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Tuesday, 22 Oct 2013

Written Answers Nos. 146-65

Revenue Commissioners Investigations

Questions (146)

Dara Calleary

Question:

146. Deputy Dara Calleary asked the Minister for Finance if he will provide in a tabular manner, on a county by county basis, the number of occasions a Revenue Commissioner's sheriff seized goods each month in 2011 and 2012 and to the end of September 2013, the value of each of these seizures, monies recouped from sale of good seized or subsequent settlements in relation to the specific seizures and his views on the operation of Revenue sheriffs generally; and if he will make a statement on the matter. [44623/13]

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Written answers

By way of general comment, Revenue’s primary goal is to maximise compliance with Tax and Customs legislation and in this regard is fully focused on securing the taxes and duties due to the Exchequer on a timely basis. Notwithstanding the current difficult financial environment, Revenue expects businesses to have a clear focus on maintaining payment compliance and on meeting their obligations in full and on time. Where late or non-compliance occurs, Revenue will always try to resolve the issues through engagement with the business or taxpayer in advance of deploying enforcement sanctions. However, where that engagement fails or is not forthcoming then Revenue will utilise appropriate collection enforcement measures, including referral to Sheriffs, to pursue outstanding tax debts.

Revenue has confirmed to me that Sheriffs are Officers of the Court, under Section 12 of the Court Officers Act, 1945. Their debt collection activities, including seizure procedures, are generally covered by the Enforcement of Court Orders Act, 1926, (as amended) and the execution of Revenue warrants by Sheriffs is specifically provided for in Section 962 of the Taxes Consolidation Act, 1997, (as amended). Sheriffs are answerable before the Courts for any breach of the civil debt collection code and are not directly accountable to Revenue in relation to their operational activities. For this reason Revenue does not collate specific data on seizures and is not in a position to provide the tabular data requested by the Deputy.

However, I am advised that Revenue understands that Sheriffs only undertake seizures in a very small minority of cases and only after the defaulting taxpayer has not engaged with requests for payment. Finally Revenue has informed me that the Sheriffs operate a Code of Practice in relation to their tax collection enforcement activities. The Code includes a complaints procedure that assists taxpayers in resolving disputes with Sheriffs without the necessity of initiating Court proceedings. The Code is not a substitution for a persons legal entitlement and its use does not prevent a person from applying to the Courts should they subsequently feel it is necessary to do so.

A copy of the Code is attached for the Deputy’s information.

Sheriff’s Code of Practice

The following is the Code of Practice operated by the Sheriff’s Office in relation to dealings with taxpayers:

1. The Sheriff will:

- Treat every taxpayer with courtesy;

- Where practicable, notify the taxpayer in writing of the lodgement of a certificate in the Sheriff’s Office;

- Where requested, explain to the taxpayer the purpose of the visit of the Sheriff, Bailiff or other staff;

- When goods are seized, issue as soon as possible, a written inventory to the taxpayer;

- Furnish the taxpayer with a receipt for monies paid;

- Furnish the taxpayer with an account of the proceeds of the sale of any goods seized.

2. In return the Sheriff expects that the Taxpayer will:

- Pay liabilities to the Sheriff on demand;

- Be prompt in his/her dealings with the Sheriff’s office;

- Treat the Sheriff and his staff with courtesy.

3. Complaints:

- If the taxpayer feels aggrieved at the way in which his/her case is handled, complain in writing to the Sheriff’s office;

- The Sheriff shall investigate any such complaint and respond as promptly as is practicable in the circumstances;

- Should the taxpayer remain aggrieved at the Sheriff’s response, he/she may refer the complaint to the Revenue Commissioners in writing. The Revenue Commissioners will examine any such complaint and may request that the Sheriff undertake a review.

- Should the taxpayer remain aggrieved at the outcome of the Sheriff’s review, the complaint may at his/her request be referred to the Joint Standing Committee (JSC) of the Revenue Commissioners and the Sheriffs’ Association. The JSC will review the issue(s)by means of an examination of all the relevant correspondence and documentation. [The JSC is made up of an equal number of representatives from the Revenue Commissioners and the Sheriffs Association, with a neutral Chairman.]

