Written Answers Nos. 107 - 126
107. Deputy Derek Keating asked the Minister for Finance his recent discussions with the European Union leaders in relation to Ireland's current Troika agreement; and if he will make a statement on the matter. [19948/13]
View answerAs the Deputy will be aware Ireland is in the final year of the EU-IMF Programme of Financial Support. The Programme is subject to a quarterly review by the three external partners, the European Commission, the ECB and the IMF (the Troika). Progress on the programme to date, and prospective future developments are discussed during these missions. The mission is the first stage in the review process which concludes with consideration and approval by the IMF and the EU. I have regular meetings with EU Finance Ministers on numerous issues including the programme. During recent meetings, I have emphasised that the Government’s focus is now firmly on our exit strategy from the Programme, our re-entry into the financial markets and improving our debt sustainability. I also emphasised that it is Ireland’s intention to achieve a successful exit from our programme and we are doing all we can to this end. My EU Finance Minister Colleagues are broadly supportive of our effort and recognise our strong implementation performance. The recent agreement, in principle, to extend the maturities of our EFSF and EFSM loans is the most recent tangible example of their supportive stance.
108. Deputy Denis Naughten asked the Minister for Finance the steps being taken to regulate food securities trading on the stock market; and if he will make a statement on the matter. [23657/13]
View answerTrading in commodity derivatives, including food commodity derivatives, forms part of the regulation of derivatives. Regulation of derivatives has been part of the Councils discussions since September 2010, when the Commission published its proposal for the European Market Infrastructure Regulation (EMIR) to regulate this market in the context of over-the-counter (OTC) trades. The G20 agreed at the 2009 Pittsburgh summit on the need to improve the transparency and oversight of less regulated markets – including derivatives markets - and to address the issue of excessive price volatility in commodity derivatives markets. In response to this, in October 2011 the European Commission published a revised MiFID proposal (‘MiFID II)’.
MiFID II is a much broader and a more ambitious package that deals with both OTC derivatives and exchange traded derivatives.
MiFID II consists of a Directive (MiFID) and a Regulation (MiFIR). The objective of MiFID II is to address some of the policy and regulatory issues that have emerged since MiFID I came into force in 2004. It aims to make financial markets more efficient, resilient and transparent, strengthen the protection of investors, mitigate systemic risk and protect against market abuse. The new framework will also increase the supervisory powers of regulators and provide clear operating rules for all trading activities.
EMIR and MiFID II are expected to result in a tighter regime for all derivatives, including food commodities, whether traded OTC or through exchanges. The measures are intended to keep pace with trends in derivatives trading, and in line with G20 commitments.
The Irish Presidency has prioritised this dossier and has continued the Council Working Party negotiations (at Attaché level) in an effort to secure a Council General Approach in order to begin negotiations with the European Parliament via trilogues.
The Central Bank of Ireland is the competent authority in this country for the purposes of derivatives legislation.
109. Deputy Alan Farrell asked the Minister for Finance if he will outline the impact that the European mortgage credit rules contained in the Mortgage Credit Directive will have on the mortgage industry here; the way it will impact on the rights of future mortgage holders; if these rights will be applied to current mortgage holders; if it is expected to increase the availability of mortgage credit through financial institutions; the level of accountability to the European Council that will be imposed on financial institutions; and if he will make a statement on the matter. [23656/13]
View answerProvisional agreement was reached with the European Parliament on the proposed Mortgage Credit Directive on the 22 April last with final agreement expected shortly. The proposed Directive was endorsed by the Council through the EU Member States’ ambassadors at the meeting of the Permanent Representatives’ Committee in Brussels on 8th May. Before its formal adoption it has to be voted on at Plenary by the European Parliament. The new rules will strengthen the rights of future mortgage holders across the EU. They do not apply to existing mortgage credit agreements. Some of the provisions of the proposed Directive are as follows:
- Improved pre-contractual information to consumers including a new European Standardised Information Sheet (ESIS) making it easier for people to compare mortgages;
- New rules for advertising mortgages to include, for example, clearer information on the annual percentage rate;
- Improved credit-worthiness assessments - tougher rules for credit assessment of people applying for mortgages;
- Intermediaries should have authorisation from the relevant supervisory authority;
- New competence requirements for mortgage lenders;
- Improved knowledge and competence requirements for staff of banks and credit intermediaries providing mortgages;
- Increased choice for consumers by allowing credit intermediaries to operate cross borders;
- Consumers will also benefit from a guaranteed period of time before being bound by an agreement for a mortgage (through a period of reflection, a right of withdrawal, or both);
- Where property valuations are conducted they will need to respect principles in line with the Financial Stability Board;
- Consumers will be granted a general right to repay their loans early.
