for Finance his views on whether the sale of the Irish Bank Resolution Corporation loan book by the special liquidator may have unintended consequences for some of the debtors concerned who required the support of the former bank to remain as a going concern to businesses; and if he will make a statement on the matter. [9481/13]
View answerWritten answers
I am advised that the Special Liquidators are still in the process of devising and implementing a sales process in respect of IBRC’s assets. As this sales process has not yet commenced, the Special Liquidators are not in a position to comment or speculate on the impact this may or may not have on the borrowers concerned. There is an obligation on the Special Liquidators to ensure that the assets of IBRC are sold at a price which maximises the overall return for its creditors and the maintenance of value in the assets of IBRC is an important part of this process.
Question No. 82 answered with Question No. 72.
VAT Rate Application
Questions (83)
Róisín Shortall
Question:83. Deputy Róisín Shortall asked the Minister for Finance his estimate of the loss to the State of VAT revenue arising from the below-cost selling of alcohol. [9488/13]
View answerWritten answers
I would point out that there is no Exchequer loss as a result of below-cost selling of alcohol. 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.
Question No. 84 answered with Question No. 72.