- Where a complaint involves an allegation of criminal behaviour against a sheriff, his agents, or staff, then the Joint Standing Committee shall decline to deal with it.

- The referral of any matter to the Joint Standing Committee is not in any way to be taken as a diminution or a substitution for a taxpayer’s common law rights, which are not interfered with by availing of the said process.

Tax Reliefs Availability

Questions (147)

Billy Timmins

Question:

147. Deputy Billy Timmins asked the Minister for Finance in relation to the cap on the amount of premium on which tax relief is available on medical insurance introduced in the budget 2014, the saving to the Exchequer from same; and if he will make a statement on the matter. [44635/13]

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Written answers

An upper ceiling on the amount of medical insurance premiums that will qualify for tax relief, of €1,000 per adult and €500 per child was introduced in the Budget. The yield from this measure is estimated at €94 million in 2014 and €127 million in a full year. This information is available, along with all other Budget measures, on the website at www.budget.gov.ie.

Tobacco Smuggling

Questions (148)

Joe McHugh

Question:

148. Deputy Joe McHugh asked the Minister for Finance the work that he and the Revenue Commissioners are doing to address the availability of illicit tobacco here; if he and the Revenue Commissioners have engaged with Northern Ireland customs on this matter; the cost to the State in 2011, 2012, and to date in 2013 of illicit tobacco trade; and if he will make a statement on the matter. [44638/13]

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Written answers

I am advised by the Revenue Commissioners, who are responsible for the collection of Tobacco Products Tax and for tackling the smuggling and sale of illicit tobacco products, that they view this criminal activity as a very serious matter. Accordingly, combating the illegal tobacco trade is, and will continue to be, a high priority for them. Revenue’s “Strategy on Combating the Illicit Tobacco Trade (2011-2013)” includes a wide range of measure that are designed to identify and target those engaged in the supply or sale of illicit tobacco products, with a view to seizing the illicit products and prosecuting those responsible. This multi-faceted strategy includes ongoing analysis of the nature and extent of the problem, developing and sharing intelligence on a national, EU and third country basis, ongoing review of operational policies, the use of analytics and detection technologies, and ensuring the optimum deployment of resources at both point of importation and within the country.

Interception at the point of importation is achieved through a combination of risk analysis, profiling, intelligence, and the screening of cargo, vehicles, baggage and postal packages. Revenue enforcement officers also target this illicit trade at the post-importation level by carrying out intelligence-based operations and random checks at retail outlets, markets and private and commercial premises. Revenue and An Garda Síochána also carry out regular multi-agency operations, particularly in relation to large maritime importations and in checks at inland markets.

There is extensive cooperation between Revenue and An Garda Síochána in combating the illicit trade. In addition, the relevant agencies in the State work closely with their counterparts in Northern Ireland, including Her Majesty’s Revenue and Customs and the PSNI, through a cross-border group on tobacco enforcement, to target the organised crime groups that are responsible for a large proportion of the illegal tobacco market.

I am assured by the Revenue Commissioners that they are committed to maintaining their extensive programme of action against all stages of the supply chain for illicit tobacco products, and that they will continue to make every effort to ensure that those involved in the illicit trade are brought to account before the Courts for their criminal activities. Determining the scale of any illegal activity, and the tax loss that it causes, is problematic, and estimates of such loss need to be approached with caution. Surveys on the incidence of the consumption of illicit cigarettes carried out in 2011 and 2012, for the Revenue Commissioners and the Health Services Executive, indicate losses of the order of €258 million and €240 million, in Tobacco Products Tax and VAT, in those years. A similar survey will be undertaken shortly and it is anticipated that the results will be available in the first quarter of next year.