The proposed Directive also allows for high level principles in relation to financial education for consumers and in relation to arrears and foreclosure. It imposes a requirement to adopt measures to encourage creditors to exercise reasonable forbearance before foreclosure proceedings are initiated. The new rules, set out in this proposed Directive, will also help improve comparability of mortgage products, greater transparency in the provision of mortgage material across Europe and should help the development of a cross-border mortgage market.
With regard to accountability, Member States will be required to designate the national competent authorities empowered to ensure the application and enforcement of this proposed Directive and will be required to ensure that they are granted investigating and enforcement powers and adequate resources necessary for the efficient and effective performance of their duties.
Member States will also be required to ensure that the authorities designated as competent for ensuring the application and enforcement of specific articles of this proposed Directive are competent authorities included in Article 4(2) of Regulation (EU) No 1093/2010 establishing a European Supervisory Authority (European Banking Authority) i.e. EBA members, and where they are non-EBA members, Member States will be required to ensure they cooperate with the European Banking Authority as required under the proposed Directive in relation to the specific articles in question.
Finally, the agreement on this proposed Directive marks the achievement of another key Presidency goal, contributing to consumer protection and strengthening Europe’s mortgage system.
110. Deputy Michael Colreavy asked the Minister for Finance following his commitment to do so, the progress he has made on examining the equality-proofing of future budgets. [23963/13]
View answerFollowing my commitment to direct one of my political advisers to look at the Scottish model during the Finance Bill debate on March 6th 2013, preliminary research has been undertaken. I feel it is important to highlight to the Deputy that at present the Scottish Budgetary system has limited powers in relation to revenue-raising measures. Accordingly, the Scottish Equality Statement is primarily an impact assessment on Government spending. Mr. John Swinney MSP, the Scottish Cabinet Secretary for Finance, Employment and Sustainable Growth, sets out in his introduction to the Equality Statement that he commends it “as a tool to assist with the scrutiny of our spending decisions (…) and as a commentary on the equality impact of our spending plans (…)”. The Equality Statement does not deal with revenue or taxation measures and as such the scope to provide a detailed analysis of the Scottish model is limited. Any issues relating to the allocation of spending resources and its impacts are matters for my colleague, the Minister for Public Expenditure and Reform, to deal with in the first instance.
I feel it is important to highlight the progressive nature of the Irish taxation system when discussing matters of equality. Ireland has been consistently assessed highly by the OECD for the progressivity of our taxation system. In the OECD rating system on the progressivity of taxation, where less than 100 is regressive and above 100 is progressive, most EU countries had a progressivity rate of between 120 and 140. Ireland, in comparison, had a progressivity rate of 182.
111. Deputy Clare Daly asked the Minister for Finance if he will confirm that a recent Court ruling on the matter of a tax avoidance scheme known as the value shift arrangement means that additional tax revenue of up to €500 million is now owing to the State; and the process that the Revenue Commissioners have put in place to obtain payment of these outstanding obligations. [23661/13]
View answerI assume the Deputy is referring to the High Court judgment delivered on the 5th February in Judicial Review proceedings taken by a taxpayer against the Revenue Commissioners. The background to the Judicial Review is that the taxpayer entered into what Revenue considers to be a tax avoidance scheme. The scheme involves the transfer of share rights and results ultimately in the extraction and distribution of funds tax free to the taxpayer. Revenue issued a written notification to the taxpayer that a Revenue investigation had commenced into his tax affairs for certain tax years. They also advised the taxpayer that he no longer had the opportunity to make a qualifying disclosure. A qualifying disclosure, also known as a voluntary disclosure, entitles a taxpayer to a lower rate of penalties when the tax liability is computed.
The central issue considered by the High Court in the Judicial Review proceedings was whether the taxpayer was entitled to make a qualifying disclosure. The High Court ruled that in the circumstances of the case Revenue were entitled to refuse a qualifying disclosure to the taxpayer on the grounds that Revenue’s investigation into his tax affairs had already commenced.
The High Court judgment was not, as such, concerned with matters that determine whether a tax liability arises in relation to the tax avoidance scheme.
Revenue has identified 76 companies to date that availed of the scheme with funds of c.€181million extracted tax free. A number of the cases are the subject of tax appeals and the final amount of related tax liability, if any, will ultimately depend on the final outcome of these appeals. I am informed that consequently the Revenue Commissioners are not in a position at present to quantify any tax liability that may become payable.
112. Deputy Dessie Ellis asked the Minister for Finance if he will report on the ECOFIN meeting of 14 May and the Eurogroup meeting of 13 May. [23950/13]
View answerThe Eurogroup met on Monday 13th May and was chaired by the President of the Eurogroup Mr Jeroen Dijsselbloem. The President of Eurogroup speaks on behalf of Eurogroup and held a press conference after the meeting on Monday afternoon. The Eurogroup discussed a range of issues and released statements on Greece and Cyprus. The Ecofin Council met on 14th May 2013 and as Ireland holds the Presidency of the Council of the EU, I as the Minister for Finance chaired the meeting. Minister of State, Brian Hayes TD represented Ireland at the meeting. The meeting was attended by representatives of all 27 EU Member States and of Croatia (who has observer status until their accession into the EU on 1st July), representatives of the Commission and the European Central Bank, the European Investment Bank, the Economic and Financial Committee and the Economic Policy Committee. The following issues were discussed.
