Written Answers Nos. 59-66
59. Deputy Thomas P. Broughan asked the Minister for Finance the amount of cigarettes and tobacco products that were seized by Customs and Excise at Dublin Airport for the years 2012 and to date in 2013; and if he will make a statement on the matter. [13382/13]
View answerI am informed by the Revenue Commissioners that the amounts of cigarettes and tobacco products that were seized by their staff at Dublin Airport in 2012 and to date in 2013 are as follows:
2012
Amount – Cigarettes 14,283,604
Amount – Tobacco 1,760.06 Kgs
2013
Amount – Cigarettes 2,259.9
Amount – Tobacco 418.18 Kgs
These figures include seizures by both Revenue’s Customs staff at the Airport and their staff in the Airmail Unit in the Airport.
Combatting the illegal tobacco trade is, and will continue to be, a very high priority for the Revenue Commissioners. The Commissioners’ “Strategy on Combating the Illicit Tobacco Trade (2011-2013)”, which is published on the Revenue website (www.revenue.ie), includes a wide range of measures designed to target those engaged in the supply and sale of illicit tobacco products, and significant resources will be devoted to this issue in 2013.
This multifaceted strategy includes:
- the ongoing analysis of the nature and extent of the problem,
- developing and sharing intelligence on a national, EU and international basis,
- the ongoing review of operational policies by a high-level group within Revenue that is chaired by one of the Commissioners personally,
- the development of analytics and detection technologies, and
- the optimum deployment of resources at both point of importation and within the country to intercept and seize contraband products and to prosecute those involved.
60. Deputy Ann Phelan asked the Minister for Finance if he will re-examine the 22% rise in cider excise duty as announced in budget 2013 in view of the following the additional 22% in excise duty is crippling for many Irish craft cider makers as they cannot avail of the 50% rebate system; the Irish craft cider industry produces 0.5% of the amount consumed by this country, and has directly and indirectly created over 230 jobs in this sector; if he will consider legislating for the implementation of a threshold of 30,000 litres of cider under which no excise duty will be levied for all cider makers which cannot be considered anti competitive, this would therefore counteract the additional rise in excise duty announced in budget 2013; and if he will make a statement on the matter. [13394/13]
View answerI am advised by the Revenue Commissioners that prior to the increases announced in Budget 2013, there had not been an increase in the rate of alcohol products tax on cider since January 2002. In addition, with effect from 15 October 2008, a reduced rate of tax was introduced for cider of a strength not exceeding 2.8% alcohol by volume. Cider benefited also from the general reduction in the rate of tax on alcohol products introduced from 10 December 2009. Article 4 of Council Directive 92/83/EEC on the taxation of alcohol products allows for a lower rate to be applied to beer produced by small breweries. This provision is, however, specific to beer and there is no corresponding provision for cider. Accordingly, under the current EU legislative framework, a reduced rate cannot be introduced for cider produced by small operators.
61. Deputy Michael Healy-Rae asked the Minister for Finance if he will reverse his decision to tax maternity benefit; and if he will make a statement on the matter. [13395/13]
View answerThe position is, as I stated in my Budget day speech of 5 December 2012, that from the 1st of July 2013, Maternity Benefit will be treated as taxable income. I have no plans to reverse this decision.
62. Deputy Seán Ó Fearghaíl asked the Minister for Finance his views on correspondence (details supplied) regarding the property tax; and if he will make a statement on the matter. [13411/13]
View answerI previously informed the House in reply to PQ No. 4851 on 31 January 2013 that the Revenue Commissioners had confirmed that some taxpayers will receive their Local Property Tax (LPT) letter electronically via the Revenue Online Service (ROS). I am informed by the Revenue Commissioners that this applies to approximately 60,000 ROS customers.
The taxpayers involved have registered with ROS in their personal capacity (that is, not through an agent) and are filing their other tax returns through ROS, a system which is world class and very highly regarded. Instead of sending a letter by post to such taxpayers, the following arrangements will apply:
- An email will be sent to the email address that is associated with the person’s ROS account notifying them that material relating to LPT has been sent to their ROS inbox;
- A letter with information on LPT Return filing will be issued to their ROS inbox. This is effectively the same letter as the one issuing in paper form to other property owners;
- A copy of Revenue’s information booklet on LPT will also be available from their ROS inbox.