EU VAT Rules

Questions (149)

Michael McGrath

Question:

149. Deputy Michael McGrath asked the Minister for Finance if a transition period until 2018 will apply for companies that currently pay VAT in the UK and other jurisdictions under EU VAT rules on the cross border supply of services to private individuals and business customers that expire in 2015; the basis for the transition period; and the expected increase in VAT receipts to the Exchequer following the expiry of the EU VAT rules. [44641/13]

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Written answers

I am informed by the Revenue Commissioners that at present the place of supply of telecommunications services, broadcasting services or electronic services to private individuals is the place where the supplier is established. From 2015, the supply of these services to private individuals will be taxed by reference to where the customers are located. The supplier would normally be obliged to register and pay VAT in all the Member States of their customers but, in order to reduce costs for business, a Mini One Stop Shop (MOSS) will be introduced that offers an alternative simplified process for charging and remitting VAT to the appropriate Member States. Under this regime, a supplier who has a place of supply or a fixed establishment in, say, Ireland, may register for VAT in Ireland and use the MOSS system to make a single return setting out his or her supplies to private individuals in other Member States. There is no transitional period for businesses involved in these supplies; the new legislation will apply from 1st January 2015. Member States will be allowed to retain a percentage of the VAT payments made through their MOSS system during the period 2015 – 2018. The retention percentage will be 30% of the VAT payments to be transferred to other Member States for 2015 and 2016, and 15% for 2017 and 2018.

Under the new regime Ireland will receive VAT revenues from supplies of telecommunications services, broadcasting services or electronic services to private individuals in the State from suppliers established in other Member States. On the other hand, Ireland will lose VAT revenues on similar supplies to private individuals in other Member States made by businesses established in the State. It is not possible to estimate the additional VAT revenues that will be collected in the State on the basis of the new regime. However, as the new regime will eliminate the existing incentive for businesses engaged in these supplies to establish in Member States with lower VAT rates, the effect is likely to be positive.

Question No. 150 answered with Question No. 134.

Living City Initiative

Questions (151)

Billy Timmins

Question:

151. Deputy Billy Timmins asked the Minister for Finance in relation to the Living City Initiative introduced in the budget 2013 initially covering Limerick and Waterford cities, the uptake of this initiative since it was launched; and if he will make a statement on the matter. [44645/13]

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Written answers

The Living City Initiative was announced as part of Finance Bill 2013. I stated at the time that the proposed scheme would be subject to a full ex-ante cost benefit analysis and would require State Aid approval from the European Commission. The cost benefit analysis was recently presented to my Department and has been published on the Department's website. On foot of the recommendations contained in this independent report, I made an announcement in my 2014 Budget Statement that I was proposing to extend the Initiative to include designated areas of four other cities. Certain other technical amendments would also be proposed in the forthcoming Finance Bill.

Following the receipt of the report, an application for EU State Aid approval will be submitted shortly to the European Commission and the evidence presented in the cost benefit analysis will form part of this application. The Initiative cannot be commenced until EU State Aid approval is received and so there are no numbers on uptake to report.

Tax Credits

Questions (152)

Michael McGrath

Question:

152. Deputy Michael McGrath asked the Minister for Finance the number of persons who will lose access to the lone parent tax credit as a result of changes announced in the budget 2014; if it will be possible for two parent to split the credit; and if he will make a statement on the matter. [44663/13]

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Written answers

The position is that the One-Parent Family Tax Credit is being replaced with a new Single Person Child Carer Tax Credit from 1 January 2014. The Single Person Child Carer Tax Credit will be of the same value, i.e. €1,650, as the existing One-Parent Family Tax Credit and will also carry the same entitlement to the extended standard rate tax band of €36,800 per annum. The new credit will be targeted such that it is available only to the primary carer of the child. A maximum of one credit will be available per single carer/claimant, regardless of whether he or she cares for more than one child and there will be no facility to apportion the credit between parents. I am advised by the Revenue Commissioners that based on the most up to date data it is estimated that up to 15,400 individuals may be affected by the restriction of the restructured credit to the principal carer. However, ultimately it will depend on the circumstances of each individual carer.

Budget 2014

Questions (153, 164, 165)

Michael McGrath

Question:

153. Deputy Michael McGrath asked the Minister for Finance if he will provide a breakdown in summary form of the €2.5 billion adjustment in budget 2014; also specify the additional measures of €600 million bringing the overall correction to €3.1 billion. [44688/13]

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Michael McGrath

Question:

164. Deputy Michael McGrath asked the Minister for Finance if he will provide a detailed breakdown of note 3 of C14 of the budget documentation which states €0.6 billion of the budgetary adjustment comes from additional resources and savings elsewhere; and if he will make a statement on the matter. [44829/13]

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Michael McGrath

Question:

165. Deputy Michael McGrath asked the Minister for Finance if all the €3.1 billion adjustment mentioned in note 3 page C14 of the budget documentation will impact on the general Government deficit in 2014; or if some measures are non-recurring and therefore will not impact the general Government deficit; and if he will make a statement on the matter. [44830/13]

View answer

Written answers

I propose to take Questions Nos. 153, 164 and 165 together.