Banking Recovery and Resolution
The Council discussed a proposal for a directive establishing a framework for the recovery and resolution of credit institutions and investment firms, focusing in particular on the design of the bail-in instrument.
Draft Amending Budget No. 2 to the General Budget 2013
The Council reached a political agreement on draft amending budget no. 2 for 2013, on the basis of a proposal from the Irish Presidency. Draft amending budget no. 2 for 2013 is about meeting outstanding payment needs in the 2013 EU budget for which the Commission proposed a total amount of €11.2 billion. The Council's political agreement is to provide €7.3 billion in a first stage and to focus this amount on measures to support economic growth, create jobs and tackle unemployment, especially among young people, and as a second stage, to take all necessary steps to ensure EU’s obligations are met on the basis of further information from the Commission. The Council also noted that the agreement in the draft amending Budget has been linked to the negotiations on the Multiannual Financial Framework and as such the Council stated that "nothing is agreed until everything is agreed".
Savings taxation
The Council approved a mandate for the Commission to negotiate amendments to the EU's agreements with Switzerland, Liechtenstein, Monaco, Andorra and San Marino on the taxation of savings income.
The aim is to ensure that the five countries continue to apply measures that are equivalent to the EU's directive on the taxation of savings income, which is being amended. The Commission will negotiate on the basis of a draft directive amending the savings directive (2003/48/EC), aimed at improving its effectiveness and closing certain loopholes so as to prevent its circumvention.
The Council also discussed a draft directive aimed at strengthening the EU's directive on the taxation of savings income (2003/48/EC). It agreed to revert to the matter at a forthcoming meeting, in the light of comments made by Ministers.
Tax Evasion and Fraud
The Council then adopted Council Conclusions on Tax Evasion and Fraud which reaffirm that all Member States recognise the importance of taking effective steps to fight tax evasion and tax fraud, and recognises the need to tackle aggressive tax planning.
Macroeconomic Imbalances
The Council considered the Commission’s publication last month of its in-depth reviews of macroeconomic imbalances in 13 Member States and adopted Council conclusions on the issue.
Towards a deep and genuine Economic and Monetary Union
The Council took note of the presentation by the Commission of two communications on the further development of the EU's economic and monetary union (EMU) and held a brief exchange of views. The communications relate to the introduction of a "convergence and competitiveness instrument" and ex-ante coordination of national economic policy reforms. They follow up on work carried out by the European Council, which last December called on its President to present in June 2013, after consultations with the member states, possible measures and a timetable for the further development of EMU.
Follow-up to International Finance meetings
The Council took note of the outcome of International Finance Ministers' meetings held in Washington D.C. on 18-21 April, namely:
- G20 Finance Ministers' and Central Bank Governors' meeting;
- Annual spring meetings of the IMF and the World Bank.
Discussions in Washington covered the global economic situation; the G20 framework for growth; reform of the international financial architecture; financial regulation; financing for investment; and energy, commodities and climate finance.
Over breakfast on the morning of the 14 May, the President of the European Council Herman Van Rompuy made a presentation on tax evasion and fraud and this was followed by an exchange of views. Ministers were then debriefed on the outcome of the Eurogroup the day before and discussed the economic situation, on the basis of a presentation given by Vice President Olli Rehn on the Commission’s Spring European Economic Forecasts.
It is evident from the above list that the Council completed a very full programme of work at this meeting.
113. Deputy Barry Cowen asked the Minister for Finance the implications for Ireland of the outcome of EU budget talks; and if he will make a statement on the matter. [23916/13]
View answerI presume that the Deputy is referring to the political agreement on Draft Amending Budget Number 2 to EU Budget 2013 reached at the ECOFIN Council on Tuesday 14 May 2013. On 27 March 2013, the Commission proposed that Budget 2013 be increased by €11.2 billion, which the Commission has estimated as the amount required to meet outstanding payment needs from 2012 and expected payment needs in 2013. The ECOFIN Council on 14 May 2013 reached a political agreement to provide €7.3 billion as a first stage and to take all necessary steps to ensure that the EU's obligations are honoured in a second stage on foot of further information from the Commission on implementation, the possibilities for redeployment of funds within the budget and budget revenues. The ECOFIN also stated that this agreement would be formalised when the negotiations on the EU Multiannual Financial Framework 2014-2020 are concluded and that ‘nothing is agreed until everything is agreed’.