I am further advised by the Revenue Commissioners that these taxpayers are accustomed to engaging electronically with Revenue on a regular basis and using ROS for paying their tax and filing their tax returns. They will be able to read the relevant LPT letter when it is sent to their ROS inbox. The LPT letter, booklet and the related email, in common with the letters issuing in paper form, will be issuing to these ROS customers in the next four weeks.
I am satisfied that the taxpayers in question will receive exactly the same service electronically as those who will receive a paper letter and consider that it is appropriate, particularly in the context of eGovernment, for the Commissioners to communicate in this manner with taxpayers who are already registered to conduct business with them on line.
63. Deputy Colm Keaveney asked the Minister for Finance further to Parliamentary Questions No. 185 of 26 Feburary 2013 and No. 71 of 6 March 2013 if the Central Bank of Ireland can act unilaterally, or in concert with the European Central Bank, dispose of the bonds, referred to in his reply, in accordance with a schedule different to that detailed by him in his earlier replies, without the agreement of the Government; and if he will make a statement on the matter. [13420/13]
View answer64. Deputy Colm Keaveney asked the Minister for Finance further to Parliamentary Questions No. 185 of 26 February 2013 and No. 71 of 6 March 2013, if he has the lawful authority to direct or inhibit the disposal of the bonds, referred to in his reply, by the Central Bank of Ireland in accordance with a schedule different to that detailed by him in his earlier replies; and if he will make a statement on the matter. [13421/13]
View answerI propose to take Questions Nos. 63 and 64 together.
As previously advised to the Deputy, the Irish Government fully understands the need for the ECB to ensure it is operating within its mandate. As the Central Bank of Ireland outlined, the bonds will be placed in the Central Bank’s trading portfolio and will be sold, provided that conditions of financial stability permit. The disposal strategy will, of course, maintain full compliance with the Treaty prohibition on monetary financing. Decisions on disposal will be made by the Central Bank of Ireland which is statutorily independent from the Irish Government.
The Central Bank of Ireland has undertaken that a 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.
The Central Bank of Ireland is responsible for financial stability considerations. I would expect the Central Bank to take full account of the health of the domestic and international banking system, the global economic situation and developments in markets when considering financial stability considerations in relation to the disposal of these Irish government bonds.
65. Deputy Eoghan Murphy asked the Minister for Finance if he is considering making the property tax deductible against rental income. [13438/13]
View answerAs I stated in my reply to a parliamentary question from Deputy Grealish yesterday (12 March 2013), the Inter-departmental group, chaired by Dr Don Thornhill to consider the design of a property tax (the “Thornhill Group”), recommended that the Local Property Tax (LPT) paid in respect of a rented property should be deductible for income tax or corporation tax purposes, in a similar manner to commercial rates. However, the Group recognised the considerable pressures on the public finances and the need to bridge the gap between expenditure and revenue. For this reason, the Group suggested that consideration be given to phasing in deductibility over a period of years. The Group also considered that it is for Government, having regard to the prevailing budgetary situation, to decide on the time span for phasing-in deductibility and on what percentage of LPT to allow as a deduction from gross rents for tax purposes. There is no provision in the current legislation for such deductions. While it is the intention of the Government to introduce such a provision on a phased basis, neither the manner in which this will happen or the timing have yet been decided.
66. Deputy Eoghan Murphy asked the Minister for Finance if he is considering other ways of taking into account household income when calculating property tax. [13439/13]
View answerIn structuring the local property tax (LPT) consideration was given to household incomes, as I will outline in my reply. At present I am not considering other ways of taking into account household income when calculating an individual’s liability to LPT. The Inter-departmental group, chaired by Dr Don Thornhill to consider the design of a property tax (the “Thornhill Group”), had due regard to issues such as ability to pay and considered the provision of waivers or deferrals for households unable to pay the tax or where a payment requirement would cause hardship. The Thornhill Group commissioned the ESRI to assist in this regard and the ESRI was charged with analysing a residential property tax which would yield specified annual revenue yields.
