Written Answers Nos. 78-85
78. Deputy Bernard J. Durkan asked the Tánaiste and Minister for Foreign Affairs and Trade the extent to which Ireland’s EU Presidency has succeeded in addressing the most pressing issues in the course of its term of office; and if he will make a statement on the matter. [31131/13]
View answerAt the beginning of our Presidency, the Government set out in its programme the measures we believed needed to be adopted to secure our priority objectives of restoring stability in Europe, and creating jobs and growth across the EU. With just a few days to go to the end of the Presidency we can note substantial progress in fulfilling these objectives and I can assure the Deputy that we will continue to work intensively to drive further progress.
The scourge of youth unemployment is the single greatest challenge facing Europe today. The Presidency secured early agreement on the Youth Guarantee which will provide jobless young Europeans with an opportunity to secure further education or training to better prepare them for the employment market. Its implementation will be supported by the decision of the European Council to allocate €6 billion to a new Youth Employment Initiative. As part of its efforts to underpin financial and economic stability in the European Union, the Presidency also secured agreement on two key elements of the Banking union proposals: the Capital Requirements Directive and the Single Supervisory Mechanism. Right up to the end of our Presidency we are working to make as much progress as we can on the Bank Resolution and Recovery Directive. Strong progress has also been made in financial regulation files aimed at strengthening consumer protection and on proposals to combat VAT fraud.
To help restore stability and build solid foundations for economic recovery, the Presidency has secured agreement on the “Two-Pack” legislation which strengthens budgetary surveillance and coordination within the euro area. It has also introduced more effective arrangements for the management of the European Semester process of economic and budgetary coordination.
Modernising the Single Market and reducing the administrative burden for SMEs have been priorities for Ireland as Presidency. Agreement has been reached on files including the Accounting Directive, the Unified Patent Court, and the Union Customs Code which will contribute to cutting red tape for business, facilitating growth and job creation. The Presidency also reached agreement on an amended Directive on re-use of Public Sector Information which offers new opportunities for business. One of the major achievements in the Single Market area is political agreement with the European Parliament on the updated Professional qualifications Directive.
One of the Presidency’s strongest achievements to date has been brokering agreement on the EU’s Common Fisheries Policy reform. The Presidency reached a general approach on the Common Agriculture Policy reform and is pushing ahead this week at the AgriFish Council to secure agreement on the package.
External trade has been high on our agenda as a means of sustaining growth and employment in Europe. We have fulfilled one of our top priorities - securing a mandate for the start of negotiations on a Trade and Investment Partnership with the US.
We also launched negotiations on a free trade agreement with Japan.
The Presidency has secured agreement or made progress on a wide range of other issues including protecting citizens from serious cross-border threats to health, strengthening provisions on water quality in the EU, improving the safety of workers in offshore oil and gas prospection, protecting workers in contact with electromagnetic fields, strengthening safety on Europe’s roads through legislation on HGV tachographs or ban of cadmium and mercury in batteries.
In the area of justice and home affairs the Presidency has delivered agreements aimed at strengthening EU’s external borders and internal border security – the Schengen Governance Package and European Border Surveillance System (EUROSUR). The Presidency has also secured agreement with the European parliament on a new Directive which guarantees those suspected or accused of a crime the right to access a lawyer. Ireland successfully negotiated an agreement with the European Parliament on the European Protection Order that improves the protection of victims of domestic violence. Breakthrough was reached on the final two legislative measures forming part of the Common European Asylum System.
This Presidency has also worked closely with the European External Action Service and the High Representative for Foreign Affairs and Security Policy on addressing current foreign policy issues, while also supporting democracy and advancing human rights, and working to strongly advance the EU’s development aid agenda.
The Government will spare no effort in the final days of our Presidency to deliver the results set in our Presidency programme. We remain firmly committed to ensuring that our Presidency leaves a positive and lasting legacy, and tangible results contributing to stability, jobs and growth.
One of the key issues is of course finalisation of the Multiannual Financial Framework (MFF) which provides the budgetary framework of the European Union for the next seven years and will provide €960bn to sustain jobs and growth in Europe.
Early next week we will publish a report setting out in detail the results of the Irish Presidency and I invite this House to judge for themselves the extent to which Ireland has realised the objectives we set ourselves at the start of the Presidency.
79. Deputy Bernard J. Durkan asked the Tánaiste and Minister for Foreign Affairs and Trade the extent to which contact has been made with undocumented Irish in the US with particular reference to the need for regularisation; the extent of progress in relation to such matters; and if he will make a statement on the matter. [31132/13]
View answerA resolution of the situation facing the undocumented Irish in the United States has been and remains a priority for the Government in ongoing contacts with the US Administration and Congress. The Government have also attached great importance to providing for future flows of migration between Ireland and the United States through the extension of the so called E3 visa scheme to include Irish citizens. In this context, we very much welcomed the publication this springtime of the US Senate’s Border Security, Economic Opportunity and Immigration Modernization Bill which provides for reform of the US immigration system.