Ireland will contribute approximately 1% of the additional amount finally agreed for the EU Budget. However, in overall terms, under the current MFF 2007-2013, Ireland remains a net beneficiary from the EU Budget.
114. Deputy Joe McHugh asked the Minister for Finance with reference to the effective rate of Irish corporation tax, if he will outline his strategy for simplifying the administrative burden that applies to achieving corporate rate compliance; if he will provide Dáil Éireann with up-to-date comparative figures for the numbers of days it takes companies based here to achieve this compliance compared with other countries in the EU; and if he will make a statement on the matter. [23753/13]
View answerThere is no agreed international methodology for calculating the ‘effective rate’ of corporation tax. With that in mind, I am unsure as to the premise of the Deputy’s question. Companies operating in Ireland are chargeable to corporation tax at the 12.5% rate on the profits that are generated from their trading activities here. A higher 25% rate applies in respect of investment, rental and other non-trading profits, as well as certain petroleum, mining and land dealing activities, while chargeable capital gains are taxable at the capital gains tax rate of 33%. I am not aware of companies having issues with complying with these corporate tax rates.
Unlike some other countries who have a high headline rate of corporation tax but also have a significant number of reliefs, the approach in Ireland is transparent. We have a relatively low headline rate of corporation tax which is applied to a broad base and there are only a small number of targeted incentives in Ireland. Such reliefs include, for example, the R&D tax credit and the 3 year exemption from corporation tax for start-up companies. These few reliefs are tightly focussed: firstly on the creation of additional employment as is consistent with current Government policy, and secondly on areas of innovation with a view to generating high value-added economic activity in the country.
In relation to the compliance burden arising from taxation more generally, the Deputy may be interested to note that Ireland was ranked 6th in the world and 1st in the EU for ease of paying taxes in a report published in April by PwC, the World Bank and the IFC entitled 'Paying Taxes 2013’.
115. Deputy Mick Wallace asked the Minister for Finance his views on the shadow banking sector here; if he will outline the benefits of this sector to the economy; and if he will make a statement on the matter. [23979/13]
View answerShadow banking embraces a disparate range of entities and activities which support investment and capital-raising. It can include Money Market Funds or other “deposit taking” investment products, Special Purpose Vehicles which perform liquidity or maturity transformation, Exchange Traded Funds and other funds which provide credit, firms which provide credit guarantees, insurance/reinsurance firms which issue or insure credit. Shadow banking typically has the following characteristics: maturity or liquidity transformation across the balance sheet - where the sources of funding are of shorter maturity or the assets are inherently illiquid; credit creation funded by leverage - which boosts certain measures of the money supply.
Shadow Banking, if well regulated, can perform important functions in the financial system and parts of the Shadow Banking system can contribute positively to the flow of credit and liquidity and help to promote economic growth.
In general, regulatory proposals on Shadow Banking seek to appropriately reflect a balance between the need for better risk management and enhanced transparency and stronger financial stability, and the need for increased and more diversified financing to the economy.
Shadow banking activities make use of various services located in Ireland such as legal advice, tax advice, accountancy advice, asset servicing, subscriptions and redemptions, valuations and listing. Most of these are high value added activities to the Irish economy through income tax receipts.
The Commission will in summer 2013, as a follow up to their Green Paper of March 2012, and the international work coordinated by the Financial Stability Board, address the systemic problems related to shadow banking. My Department is awaiting the publication of the Commission’s proposals and will engage fully with efforts to improve regulation of shadow banking.
116. Deputy Richard Boyd Barrett asked the Minister for Finance if he will provide the details of the contract with Abtran to run the local property tax help line; the cost of a call to this help line when calling from a mobile phone; his views on whether the outsourcing of this service is appropriate in view of the revelations with regards to an employee abusing credit card details; and if he will make a statement on the matter. [23982/13]
View answerI am advised by the Revenue Commissioners that the introduction of the Local Property Tax (LPT) represents a significant administrative challenge. It is the largest implementation of a self-assessment tax system in the history of the State. As a new service that will have exceptional temporary pressures at particular stages of its initial implementation, it was difficult to predict the level of contact during the introductory phase and consequently, the resources required to handle queries from members of the public. Revenue considered a number of options for the provision of a phone call service to handle queries from members of the public. It was necessary to ensure that the introduction of LPT would not adversely affect Revenue’s capacity to deliver for the Exchequer in relation to their overall priority of maintaining and improving levels of compliance across the range of taxes and duties.
Following an open competitive tendering process, the contract was awarded to Abtran. As part of the contract Abtran must meet Revenue customer service standards as well as industry ISO and PCI standards. To ensure the standards are met and maintained, both in English and Irish, Revenue provided training and training material and maintains a presence in Abtran on an on-going basis.
The conditions of the agreement between Abtran and Revenue require the company to specifically:
1. Deliver information and assistance to taxpayers having difficulty understanding Local Property Tax (LPT) and completing their returns and making payments.