As I outlined in my Budget Day speech, in order to achieve a deficit of 4.8% of GDP, a total adjustment package of the region €3.1bn was necessary. This comprised €2.5bn in expenditure cuts and tax increases complemented with additional resources/other savings of €0.6bn. A summary table of the adjustment package is outlined as follows.

-

€bn

Expenditure measures

1.6

Current expenditure measures

1.4

Increase in savings from Prior Year Measures

0.1

Capital expenditure measures

0.1

Taxation measures

0.9

Net new measures

0.4

Revenue carryover

0.5

Other

0.6

Total Adjustment Package

3.1

Additional detail on what encompasses the other elements on the adjustment package was requested. Firstly, the NTMA Budget debt service estimate for 2014 is lower than the corresponding April SPU estimate, of the order €0.2bn, due to an improvement in the interest rate environment generally and lower than previously planned bond issuance. Turning to the Central Bank income, during the summer, the Central Bank provided an estimate of the 2013 surplus income to be paid to the Central Fund in 2014 based on results to that date and projections for the remainder of the year. The Central Bank revised this estimate upwards by €0.1bn in September, in light of actual results for the first nine months and the consequent revisions or projections for the remaining three months of 2013. In terms of savings from the Live Register, the numbers in work rose by 33,800 in the year to the second quarter of 2013 and the Live Register at the end of quarter 3 2013 was down by just over 20,000 when compared to the same period last year. On foot of this recovering labour market, live register savings have exceeded those previously expected or the order €0.15bn. Finally, the remaining €0.15bn arises from a number of other factors mainly connected with state asset transactions.

Complementing tax and expenditure measures with additional resources and other savings, some of which may be once off, is consistent with the composition of previous adjustments published in the National Recovery Plan / Budget 2011 and the contribution of additional dividends outlined in Budget 2013. All of the €3.1bn adjustment announced in Budget 2014, as set out in the table above, will impact the general government deficit for 2014.

Tax Collection

Questions (154)

Michael McGrath

Question:

154. Deputy Michael McGrath asked the Minister for Finance if he will provide in tabular form the annual increases in the retail price of the most popular price category of 20 filter tipped cigarettes since 2007; to include the pre budget retail price; the budget tax increase; the trade increase and the tax element of the trade increase; and if he will make a statement on the matter. [44691/13]

View answer

Written answers

I am informed by the Revenue Commissioners that the annual increases in the retail price of the most popular price category of 20 filter tipped cigarettes since 2007, together with the requested breakdown, are shown in the table. Please note that all figures are shown in cents.