The bill is progressing through the Senate system and on May 21, the Senate Judiciary Committee completed its detailed examination of proposals for comprehensive reform of the US immigration system as set out in the Bill. The Bill has gone forward for further debate by the full Senate and it is expected debates will continue over the coming weeks.
The comprehensive draft legislation, which was drafted over several months by a bi-partisan group of eight US Senators, includes provisions that would legalise the status of thousands of undocumented Irish people and provide a path to permanent residency. It also provides for future flows of legal migration between Ireland and the US via the proposed E-3 visa.
The Bill is a very positive development. Its provisions, if adopted, would help to end the great hardship and uncertainty faced by undocumented Irish in the US and their families here in Ireland. The inclusion of a new provision to allow several thousand Irish citizens to legally avail of employment opportunities in the US every year is also particularly welcome.
It is important to recall that the overall issues involved are complex and sensitive ones within the US political system. Our Embassy in Washington continues to closely follow developments and lobby as necessary, in keeping with the approach we have adopted over many years in our pursuit of a resolution of the situation facing the undocumented in the United States.
I have recently written to Secretary of State John Kerry in relation to immigration reform. I have also discussed these issues recently with Senator Patrick Leahy, Chair of the Senate’s Judiciary Committee and I intend to visit Washington DC in the coming weeks to reinforce the Irish Government’s interest in all aspects of immigration reform.
I would like to reiterate my appreciation for the active support we continue to receive from a number of Irish community organisations, including the Irish Lobby for Immigration Reform, the Chicago Celts and the Ancient Order of Hibernians.
80. Deputy Pearse Doherty asked the Minister for Finance the reason the National Asset Management Agency did not take on outstanding development levies owed by developers when bad loans were transferred to the agency; and in view of the fact that these outstanding levies are now considered to stand at €750 million and some individual councils are trying to pursue individual householders, if he has considered the possibility of NAMA dealing with local authorities in cases in which the outstanding debt is from a developer who is now in NAMA, with a view to transferring the debt at a discount into NAMA. [30872/13]
View answerNAMA has acquired loans from the Participating Institutions that are secured, in the main, on unsold property at time of acquisition. I am advised by NAMA that, in respect of such unsold property, it requires its debtors and receivers to comply with all statutory obligations. NAMA advises that this includes the payment of development levies as they fall due, on foot of a valid planning permission, for development. NAMA further advises that it works closely with debtors and receivers to ensure that any such liabilities are appropriately addressed. NAMA’s role relates only to those properties that secure its acquired loans. It has no role in relation to other properties, including any properties sold prior to its acquisition of loans from the Participating Institutions.
81. Deputy Pearse Doherty asked the Minister for Finance if his attention has been drawn to the losses incurred by a credit union (details supplied) in County Waterford as a result of the liquidation of the Irish Bank Resolution Corporation; and if he will make a statement on the matter. [30891/13]
View answerI am not in a position to discuss the specifics of any customer accounts in IBRC (in special liquidation) however, I am advised by the Special Liquidators that are certain tracker bond products which were sold to a number of Credit Unions which were liabilities of IBRC at the time of the liquidation. I am further advised that these products have a structured deposit element which is covered by the Deposit Guarantee Scheme for that element of the product. As a result the first €100k of any claim from these depositors is covered under the DGS Scheme. I have been advised that the Special Liquidators are aware of a number of depositors who fall outside the eligibility criteria for the ELG Scheme due to the nature of the investment product. Unfortunately, if a deposit is not eligible under the ELG scheme the depositor will rank as an unsecured creditor in the liquidation. At the time that this investment product was purchased by Credit Unions, there was no additional guarantee provided by the State. It was always the case that the ELG scheme covered only those liabilities which were entered into during the issuance window.
82. Deputy Pearse Doherty asked the Minister for Finance the revenue that would be raised for the Exchequer if tax credits for high income earners were phased out with a reduction of half the credits for income earners between €100,000 and €150,000; by three quarters for income earners between €150,000 and €200,000; and the abolition of tax credits for income earners in excess of €200,000; and further, to set out the impact this would have on the average tax take from salary earners in each of those categories for example €125,000, €175,000, €225,000. [30922/13]
View answerI am advised by the Revenue Commissioners that the estimated full year yield to the Exchequer, estimated by reference to 2013 incomes, of reducing the main personal and employee tax credits in the manner mentioned by the Deputy would be of the order of €315 million. A breakdown of the estimated yield by each specified income range, together with an indication of the average additional tax payable by income earners within each income range, is as follows.
|
Range of Gross Income |
Estimated yield to the Exchequer - €m |
Average additional tax take per income earner within the gross income range |
|
€100,000 to €150,000 |
170 |
€2,560 |
|
€150,001 to €200,000 |
65 |
€3,532 |
|
Over €200,000 |
80 |
€4,077 |
It should be noted that the income ranges shown in the above table relate to Gross Income as defined in Revenue Statistical Report 2011.