2. Assist taxpayers to navigate a new online system for filing returns and payments for LPT.
3. Escalate calls to a Revenue call service where taxpayer specific information is required to resolve the call.
4. Make outbound calls to taxpayers with information on their Property Tax queries where requested by Revenue to do so.
5. Provide telephony infrastructure and supports to allow direct transfer to Revenue.
6. Provide support services and resources including account management and quality control.
I am advised that cost of the service to Revenue is dependent on the volume of calls handled and that a total of €67,000 was spent on the service delivery during Q1 2013. Revenue publishes quarterly lists of payments to suppliers over €20,000 and the continued cost of the call service will be published on that basis. In regard to the Deputy’s question on the cost of calls to the Helpline I am informed that the price is dependent on the individual’s phone network as well as the type of ‘phone package’ that the individual has with his/her operator.
In regard to the issue of credit card abuse by an employee of Abtran, I am advised by Revenue that the issue was first brought to its attention late on Thursday night 9 May 2013. The issue related to people who filed and paid via telephone through the LPT Helpline and who used credit or debit cards as the payment method. In total, the details of 11 credit/debit cards were improperly obtained by an ‘unauthorised’ Abtran employee. The incident did not impact on anybody who filed and paid via computer nor did it affect any of the other available payment options for Local Property Tax (LPT).
I am assured that Revenue is extremely concerned about the incident and has been in constant contact with the company at a senior level since the incident occurred. I am informed that the matter is now in the hands of the Gardaí and in the circumstances it would not be appropriate to comment further on that aspect of the matter. None of the card holders suffered any financial loss.
In regard to security, Abtran was able to very quickly identify the person responsible for the inappropriate access because it has very sophisticated call management and recording systems available to log all calls. On concluding its investigation, Abtran assured Revenue that the incident was an isolated matter relating to a single individual. It was not related to any technology or systems breach and was not related to the secure on-line payments system for LPT.
When Revenue extended the facility to file and pay on-line, via the LPT Helpline, special arrangements were put in place with Abtran in line with best practice, including setting up a filing team who are located in a ‘clean’ and secure environment with additional monitoring features, who do not have access to mobile phones or any other facility to record personal or payment details. The person in question was not a member of this team and had no authority to request any payment details from customers.
Since the incident also constituted a data breach, Revenue reported it to the office of the Data Protection Commissioner on Friday and is receiving advice from that office.
Revenue would like to reassure people that payment of tax by either credit or debit card is completely secure and that in the unlikely event of any illegal access, the card owner will not suffer any loss.
Finally, I commend Revenue for its very swift response to the incident.
117. Deputy Jonathan O'Brien asked the Minister for Finance the responses he has received from banks following the Mercer report; the proposals each bank has made to reduce its remuneration by 6-10% including a breakdown of their proposals regarding cuts to each of those earning less than €100,000, of those earning between €100,000 and €200,000, of those earning between €200,000 and €300,000 and of those earning more than €300,000. [23954/13]
View answer188. Deputy Pearse Doherty asked the Minister for Finance further to the publication of the Mercer report on banking pay and his calling for 6% to 10% reductions in remuneration, when such savings will be delivered. [24093/13]
View answer189. Deputy Pearse Doherty asked the Minister for Finance further to the publication of the Mercer report on banking pay and his calling for 6% to 10% reductions in remuneration, if such reductions are to be effected through cutting headcount or individual remuneration. [24094/13]
View answer190. Deputy Pearse Doherty asked the Minister for Finance further to the publication of the Mercer report on banking pay and his calling for 6% to 10% reductions to indicate the way he will ensure such reductions are delivered and if there will be ongoing monitoring of remuneration on a periodic basis. [24095/13]
View answer191. Deputy Pearse Doherty asked the Minister for Finance in respect of the Mercer report which he commissioned in June 2012, which was published on 12 March 2013, and his call to the banks to deliver proposals to him by the end of April 2013 detailing their plans to deliver 6% to 10% savings in remuneration, if he will confirm if he has now received proposals from all relevant banks, and if not, if he will confirm which banks have not delivered proposals. [24096/13]
View answer192. Deputy Pearse Doherty asked the Minister for Finance further to his call to banks to deliver proposals by the end of April 2013 to save 6% to 10% on remuneration if he has now considered those proposals, if he satisfied that the proposals are sufficient to deliver 6% to 10% savings; and if he will make a statement on the matter. [24097/13]
View answerI propose to take Questions Nos. 117, and 188 to 192, inclusive, together.
I can confirm that the three State supported banks responded with their individual strategies, designed to achieve the required savings, by the due date of 30 April as requested by the Government. Those plans are being evaluated by my Department currently. It is not possible at this stage to reveal precise individual details bar what has been put into the public domain. I can confirm that all three institutions have put forward pension changes to varying degrees as part of their respective overall responses.
