Tuesday, 15 Oct 2013

Written Answers Nos. 18-32

Central Bank of Ireland IT Operations

Questions (18, 19, 20)

Pearse Doherty

Question:

18. Deputy Pearse Doherty asked the Minister for Finance if any conflicts of interest were declared in the tendering process for the outsourcing of the Central Bank of Ireland's IT system. [42995/13]

Pearse Doherty

Question:

19. Deputy Pearse Doherty asked the Minister for Finance if his attention has been drawn to any issues regarding the fact that a company (details supplied) through its management of the Central Bank of Ireland's IT system may have access to data of a rival, who operate a commercial bank here. [42996/13]

Pearse Doherty

Question:

20. Deputy Pearse Doherty asked the Minister for Finance if, a company, (details supplied) are subject to the provisions of the Patriot Act which could require them to provide data from the Central Bank of Ireland's IT system to the US Government. [42997/13]

Written answers

Minister for Finance

I propose to take Questions Nos. 18 to 20, inclusive, together.

The Central Bank entered into a contract with Hewlett Packard Ireland Ltd. to provide the physical data centre environment to host the Central Bank’s IT systems and to manage the technical infrastructure aspects of these systems. Hewlett Packard Ireland Ltd. will also provide hosting facilities at a backup data centre for the purposes of business continuity. Both of these data centres are located in Dublin. The Central Bank will remain in control and manage all sensitive systems and data. I have been informed by the Central Bank that Hewlett Packard Ireland Ltd. is an Irish company.

I have also been informed by the Central Bank that Hewlett Packard Ireland Ltd. does not have access to any of the Central Bank’s business applications. The security of the technical aspects of the systems are achieved through a combination of physical and logical protections, procedural and process protections, security features including encryption where necessary and on-going monitoring and reporting features. The steps taken comply with the Central Bank’s internal security policies and those of the ECB and are underpinned by the contractual and legal arrangements with HP.

The Central Bank followed robust public procurement tendering procedures before awarding this contract. The Central Bank selected Hewlett Packard Ireland Ltd. as a result of an open tendering process in compliance with strict guidelines laid down by the EU public procurement process. I have been informed by the Central Bank that no conflicts of interest were declared by the successful tenderer in the tendering process.

VAT Rate Application

Questions (21)

Dominic Hannigan

Question:

21. Deputy Dominic Hannigan asked the Minister for Finance his plans to keep the 9% VAT rate for the tourism industry for 2014; and if he will make a statement on the matter. [43010/13]

Written answers

Minister for Finance

As the Deputy will be aware, it is a long standing practice of the Minister for Finance not to comment on any tax matters that may be the subject of forthcoming Budget and Finance Bill decisions.

Tax Code

Questions (22)

Gerald Nash

Question:

22. Deputy Gerald Nash asked the Minister for Finance if he or the Revenue Commissioners have undertaken research into the area of making child care deductible for tax purposes; if he has considered such a measure; and if he will make a statement on the matter. [43093/13]

Written answers

Minister for Finance

I understand that comprehensive analysis of the options to support the provision of affordable and accessible child care was undertaken in 2005. Having considered the options available, the then Government introduced the early child care supplement, providing a direct payment to all families with young children. In addition, certain other incentives were introduced in order to encourage an increase in the supply of child care places. At that time, tax relief for child care costs was considered but not introduced, as it would only have been of benefit to those in the tax net and would most likely have been absorbed by child care providers in the form of higher prices. Analysis showed that a standard rated child care costs allowance of €4,000 per annum would cost the Exchequer €64 million per annum and would have resulted in a reduced liability to income tax of only €15 per week for those availing of it.

The Deputy will be aware that the early child care supplement has since been abolished as the measure was very costly, poorly targeted and possibly led to increased charges. In its stead, the Early Childhood Care and Education (ECCE) programme, which provides for a free preschool year for children in the year before commencing primary school, was introduced. In my view the concerns raised in the 2005 analysis regarding tax relief for child care costs are still valid. This is particularly the case considering the major changes in the economy that have occurred in the intervening period. Furthermore, I would have concerns about basing any analysis of the cost of making child care tax deductible on data provided in reports that were compiled eight years ago.

Notwithstanding the absence of tax relief for child care costs, the Government acknowledges the continuing cost pressures on parents, particularly those with young children. For this reason a number of support measures are available. These include, (i) the Community Childcare Subvention (CCS) programme, which funds community child care services to enable them to charge reduced child care fees to qualifying parents, (ii) the Childcare Education and Training Support (CETS) programme, which provides free child care places to qualifying FÁS and VEC trainees and (iii) the Early Childhood Care and Education (ECCE) programme which provides for a free preschool year for children in the year before commencing primary school. In addition, generous entitlements to paid and unpaid maternity leave are provided, as well as child benefit payments.