-

 -

Budget

Trade

Excise

Excise

Total

Vat

Total

Trade

 -

MPPC

Increase

Increase

Specific

Ad Valorem

Excise

Content

Tax

Content

2006

 705.0

 -

 -

 302.7

 125.3

428.1

122.4

 550.4

 154.6

2007

 -

 -

10.0

0.0

 1.8

1.8

1.7

  3.5

  6.5

 -

 715.0

 -

 -

 302.7

 127.1

429.9

124.1

  554.0

 161.0

05-Dec-07

 -

 30.0

 -

 19.2

 5.6

24.8

5.2

  30.0

 -

 -

 745.0

 -

 -

 321.1

 133.5

454.6

129.3

 583.9

 161.1

2008

 -

 -

10.0

0.0

 1.8

1.8

1.7

 3.5

6.5

 -

 755.0

 -

 -

 321.1

 135.3

456.4

131.0

 587.5

167.5

14-Oct-08

 -

50.0

 -

 32.0

  9.3

41.3

8.7

 50.0

 -

 -

 805.0

 -

 -

 350.6

 147.2

497.8

139.7

 637.5

167.5

01-Dec-08

 -

 2.7

 -

0.0

0.0

0.0

2.7

 2.7

-

 -

 807.7

 -

 -

 350.6

 147.6

498.2

142.9

 641.2

166.5

 -

 -

 -

 2.3

0.0

 0.4

0.4

0.4

 0.8

1.5

 -

 810.0

 -

 -

 350.6

 148.1

498.7

143.3

 642.0

168.0

07-Apr-09

 -

25.0

 -

 15.9

  4.6

20.6

4.4

 25.0

 -

 -

 835.0

 -

 -

 366.8

 152.4

519.2

147.8

 667.0

168.0

2009

 -

 -

 10.0

0.0

 1.8

1.8

1.8

 3.6

6.4

 -

 845.0

 -

 -

 366.8

 154.2

521.1

 149.5

 670.6

174.4

01-Jan-10

 -

3.5

 -

0.0

0.0

0.0

3.5

3.5

 -

 -

 841.5

 -

 -

 366.8

153.6

520.4

146.0

 666.5

175.1

2010

 -

 -

 13.5

0.0

  2.5

  2.5

2.3

  4.8

8.7

 -

 855.0

 -

 -

 366.8

156.0

 522.9

148.4

 671.3

183.7

2011

 -

 -

 10.0

0.0

1.8

 1.8

1.7

  3.6

6.4

 -

 865.0

 -

 -

 366.8

157.9

 524.7

150.1

  674.8

190.2

06-Dec-11

 -

25.0

 -

 16.2

4.5

 20.7

4.3

  25.0

-

 -

 890.0

 -

 -

 384.9

160.5

 545.3

154.5

 699.8

190.2

01-Jan-12

 910.0

19.3

 0.7

 384.9

164.1

 549.0

170.2

  719.1

190.9

01-May-12

 910.0

 -

 -

 466.2

82.3

 548.5

170.2

 718.6

191.4

 -

 -

 -

 10.0

0.0

0.9

  0.9

1.9

  2.8

7.2

 -

 920.0

 -

 -

 466.2

83.2

 549.4

172.0

  721.4

198.6

06-Dec-12

 -

10.0

 -

 7.2

0.9

  8.1

1.9

 10.0

 -

 -

 930.0

 -

 -

 475.4

82.1

 557.5

173.9

  731.4

198.6

2013

 -

 -

 10.0

0.0

0.9

 0.9

1.9

  2.8

7.2

 -

 940.0

 -

 -

 475.4

83.0

  558.4

175.8

 734.2

205.8

15-Oct-13

 -

10.0

 -

 7.3

0.9

  8.1

1.9

 10.0

-

 -

 950.0

 -

 -

 483.7

82.8

 566.5

177.6

  744.1

205.9

 -

 -

 -

 -

 -

 -

 -

-

 -

-

Tobacco Industry Issues

Questions (155)

Michael McGrath

Question:

155. Deputy Michael McGrath asked the Minister for Finance if he will provide in tabular form the retail price of each cigarette brand sold here from the end of each quarter from 2008 onwards. [44692/13]

View answer

Written answers

I am advised by the Revenue Commissioners that under the provisions of Section 851A of the Taxes Consolidation Act 1997 they have a statutory obligation to treat all taxpayer information confidentially. Consequently, they are precluded from providing the information requested by the Deputy. However, under subsection (8)(d) of the section, Revenue may disclose taxpayer information with the consent of the taxpayer. Revenue will contact the three companies who supply cigarettes to retailers and if these companies consent to the release of the information it will be forwarded to the Deputy.

NAMA Portfolio Issues

Questions (156)

Maureen O'Sullivan

Question:

156. Deputy Maureen O'Sullivan asked the Minister for Finance further to Parliamentary Question No. 137 of 8 October 2013, if he will provide a link to the URL page on the National Asset Management Agency website, www.nama.ie, where a list of all receiver-controlled properties is available and searchable by county and area, including by Dublin postcode; and if he will make a statement on the matter. [44705/13]

View answer

Written answers

Further to Parliamentary Question No. 137 of 8 October 2013, NAMA has informed me that the link to NAMA’s enforced properties website listing is http://www.nama.ie/about-our-work/properties-enforced/.