I am constrained as to what I can say presently due to commercial sensitivities and perhaps, more critical at this stage, industrial relations concerns as the normal protocols continue and need to be respected and observed by all parties. This is something I have advocated throughout this process. I am anxious, therefore, that all the participants in these discussions are given space and time to conduct these critical negotiations.
Accordingly, I would encourage all sides to engage in these discussions proactively through the appropriate forums in view of the serious and critical consequences for all concerned. In this context, the Government readily acknowledges the sacrifices and changes made by bank employees to date at all levels and recognises that this has been achieved without major industrial unrest in what is a critically important sector.
It follows that, at this stage, it would not be appropriate or realistic to specify a timeframe for the savings to be delivered. However, in view of the fact that the three institutions continue to be loss making the timely delivery of such savings is critical to their viability and to the future employment prospects of their employees.
There is on-going monitoring of costs and implementation of and adherence to policy, including remuneration, with the three banks. This is achieved through a variety of measures such as compliance certification, monthly management meetings with the respective institutions, annual published reporting by them and parliamentary oversight. All three institutions are in compliance with the present Government policy on remuneration which includes, amongst other matters, a remuneration cap and a prohibition on the awarding or payment of bonuses.
118. Deputy Peadar Tóibín asked the Minister for Finance if he will re-examine the €1.25 million VAT cash receipts accounting threshold in view of the small number of companies that can benefit from the change in budget 2013. [23948/13]
View answerVAT is normally accounted for on the basis of invoices issued, that is VAT is payable on the total sales invoiced in the relevant period, regardless of whether or not the trader has been paid for the supply in that period. However, the cash basis of accounting provides traders with the option to account for VAT on a cash receipts basis. This means that the trader is not required to pay VAT until payment for the supply is actually received. Availing of this option assists firms in the critical area of cash flow. In order to avail of the cash receipts basis of accounting for VAT, a business must either a) be supplying goods or services, where 90% of the supplies are to persons who aren’t registered for VAT or b) have an annual turnover which is less than €1.25 million.
As part of a number of measures to assist small to medium enterprises, Budget 2013 increased this turnover threshold from €1 million to €1.25 million with effect from 1 May 2013. This increase will have a once off cost to the Exchequer of €20 million. Over 800 businesses are expected to benefit from this change.
Although it is possible to increase the threshold to a level higher than €1.25 million, the cash basis cannot be used to replace the normal VAT arrangements across the board which might be the case if an excessively high threshold were used, given 66% of taxpayers are already using the cash basis system. In addition an increase in the threshold to €2 million or €2.5 million would be very costly to the Exchequer. Increasing the threshold to €2.5 million, for example, would cost the Exchequer €150 million. Accordingly, I have no plans to further increase the threshold at this time.
119. Deputy Aengus Ó Snodaigh asked the Minister for Finance further to the announcement by the National Asset Management Agency in May 2012 of €2bn of investment in property under its control over the course of four years, if he will confirm, in respect of that specific investment announcement, the total investment approved to date and the total investment provided to date. [23966/13]
View answer208. Deputy Pearse Doherty asked the Minister for Finance further to the announcement by the National Asset Management Agency in May 2012 of €2bn of investment to confirm the way this investment is differentiated by NAMA with other advances made prior to the announcement, and in respect of the investment not covered by the €2bn announcement, the investment approved to date and the total investment provided to date. [24113/13]
View answerI propose to take Questions Nos. 119 and 208 together.
I am advised that NAMA expects, as announced in May 2012, to advance at least €2 billion for projects in Ireland under the control of its debtors and receivers over the period to end-2016. As previously indicated by NAMA, the €2 billion in development capital is in addition to the €500 million that had been advanced for projects in Ireland prior to May 2012. NAMA advises that from inception to end-April 2013 it had approved over €1.8 billion in new advances, of which €800 million relates to projects in Ireland.
120. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which the economic fundamentals have stabilised in this economy; the extent to which specific targets have been met and are likely to continue to be met in this regard; if any particular issues have been identified which might assist economic growth and as a consequence employment; if specific targets have been identified in this regard; and if he will make a statement on the matter. [23890/13]
View answerThe Government’s long-stated goal is to return Ireland to a sound fiscal footing and, in doing so, generate long-term sustainable growth and employment creation. In this regard, I am pleased to report that developments over the last year have been reasonably encouraging. The Irish economy recorded a second successive year of growth last year and the underlying general government deficit - at 7.6 per cent of GDP - came in well within the ceiling of 8.6 per cent of GDP set by the ECOFIN Council in 2010. My Department expects an underlying deficit of 7.4 per cent of GDP this year, below the 7.5 per cent ceiling set in 2010. We remain on course to reduce the deficit below 3 per cent of GDP by 2015.