State Banking Sector

Questions (23, 30)

Derek Keating

Question:

23. Deputy Derek Keating asked the Minister for Finance if senior management of State owned banks converted their variable mortgages to tracker mortgages either six months before or six months after the date of the Government funded banking guarantee. [43095/13]

Derek Nolan

Question:

30. Deputy Derek Nolan asked the Minister for Finance if senior management of State owned banks converted their variable mortgages to tracker mortgages either six months before or six months after the date of the Government funded banking guarantee; and if he will make a statement on the matter. [43283/13]

Written answers

Minister for Finance

I propose to take Questions Nos. 23 and 30 together.

I have been informed by Permanent TSB that no such action occurred in respect of senior management of Permanent TSB. AIB has advised me that for confidentiality reasons it is precluded from discussing or divulging details of individual customer accounts. AIB has informed me that this also applies to staff who are bank customers.

NAMA Operations

Questions (24)

Pearse Doherty

Question:

24. Deputy Pearse Doherty asked the Minister for Finance the membership and calendar of meetings for the advisory committee which advises the National Asset Management Agency board; and if he will make a statement on the matter. [43115/13]

Written answers

Minister for Finance

I understand that the Deputy is referring to NAMA’s Northern Ireland Advisory Committee. I am advised that the membership and work of the Committee are set out in the Agency’s Annual Report and Financial Statements for 2012, pages 69-70. A copy of this report is available on the NAMA website, www.nama.ie. I am advised by NAMA that the Committee, whose purpose is to advise the NAMA Board in relation to strategy for Northern Ireland assets, met on five occasions in 2012 and has met on four occasions to date in 2013.

Tax Reliefs Availability

Questions (25)

Brendan Griffin

Question:

25. Deputy Brendan Griffin asked the Minister for Finance if he will consider the introduction of tax relief to stimulate new businesses and to protect existing businesses in rural areas in these difficult economic times; and if he will make a statement on the matter. [43122/13]

Written answers

Minister for Finance

It is a long-standing practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions. However, I would draw the Deputy’s attention to some existing incentives in the tax code to encourage individuals to invest in schemes which can assist business.

The Employment and Investment Incentive (EII)

The EII is a tax incentive that provides tax relief for investors who purchase new ordinary shares in small and certain medium-sized companies carrying on a trade, and who hold those shares for a minimum of three years. The incentive is designed to help companies to raise new risk capital to expand their activities. An individual investor can obtain income tax relief on investments up to a maximum of €150,000 per annum, subject to the high income individuals' restriction, in each tax year up to 2013. The maximum amount that may be raised by a company in any 12 month period is €2.5 million, subject to a lifetime limit of €10 million. The maximum rate of tax relief available to an individual who subscribes for new ordinary shares is 30% of the amount invested. However, a further 11% tax relief may be available at the end of the holding period, provided the company concerned has either increased its number of employees or spent at least 30% of the investment raised on research and development.

The Seed Capital Scheme (SCS)

The SCS provides that an employee, who leaves employment and invests by means of shares in a qualifying new venture, may claim a refund of income tax paid in previous years. An unemployed person may also avail of this facility. The maximum investment that can be set against taxable income in any 1 year of assessment is €100,000. This means that the maximum total investment that can be made under the Seed Capital Scheme is €600,000, as the individual may set up to €100,000 against the taxable income of each of the previous 6 years. By way of example, an individual who invests €10,000 under the scheme would be entitled to a refund of income tax already paid of €4,100 provided they had paid income tax at the higher rate in the relevant tax year.

Ireland Strategic Investment Fund Capital

Questions (26)

Joan Collins

Question:

26. Deputy Joan Collins asked the Minister for Finance his views on whether at least €3 billion from the Ireland Strategic Investment Fund, now formally established with €6.3 billion funding from the National Treasury Management Agency, be fast tracked into a jobs stimulus programme for 2014 and 2015. [42823/13]

Written answers

Minister for Finance

The establishment of the Ireland Strategic Investment Fund (ISIF) was announced by the Government in September 2011. Resources from the National Pensions Reserve Fund (NPRF) will be deployed through the ISIF towards productive investment on commercial terms in the Irish economy. The ISIF will play a catalytic role and seek private sector co-investment in order to leverage its own resources and maximise the benefit to the Irish economy. The immediate priority for the Government is to put NewERA on a statutory footing and reorient the NPRF into the Ireland Strategic Investment Fund which will make strategic investments to support economic activity, competitiveness and employment in Ireland. Officials of my Department are liaising with the National Treasury Management Agency, which is the Manager of the NPRF, in identifying and drafting the necessary legislation to achieve this objective.

Tax Reliefs Availability

Questions (27)

Brendan Griffin

Question:

27. Deputy Brendan Griffin asked the Minister for Finance if he will consider the introduction of tax relief to stimulate new businesses and to protect existing businesses in rural area in these extremely difficult economic times; and if he will make a statement on the matter. [43170/13]

Written answers

Minister for Finance

The Deputy will be aware that it is not the practice of the Minister for Finance to discuss in advance the details of any measures which may be under consideration as part of the Budget and Finance Bill.