These figures are estimates from the Revenue tax-forecasting model using actual data for the year 2010 adjusted as necessary for income and employment trends in the interim. They are therefore provisional and likely to be revised.
It should also be noted that a married couple who has elected or has been deemed to have elected for joint assessment is counted as one tax unit.
83. Deputy Pearse Doherty asked the Minister for Finance the cost or saving to the Exchequer that could be made if the use of tax credits was abolished and the system instead returned to tax free allowance up to a cut-off point, followed by the standard and marginal tax rates. [30923/13]
View answerI am advised by the Revenue Commissioners that the estimated full year cost to the Exchequer, estimated by reference to 2013 incomes, of converting the main personal and employee tax credits, including the additional credits available to lone parents and widowed persons, back to tax free allowances would be of the order of €1.7 billion.
A tax credit system is a fairer and more equitable tax system. This is because tax credits have the same value to both lower and higher income earners, whereas tax allowances are more beneficial to higher income earners, as they reduce the amount of income which is subject to the higher rate of tax. In addition, one of the perceived advantages of moving from tax free allowances to tax credits was that it was significantly less costly for the Exchequer to maintain a tax free threshold for low income earners in a tax credit environment.
A move back to tax free allowances would require a significant reduction to be made to those allowances to achieve revenue neutrality and consequently that would have the effect of reducing the tax free thresholds to lower effective levels than at present.
The cost figure is an estimate from the Revenue tax-forecasting model using latest actual data for the year 2010, adjusted as necessary for income and employment trends in the interim. It is, therefore, provisional and subject to revision.
84. Deputy Pearse Doherty asked the Minister for Finance the current tax treatment of discretionary trusts and the revenue that could be raised for the Exchequer if the once-off charge for establishing a trust was increased by 1% and the annual tax of the trust was increased by 0.5%. [30925/13]
View answerI am informed by the Revenue Commissioners that the assets in a Discretionary Trust are chargeable to Discretionary Trust Tax when the settlor dies or, if later, when the youngest “Principal Object” of the trust attains the age of 21 years. In this context, “Principal Object” is defined as the settlor’s spouse, civil partner, child, child of a civil partner or child of a pre-deceased child. The assets are chargeable to Discretionary Trust Tax while they remain in a Discretionary Trust. Discretionary Trust Tax is chargeable as follows:
(i) A once-off 6% charge on the value of the assets in a trust
Where the trust is created during the lifetime of the settlor the tax becomes chargeable at the date of death of the settlor, or, if later, when the youngest “Principal Object” of the trust attains the age of 21 years.
(ii) An annual 1% charge arising on 31 December of each year on the value of the assets of the trust at that date (assuming there are no Principal Objects under the age of 21 years).
This 1% charge does not apply in a year where 31 December occurs in the twelve months immediately following the date on which the 6% charge arose.
Discretionary Trust Tax returns (Form IT4 for the 6% initial charge and Form IT32 for the 1% annual charge) must be filed together with payment of the tax due, within these time limits:
- For the initial once-off charge; within 4 months of the due date.
- For the annual 1% charge; within 4 months of 31 December of each year.
A breakdown between the yield of discretionary trust tax from the once off charge and the annual tax is not available. But, based on an understanding that the bulk of the yield is derived from the annual tax and, on the basis of collection trend to date, it is estimated that the full year yield to the Exchequer from the suggested increases in the rates of 1% in the once-off charge and 0.5% in the annual charge would be of the order of €0.5 million.
This estimate is provisional and subject to revision.
It should be noted that this estimate is based upon an assumption that there would be no behavioural impact of this change, which could lead to a less than expected impact on Exchequer yield. In addition, the realisation of any estimated yield from an increase in taxation on assets relating to property is subject to movements in the value of such assets, which are currently occurring in the economy.
85. Deputy Pearse Doherty asked the Minister for Finance if his attention has been drawn to the income tax system in Britain where the personal allowance is only applicable up to an income of £100,000; if he has considered abolishing tax credits for income earners in excess of €100,000 and if so, the amount it would raise for the Exchequer. [30927/13]
View answerThe position is that the income tax system in Britain generally operates on a tax allowance basis, whereas the Irish taxation system generally operates on a tax credit basis. A tax credit system is a fairer and more equitable tax system. This is because tax credits have the same value to both lower and higher income earners, whereas tax allowances are more beneficial to higher income earners, as they reduce the amount of income which is subject to the higher rate of tax. In 2010, the UK Government introduced a personal allowance income limit which was set at £100,000 per annum. Once an individual’s income exceeds the income limit threshold of €100,000, their personal allowance is reduced by £1 for every £2 of earnings in excess of €100,000.
As the Deputy is aware, the Programme for Government states that as part of our fiscal strategy, the Government will maintain the current rates of income tax together with bands and credits. We will not increase the top marginal rates of taxes on income.
I am advised by the Revenue Commissioners that the estimated full year yield to the Exchequer, estimated by reference to 2013 incomes, of abolishing the main personal and employee tax credits for income earners earning in excess of €100,000 would be of the order of €500 million.