Encouragingly, domestic demand showed tentative signs of stabilisation in the second half of last year, with personal consumption increasing in each of the last two quarters and investment returning to full-year growth for the first time since 2007. While developments in the labour market have been relatively positive of late - with employment increasing over the last two quarters and the unemployment rate falling by 1 percentage point since February 2012 - a recovery in domestic activity remains a precondition for sustained employment growth. In this regard, it is encouraging to note that my Department is now forecasting domestic demand to return to modest full-year growth this year, and to strengthen gradually over the next few years. On this basis, employment is expected to return to modest growth in 2013 and to continue expanding thereafter.
Finally, I would like to emphasise that the Government remains committed to tackling the unacceptably high level of unemployment. Reflecting this, the Action Plan for Jobs 2013 set out over 333 actions to be undertaken in the coming year to support job creation and complement measures already untaken in the Jobs Initiative and the Pathways to Work.
121. Deputy Pearse Doherty asked the Minister for Finance his views on the use of split mortgages as a tool in dealing with mortgage arrears; and if certain banks here are implementing them in a fair and sustainable way. [23941/13]
View answerThe Central Bank has advised that a number of longer term forbearance/modification arrangements have been introduced by mortgage lenders. These arrangements include mortgage to rent, trade down mortgages, equity participation, interest rate reduction, sale by agreement, and split mortgages. I have been informed by the Central Bank of Ireland that the majority of lenders have introduced, or are in the process of introducing, a split mortgage arrangement. A split mortgage warehouses a part of what remains unamortised from the initial capital sum in what can be called "Part B" of the loan. The Part B is not serviced unless the borrower's financial position improves significantly in the future, in which case the split is revised in line with the new circumstances - with the provision that, in order to preserve incentives, only a fraction of the new resources are applied to the loan. The maximum amount that can be warehoused is dependent on each lender’s own internal criteria. The split mortgage, like all other forbearance and modification arrangements, is based on affordability and sustainability of the arrangement from both the borrower’s and the lender’s perspective and is one of the key measures being introduced by lenders in assisting their distressed borrowers. All of the products offered by the banks have been prepared in the context of the Central Bank’s Mortgage Arrears Resolution Strategy.
As the Deputy will be aware, in the context of the performance targets set by the Central Bank for borrowers in arrears over 90 days, lenders will have to satisfy the Central Bank as to the sustainability and affordability of long term solutions offered given that the Central Bank will be conducting a supervisory audit of compliance with the targets including thorough analysis of sample modifications offered by the institutions.
123. Deputy Clare Daly asked the Minister for Finance the number of dwellings that were issued with local property tax assessment forms; the number of returns that have been received broken down between post and online; and the way he proposes to deal with the back-log. [23662/13]
View answerI am informed by the Revenue Commissioners that Local Property Tax (LPT) Returns, personalised letters and an LPT Guide have issued to owners of 1.66 million residential properties either by post or by way of their ROS (Revenue Online Service) inbox. The Commissioners have confirmed that in excess of 948,522 LPT Returns have been filed up to close of business on Monday, 20 May 2013. This represents 57% of the total Returns issued. Of the returns received, 657,157 were filed electronically and 291,365 were paper returns.
I am advised by the Revenue Commissioners that all paper LPT returns and payments are processed on the date received. All LPT returns and payments received online are processed in real time and a property owner’s record is seamlessly updated with the relevant details. Where any issues arise with the LPT information supplied by taxpayers, I am advised by the Revenue Commissioners that they have a dedicated team whose task is to resolve these matters in a timely manner. I am also advised that all staff resources will be available in the run-up to the on-line filing deadline of 28 May to deal with the likely increased filing rate over the course of the final few days.
I am very satisfied with how the Revenue Commissioners have, to date, addressed the various challenges associated with implementing LPT and I am confident that they will re-double their efforts over the final few days to optimise Returns filing and payment compliance.
124. Deputy Martin Ferris asked the Minister for Finance if he will confirm that he will publish information on the special liquidation of Irish Bank Resolution Corporation that will show the unaudited book value of loans at IBRC at 6 February 2013; the par value and book value of loans refinanced at 100%; the par value and book value and independent valuation and disposal value of loans sold on the open market; and the par value and book value and National Asset Management Agency valuation of loans acquired by NAMA. [23967/13]
View answerI have been informed by the Special Liquidators that the information requested will not be published as it is commercially sensitive financial information which could potentially have a detrimental impact on asset recovery from the impending sale process.
125. Deputy Sean Fleming asked the Taoiseach if the statistics collected by the Central Statistics Office for Eurostat in relation to trade for both exports and imports include records of services or goods and services and proposals to ensure that services are included in Eurostat figures in future; and if he will make a statement on the matter. [23669/13]
View answerThe statistics on exports and imports of goods are a combination of customs-based non-EU trade statistics and data from the Intrastat Survey of Irish traders involved in trade with other EU member states. The collection of the data on trade in goods is the responsibility of VIMA (a branch of Revenue). The CSO is responsible for processing and disseminating the data and the CSO's External Trade Division transmit data on trade in goods to Eurostat.