When considering reliefs, the Thornhill Group had regard to the following issues:
- The arrangements for payment of tax due arising from the ownership of properties should have regard to the ability of the owners to pay.
- Reliefs create costs which have to be paid for – either by taxpayers not benefiting from them, or by reductions in public expenditure.
- Reliefs should be designed to address clear economic and social policy needs.
- Considerable care would need to be taken in designing reliefs to ensure that the gains from the reliefs are targeted based on need and that there are not unintended and inequitably distributed gains.
- The LPT will not be assessed on incomes.
The Thornhill Group favoured allowing voluntary deferrals rather than waivers. Deferrals focused on particular categories of householders can address cases where there is an inability to pay the LPT. The Government agreed with this recommendation of the Thornhill Group.
The Finance (Local Property Tax) Act 2012 provides for the possibility of deferring the charge to LPT for individuals on low incomes in certain cases. To qualify for a deferral, the residential property must be occupied as a sole or main residence. The gross income thresholds for a full deferral will be €15,000 for a single person and €25,000 for a couple, whether married persons, civil partners or cohabitants. A person may claim a deferral if their gross income will not “as can reasonably be foreseen at the liability date” exceed these thresholds in that year.
An increased gross income threshold applies in the case of properties occupied as a sole or main residence and subject to a mortgage. In such cases, the gross income thresholds may be increased by 80% of the mortgage interest payments. A deferral option in qualifying cases in this regard will apply until the end of 2017 and will assist individuals currently in mortgage distress.
A deferral of up to 50% of the LPT liability will be possible where the gross income of the liable person does not exceed €25,000 for a single person or €35,000 for married persons/civil partners/cohabitants.
A deferral of 50% of the LPT will also be available where gross income does not exceed the above thresholds (€25,000 single, €35,000 couple) as increased by 80% of the gross mortgage interest payments that a liable person expects to make by the end of the year for which the gross income is being estimated. This type of deferral will also be available until 31 December 2017.
Where a liable person no longer satisfies the necessary conditions, amounts deferred prior to the date on which eligibility ceased may continue to be deferred. Interest of c. 4% per annum will apply to any amounts deferred. The deferred amount, including interest, will attach to the property and will have to be paid before the property is sold or transferred.
The deferral thresholds were based on the recommendations of the Thornhill Group. In recommending the thresholds the Group had regard to the analysis it commissioned from the ESRI. An income level of €25,000 for joint and co-owners/spouses/civil partners/cohabitees was recommended in order to enable most households in the lowest 40% of income levels to have the option of deferral. This is considered appropriate, having regard to the findings in the ESRI study regarding potential impacts on households and having regard to the need for balance and equity in terms of the burden thereby imposed on those with higher (but still average or below average) incomes. The ESRI report notes that increasing the income thresholds will have an impact on the rate of property tax that will be applied. As the income threshold increases the rate will also be required to increase to achieve the same revenue yields.
The Government accepted the gross income thresholds recommended for a full deferral and adapted the recommended gross income thresholds for a partial deferral so that they are €10,000 rather than €5,000 above the thresholds for a full deferral.
Gross income from all sources consists of total income before any deductions, allowances or reliefs that may be taken off for income tax purposes and includes income that is exempt from income tax and income from the Department of Social Protection but excludes Child Benefit.
I appreciate that some property owners may find themselves unable to pay Local Property Tax but do not qualify for a deferral under the existing legislation. For this reason, the Finance (Local Property Tax) (Amendment) Bill 2013, as passed by both Houses of the Oireachtas, provides that a person who has entered into an insolvency arrangement under the Personal Insolvency Act 2012 may apply for deferral of the LPT that is due during the period for which the insolvency arrangement is in effect.
The 2013 Bill also provides that a person who suffers both an unexpected and unavoidable significant financial loss or expense, as a result of which he or she is unable to pay their LPT without causing financial hardship, may apply for full or partial deferral. Claims for this type of deferral will require full disclosure of the person’s financial circumstances, supporting documentation and any other information required by Revenue and following an examination of the information provided, Revenue will determine whether deferral should be granted. The detail of how this type of deferral will operate and the criteria that will be used to determine eligibility will be set out in guidelines due to be published by the Revenue Commissioners shortly.