NAMA Operations

Questions (157)

John McGuinness

Question:

157. Deputy John McGuinness asked the Minister for Finance if he is satisfied that the National Asset Management Agency and the statutory receivers appointed by it are fully compliant with procurement law in the manner in which NAMA or the statutory receivers procure contractors, advisers and other service providers for building projects; and the way the procurement process functions; and if he will make a statement on the matter. [44721/13]

View answer

Written answers

NAMA, as with other lenders, does not procure or manage contracts for contractors, advisors and other service providers on building projects in respect of properties securing its loans. The procurement and management of such contracts is a matter for the owner of the related land or property or, if one is in place, the Receiver. NAMA requires that its debtors and receivers ensure value for money in procuring this work. Where NAMA directly procures goods and services, it is subject to the rules of public procurement and the related tenders are advertised on NAMA’s website, www.nama.ie and where applicable, the public procurement website, www.etenders.gov.ie.

Pension Provisions

Questions (158, 161, 162)

Róisín Shortall

Question:

158. Deputy Róisín Shortall asked the Minister for Finance the measures he is targeting in 2014 to give effect to the commitment in the programme for Government to cap taxpayers’ subsidies for pension schemes which deliver pension income of more than €60,000; the total saving that will be made in 2014 in implementing this policy with a breakdown of the saving for each measure; the way these measures will be implemented in respect of new and existing pension contributors and to those contributors in compulsory pension schemes where they have already accrued a guaranteed pension in excess of €60,000. [44737/13]

View answer

Róisín Shortall

Question:

161. Deputy Róisín Shortall asked the Minister for Finance if he will provide an estimate of the yield in 2014 and in a full year of the measures announced in budget 2014 in respect of pension contributions, pension pot size and so on with a breakdown for each measure. [44788/13]

View answer

Michael McGrath

Question:

162. Deputy Michael McGrath asked the Minister for Finance the revenue that will be raised from changes to the standard fund threshold and the change from the current single valuation factor of 20 used to value defined benefit pension entitlements to a range of higher factors the multiplies applied to defined benefit pension payments; and if he will make a statement on the matter. [44827/13]

View answer

Written answers

I propose to take Questions Nos. 158, 161 and 162 together.

They all relate to the same issue. As I announced in my Budget 2014 speech last week, the changes I am introducing to deliver on the commitment I made in Budget 2013 in the supplementary pensions area involve a reduction from 1 January 2014 in the value of the maximum allowable pension fund at retirement for tax purposes (the Standard Fund Threshold – SFT) from €2.3 million to €2 million and an increase from the current single factor of 20 used to value Defined Benefit pensions for SFT purposes to a range of higher factors varying with the age at which the pension is drawn down. This latter change will place a higher capital value for SFT purposes on Defined Benefit pension entitlements accrued after 1 January 2014 and drawn down at retirement. The use of a range of capitalisation factors will improve the equity of the SFT regime as between Defined Contribution and Defined Benefit pension arrangements and between those retiring at earlier ages and those retiring at older ages.

The yield from the changes being made to the SFT regime is estimated at €120 million in 2014 and in a full year. It is not possible to differentiate the estimated yield between the impact of the reduced SFT and the change to the valuation factors.

In line with legal advices, the changes to the SFT and the use of higher valuation factors will apply prospectively from 1 January 2014. Members of pension schemes and individuals with pension savings whose pension entitlements or savings have a value on 1 January 2014 above the reduced SFT of €2 million and up to the value of the current SFT of €2.3 million may (as on the occasions when the SFT was first introduced and subsequently reduced) protect the capital value of those rights by submitting a claim for a Personal Fund Threshold (PFT) to the Revenue Commissioners. Revised arrangements for making a PFT notification to Revenue are being provided for in the forthcoming Finance Bill. Pension rights arising under Defined Benefit arrangements have to be valued on 1 January 2014 for PFT purposes using the current standard valuation factor of 20. In the case of rights arising under Defined Contribution arrangements, the capital value for PFT purposes remains, as before, the value of the assets in the arrangement that represent the member’s accumulated rights on that date i.e. the value of the fund on that date.