The latest results for Export and Imports of Goods are at:
http://www.cso.ie/en/media/csoie/releasespublications/documents/externaltrade/2013/gei_mar2013.pdf
Data on exports and imports of services are collected by the CSO's Balance of Payments (BOP) Division and are supplied to Eurostat by the CSO's BOP Division on a quarterly and on an annual basis. The quarterly and annual requirements for this data are set out in Regulation (EC) No 184/2005 of the European Parliament and of the Council of 12 January 2005.
Quarterly data on exports and imports of services (or BOP credits and debits) are sent to Eurostat as part of Table 2a of the BOP results:
http://www.cso.ie/en/media/csoie/releasespublications/documents/economy/2012/bop_q42012.pdf
More detailed data on exports and imports of services are sent to Eurostat on an annual basis, with greater detail provided on service categories and counterpart trading country:
http://www.cso.ie/en/media/csoie/releasespublications/documents/economy/2011/its2011.pdf
The next transmission of quarterly exports and imports of services data will be before the end of June 2013 as part of the Q1/2013 BOP results. The next transmission of annual data on international trade in services will be in early September 2013.
For information, the table shows international trade in services data in € millions for 2009 - 2012 (sent to Eurostat):
|
Service Category |
2009 |
2010 |
2011 |
2012 |
|
Transport - export |
3,045 |
3,657 |
4,155 |
4,534 |
|
Transport - import |
1,610 |
1,630 |
1,643 |
1,695 |
|
Tourism and travel - export |
3,555 |
3,106 |
3,281 |
3,174 |
|
Tourism and travel - import |
5,602 |
5,358 |
5,031 |
4,988 |
|
Communications - export |
426 |
386 |
455 |
586 |
|
Communications - import |
995 |
1,119 |
1,076 |
1,103 |
|
Insurance - export |
7,300 |
7,965 |
8,138 |
8,590 |
|
Insurance - import |
6,196 |
6,272 |
5,997 |
5,891 |
|
Financial services - export |
5,794 |
6,326 |
6,595 |
7,129 |
|
Financial services - import |
4,285 |
4,513 |
4,773 |
4,606 |
|
Computer services - export |
24,352 |
27,889 |
31,819 |
36,508 |
|
Computer services - import |
625 |
659 |
680 |
600 |
|
Royalties/licences - export |
1,216 |
2,192 |
3,636 |
3,726 |
|
Royalties/licences - import |
25,148 |
28,260 |
29,221 |
32,044 |
|
Business services - export |
21,319 |
22,151 |
22,774 |
25,382 |
|
Business services - import |
29,876 |
32,946 |
34,646 |
36,139 |
|
Other services - export |
590 |
640 |
594 |
587 |
|
Other services - import |
165 |
192 |
193 |
192 |
|
Total service exports |
67,602 |
74,311 |
81,448 |
90,218 |
|
Total service imports |
74,503 |
80,951 |
83,258 |
87,257 |
126. Deputy Simon Harris asked the Taoiseach if he will outline in tabular form, the amount of travel and subsistence, both foreign and domestic, claimed individually by him, the Minister of State and the Secretary General in his Department, for each year in the period 2005 to March 2011; and if he will make a statement on the matter. [23823/13]
View answerThe following table provides details of the amount of travel and subsistence, both foreign and domestic claimed by former Taoisigh, Ministers of State and Secretary General, for each year in the period 2005 to March 2011.
Taoiseach and Ministers of State - Travel and Subsistence claims
|
Name |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
|
Bertie Ahern, former Taoiseach |
€ 2,615.90 |
€ 1,909.47 |
€ 1,829.32 |
€ 1,330.96 |
- |
- |
- |
|
Tom Kitt, former Chief Whip |
€ 1,104.85 |
€ 1,072.44 |
€ 951.47 |
€ 694.47 |
- |
- |
- |
|
Noel Treacy, former MOS for European Affairs |
€ 650.02 |
€ 206.47 |
- |
- |
- |
- |
- |
|
Dick Roche, former MOS for European Affairs |
- |
- |
€ 484.67 |
- |
-- |
€ 639.27 |
- |
|
Brian Cowen, former Taoiseach |
- |
- |
- |
€ 1,609.44 |
€ 954.83 |
€ 619.90 |
- |
|
Pat Carey, former Chief Whip |
- |
- |
- |
- |
- |
- |
- |
|
John Curran, former Chief Whip |
- |
- |
- |
- |
- |
- |
- |
|
Dara Calleary, former MOS with resp for Public Service Transformation |
- |
- |
- |
- |
- |
- |
- |
|
Dermot McCarthy, Secretary General |
- |
- |
- |
- |
- |
- |
- |
