Jim Daly
Question:185. Deputy Jim Daly asked the Minister for Finance his plans to address the issue of VAT being refunded to retailers that sell alcohol below cost; and if he will make a statement on the matter. [39372/13]
View answerVAT Payments
Questions (185)
Written answers
I would point out that 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.
Payment Protection Insurance
Questions (189)
Arthur Spring
Question:189. Deputy Arthur Spring asked the Minister for Finance the options available to persons who wish to seek refunds of payment protection insurance which they believe they were mis-sold prior to 2007; if the financial organisation which sold the PPI is obliged to inform them of their possible entitlement to a refund; and if he will make a statement on the matter. [39440/13]
View answerWritten answers
I have been advised by the Central Bank that it has requested 10 firms to carry out a review of their sales of Payment Protection Insurance (PPI) since 1 July 2007, the date the Consumer Protection Code came into effect. At the request of the Bank, these firms have informed all their customers included in the PPI sales review of their intention to provide updates to them as the review progresses throughout 2013. Firms began to issue the findings of the review, and refunds were applicable, to consumers in May 2013 and this will continue for the remainder of 2013.
The firms currently involved in this review are Allied Irish Banks, EBS, Bank of Ireland, Ulster Bank, GE Money, Permanent tsb, Bank of Scotland, Danske Bank, KBC Bank Ireland and RaboDirect Bank Ireland. The Central Bank has informed me that as part of this review the 10 firms are not obliged to review sales prior to 1 July 2007 and therefore consumers who believe they were mis-sold a PPI prior to July 2007 should contact the firms directly.
Tax Yield
Questions (195)
Michael McGrath
Question:195. Deputy Michael McGrath asked the Minister for Finance the revenue that would be raised from applying DIRT to State savings schemes; and if he will make a statement on the matter. [39559/13]
View answerWritten answers
I am advised by the National Treasury Management Agency (NTMA) that the latest figures available on interest payments on State Savings accounts are for 2012. As the Deputy may be aware, the NTMA announced reductions in the interest rates across the full range of State Savings products in December 2012. This was done at a time when rates in the deposit market generally were coming down, and with the objective of remaining competitive while not incurring interest costs above the levels generally prevailing in the market on Government borrowings. This would mean that the future interest payments from State Savings products will be lower, which in turn means the yield from imposing DIRT on State Savings would be less than would be suggested by applying the DIRT rate to the interest paid in 2012. Having said that, the NTMA advises that interest payments on those State Savings which are not liable to DIRT were as follows in 2012:
|
Savings: |
€ |
|
Savings bonds |
€138.383 million |
|
Savings certs |
€72.627 million |
|
Instalment savings |
€18.351 million |
|
Total |
€229.36 million |
Applying DIRT at a rate of 33%, the rate which prevailed in 2012 where interest is paid less frequently than annually, to the foregoing interest payments would have produced a yield of c. €75.66 million. This projection assumes that all account holders are liable to pay DIRT.
Prize bond prizes are tax-free and amounted to €47.61 million in 2012. To apply DIRT to such prizes would yield in the region of €15.71 million (again applied at the higher rate, which was 33% in 2012, and assuming full liability applies to all holders).
As noted, the interest payments on State Savings products are likely to be lower in future years, with a consequent effect on the possible yield from imposing DIRT on such payments. The figures also do not take into account the potential behavioural impact of making the interest subject to DIRT.
State Savings products provide a convenient and State assured method of saving for members of the public. The funds invested provide the State with a low cost form of borrowing. To encourage participation by savers in order to ensure this funding remains available, the interest on Savings Bonds, Savings Certificates, National Instalment Savings, prizes related to Prize Bonds, and the payment on maturity for the National Solidarity Bond are and have traditionally been tax free.