The valuation factor to be used for establishing the capital value of an individual’s Defined Benefit pension rights at the point of retirement, where this takes place after 1 January 2014, is being changed from the current standard factor of 20 to a higher age–related factor that will vary with the individual’s age at the point at which the pension rights are drawn down. The age–related factors are set out in a table on page B.24 of the Budget booklet and range from 37 for Defined Benefit pension rights drawn down at age 50 or under, to a factor of 22 where they are drawn down at age 70 or over. Full details of the changes being introduced will be included in the Finance Bill which is being published on 24 October.

Departmental Expenditure

Questions (159)

Mary Lou McDonald

Question:

159. Deputy Mary Lou McDonald asked the Minister for Finance if he will provide the full year effect of all expenditure reductions for his Department as set out in the expenditure report 2014 as was provided for in the expenditure report 2013. [44746/13]

View answer

Written answers

The Department of Finance’s budget and staffing allocation reflects ongoing ambitious objectives and goals, across a broad spectrum of economic, fiscal, financial and international policies, set out in its Statement of Strategy. This is particularly important as we target an exit from the EU/IMF programme of support and the Government has recognised this in the ECF numbers and resources allocated to the Department. Notwithstanding this, my Department has achieved considerable economies in a number of areas through, for example, the abolition of payable orders, efficiencies in accommodation footprint, and process improvement efficiencies. The full extent of these efficiencies is not immediately obvious because the Department has taken-on additional clients in the shared services area (these services are not recharged to the clients) and premises lease savings will accrue to the Office of Public Works vote.

During the course of 2014 my Department will incur once-off funding costs in relation to a number of policy areas, including the Government approved National Payments Plan project. We have also included an estimate for legal fees related to actions linked to the banking sector. These additional costs exceed the various cost savings expected to be achieved in 2014 relating to improved work practices.

VAT Rate Application

Questions (160)

Brendan Griffin

Question:

160. Deputy Brendan Griffin asked the Minister for Finance if it is true that it is intended to apply a rate of 23% VAT to health supplements such as protein; if the measures will be immediately reversed, in view of the health benefits that accrue from person's living healthier lifestyles and having healthier diets; if he will explain the rationale for this measure [44764/13]

View answer

Written answers

The 23% applies to the supply of health supplements, including protein. The VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. A change in VAT rates must be in compliance with the EU VAT Directive. The VAT Directive generally provides that supplies of goods and services be chargeable to VAT at the standard rate but that lower rates are permitted in very limited circumstances. Food products can only benefit from the zero rating in accordance with Article 110 of the VAT Directive which permits the retention of the zero rate for “clearly defined social reasons” where the products were liable to VAT at the zero rate on 1 January 1991. This does not apply in the case of the health supplements referred to by the Deputy, and as such it is not possible to introduce a zero rate on these products.

Questions Nos. 161 and 162 answered with Question No. 158.

Budget 2014

Questions (163)

Michael McGrath

Question:

163. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 89 of 20 December 2012, the reason the carry forward in the 2014 budget documentation is €530 million, note 3 page C14, and not €600 million; and if he will make a statement on the matter. [44828/13]

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Written answers

I refer the Deputy to the answer provided to his question on 2nd October (Parliamentary Question No. 101) where I stated that taxation provisions included in the Finance Act 2013 and the Finance (Local Property Tax) Act 2012 in relation to measures set out in Budget 2013 will result in estimated carryover of around €300 million in 2014. In addition I referred to carryover from changes to PRSI and set out the results, as requested, in tabular form. In total therefore, the estimated carryover was €353 million. There were some minor revisions to these figures in Budget 2014 but the most significant changes impacting the carry forward figure are set out below. Budget 2014 contains a revised estimate of €300 million for carry forward from the Local Property Tax, an increase of €50 million on the previous estimate.

Furthermore, as outlined in my reply of 2nd October, these figures did not include any estimate of the yield from changes to the maximum allowable pension fund at retirement for tax purposes (the Standard Fund Threshold -SFT) which were to be introduced in 2014, as announced in Budget 2013. The details of how this measure is to be implemented are set out in Annex B in the Budget 2014 booklet. The current estimate of the yield from this measure announced in Budget 2014 is around €120 million. All told, the latest estimate of carry forward measures first announced in Budget 2013 amount to around €530 million.

Questions Nos. 164 and 165 answered with Question No. 153.

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