Central Bank of Ireland IT Operations

Questions (28)

Pearse Doherty

Question:

28. Deputy Pearse Doherty asked the Minister for Finance the number of times the database application server which hosts many of the Central Bank of Ireland's applications crashed in the first three weeks after migration to a company (details supplied); the number of times it has crashed since then; and the date on which the last crash occurred; and if he will make a statement on the matter. [43190/13]

Written answers

Minister for Finance

I have been informed by the Central Bank that the Central Bank IT environment is made up of a range of multi-vendor infrastructure and application components supported by internal and external resources. Incidents of difficulty with IT supply can arise from time to time. For example, as I previously indicated on 3 October 2013, PQ 41517/13, an incident occurred on 17th September when one of the servers which had recently been migrated to the HP Data Centres became unavailable for a short period. The incident in question was the result of a process failure which has since been identified and rectified as part of the standard transition arrangements. The incident lasted for 15 minutes. The impact was minor and did not impact any business service of the Central Bank. Incidents can arise in the normal course of events and these are all investigated for root cause and any necessary remediation taken. This includes root cause that may be attributed to hardware, software, process compliance or human error irrespective of whether internally or externally generated. The selection of an individual component of this environment in isolation is not relevant to a representation of the IT service levels. I have been informed by the Central Bank that these services continue to operate within expected levels.

Banking Sector Remuneration

Questions (29)

Noel Harrington

Question:

29. Deputy Noel Harrington asked the Minister for Finance if he will confirm that none of the 21 bankers stated by the European Banking Authority to have earned over a million Euro in salary in Ireland in 2011 were employed by the banks that the State assisted (details supplied); and if he will make a statement on the matter. [43210/13]

Written answers

Minister for Finance

My Department is not party to the information collected for this survey but on the basis of the information available to me, I understand that none of the individuals referred to were employed by the State assisted banks.

Question No. 30 answered with Question No. 23.

Property Taxation Assessments

Questions (31)

Sandra McLellan

Question:

31. Deputy Sandra McLellan asked the Minister for Finance the process for persons who over valued their homes for the purpose of the local property tax in order to submit the correct assessment for next year; and if he will make a statement on the matter. [43318/13]

Written answers

Minister for Finance

The Finance (Local Property Tax) Act 2012 (as amended) sets out how the tax is to be administered and how a residential property is to be valued for Local Property Tax (LPT) purposes. I am informed by Revenue that, as LPT is a self-assessed tax, it is a matter for the property owner to calculate the tax due based on an assessment of the market value of the property. For the purposes of LPT, values for properties under €1 million are organised into valuation bands, with a range of €50,000 in each band. As property owners were not required to provide a precise value for their property as at 1 May 2013, it is anticipated that, for the most part, overpayments of LPT should not happen. The initial valuation of a property on 1 May 2013, assuming it was made in good faith, is valid up to and including 2016. I am also informed that the Revenue estimates, which issued to property owners with the LPT 1 Return were not based on a valuation of properties and should not be regarded as a calculation of the amount of LPT due. The estimate only comes into play where a property owner does not submit a Return or contact Revenue to say why he/she is not liable.

On the specific case to which the Deputy refers, I am informed by Revenue that the person in question submitted her LPT 1 Return on 8 April 2013 and clearly indicated Band 4 as the appropriate valuation band for her property. The LPT liability for the 2013 half year for a Band 4 property is €202 and the person in question is meeting her obligations on a phased basis through one of the payment service providers. Notwithstanding the expectation that in general overpayments of LPT should not happen, Revenue has confirmed to me that if a liable person has genuinely overpaid the tax through an error or mistake, then Section 26 of the 2012 Act (as amended) provides that a claim for a refund of the overpayment can be made to Revenue. If that is the case for the person in question, she should write to LPT Branch, Government Buildings, Ennis, Co Clare, clearly setting out how the overpayment happened. The person will need to also provide supporting documentation to explain or prove the need to decrease her original valuation. Once the relevant documentation is received LPT Branch will make direct contact with the person. Should it transpire that the person did in fact overpay the 2013 liability then it will be possible to offset some or all of the overpayment to the 2014 liability or make a repayment.

Tax Collection

Questions (32)

Robert Troy

Question:

32. Deputy Robert Troy asked the Minister for Finance the reason Revenue has backdated tax in respect of a person (details supplied). [43377/13]

Written answers

Minister for Finance

I am advised by the Revenue Commissioners that the person (details supplied) contacted his local Revenue office in January 2012 and his agent subsequently completed a tax return for the tax year 2011. The return included information on pension income which had not previously been taken into account in calculating the customer’s tax liability, and also claimed tax reliefs which had not previously been claimed. In accordance with normal practice the case was reviewed and a net additional liability arose in respect of 2010 and 2011 amounting to a total of €2,657.27. A flexible payment arrangement to discharge this liability has been made available to the customer. The Deputy’s reference to an amnesty in the details supplied part of his question is not correct.