Written Answers Nos. 57-64
57. Deputy Patrick O'Donovan asked the Minister for Finance the position regarding a deduction for local property tax in respect of a person (details supplied) in County Limerick; and if he will make a statement on the matter. [52288/13]
View answerI am advised by Revenue that “deduction at source” of Local Property Tax (LPT) from payments made by the Department of Social Protection was implemented for all individuals who selected that payment option with effect from 1 July 2013. In the case raised by the Deputy, Revenue has confirmed to me that while the person in question filed her return for 2013, she did not specify any payment option. As a consequence, Revenue was not aware of her preference and could not request the Department of Social Protection to commence deduction at source from her pension.
The Deputy will be aware that LPT is a self-assessed tax and the onus is on the person to ensure all statutory deadlines are met in regard to both filing and payment obligations. Failure to do so leaves the person liable to interest and/or penalty charges.
However, in this case Revenue is satisfied that the non-payment of the 2013 liability was due to innocent error and no additional costs will be levied. Revenue has also acknowledged that the person has met her obligations in respect of 2014 and has opted for deduction at source in this instance, which Revenue will instruct the Department of Social Protection to commence in January 2014.
Finally, Revenue has confirmed to me that given the circumstances of the case, a member of the LPT team will make direct contact with the person in the coming days to discuss her 2013 liability. The official will advise the person in regard to the available payment options and will assist the person in whatever way may be required.
58. Deputy Thomas P. Broughan asked the Minister for Finance if he will consider holding a full evaluation of the benefits and drawbacks of implementing the next phase of the carbon tax in 2014; and if he will consider a deferral of the next phase of implementation until a thorough examination of the implications and scope of the next phase of implementation has taken place. [52296/13]
View answerThe application of the carbon tax to solid fuels has remained subject to a Ministerial commencement order since 2010. This approach was primarily adopted to delay the application of the carbon tax to solid fuel in the residential sector to allow for the development of a robust mechanism to counter the large scale sourcing of coal from Northern Ireland where lower sulphur standards apply. Such a mechanism is in place since June 2011. The application of the carbon tax to solid fuels was further postponed in 2012 given the overall tax increases in Budget 2012 including in the standard rate of VAT.
The introduction of Carbon Tax was about sending a price signal that there is a cost associated with the consumption of fossil fuels to the detriment of the environment. It should also be noted that solid fuels have the highest carbon content of all fossil fuels. As a result they are considered the dirtiest fuels and given the environmental impact it is important that they are taxed.
The carbon tax was applied to solid fuels on a phased basis in Budget 2013 but its implementation was delayed until after the last winter period i.e. from 1 May 2013 at a rate of €10 per tonne with a further €10 per tonne to be applied from 1 May 2014 to bring the rate of carbon tax in line with that of all other fuels.
While tax increases are unpopular, where Member States are under fiscal pressure, it makes senses to increase taxes in areas where some benefits can arise, in this instance a carbon tax promotes energy efficiency, reduces emissions and reduces our dependence on imported fossil fuels.
The application of the carbon tax to solid fuels i.e. coal and commercial peat (mainly peat briquettes and some turf), from 1 May 2013 has meant an increase in price of €1.20 in the case of coal (40kg bag) and 26 cents in the case of a bale of briquettes, based on current prices. This represents an 8.2% and 6.7% percentage increase in the price of coal and peat briquettes respectively. This relatively high percentage increase is due in part to those products having little or no excise applied to them prior to the carbon tax. It should also be noted that solid fuels have the highest carbon content of all fossil fuels and therefore attract a higher carbon tax.
Accordingly I do not intend to defer the further increase of €10 per tonne of CO2 emissions from 1 May 2014.
59. Deputy Terence Flanagan asked the Minister for Finance if he is concerned regarding recent reports on Ulster Bank; if he will have an investigation conducted regarding a matter (details supplied); and if he will make a statement on the matter. [52331/13]
View answerI am aware of the content of the report to which the Deputy refers. My officials met with Ulster Bank officials last week after the publication of the report and were assured that the allegations raised were not happening in Ireland. There is no reference to Ireland in the report. I understand that RBS has appointed Clifford Chance to independently review the treatment of distressed customers by the Global Restructuring Group and report in the New Year. I also understand that the findings will be applied across the RBS Group.
I would have to say that the allegations are serious and I would be extremely concerned if similar actions were taken by Ulster Bank here. I am aware of media reports that Mr. Tomlinson will be visiting Ireland in the New Year to meet business people who allege that they were the victims of improper forced defaults by Ulster Bank. I look forward to the outcome of that meeting.
60. Deputy Terence Flanagan asked the Minister for Finance if exit interviews are conducted in view of the recent departure of some senior management from the Central Bank; the measures he is taking to address this problem; and if he will make a statement on the matter. [52334/13]
View answerAs Minister for Finance, I have no role in the employment or departure of staff in the Central Bank. Under the Central Bank Act, 1942, the Central Bank Commission is responsible for administrating the staff of the Central Bank with a view to enabling the Central Bank to perform and exercise its functions and powers.
The Central Bank has developed a Human Resources Strategy which is being implemented and continuously aligned to the overall strategic direction of the Central Bank. The strategy seeks to enhance the organisation’s capability through a range of measures, including:
- Knowledge management
- Succession planning
- Coaching and mentoring
- Talent management
I have been informed by the Central Bank that it regularly conducts exit interviews at all levels to identify any underlying issues and trends.
61. Deputy Eoghan Murphy asked the Minister for Finance further to Parliamentary Question No. 106 of 12 November 2013, if he intends to make property tax paid in respect of a rented property deductible for income tax or corporation tax purposes. [52337/13]
View answerAs advised in my reply to Parliamentary Question No. 106 of 12 November 2013, the inter-departmental group, chaired by Dr. Don Thornhill, set up to consider the design of a property tax (the “Thornhill Group”) recommended that the Local Property Tax paid in respect of a rented property should be deductible for income tax or corporation tax purposes, in a similar manner to commercial rates.
The group recognised the considerable pressures on the public finances and the need to bridge the gap between expenditure and revenue, and, for this reason, suggested that consideration be given to phasing in deductibility over a period of years. The group also considered that it was for Government, having regard to the prevailing budgetary situation, to decide on the time span for phasing-in deductibility and on what percentage of LPT to allow as a deduction from gross rents for tax purposes.
The Government accepted the recommendation of the Thornhill Group in principle, but has not considered the manner or the timing in which this will happen.
62. Deputy Eoghan Murphy asked the Minister for Finance if he has approved the continuation of an existing contract or the signing of a new contract with the Russian asset recovery company A1 with regard to the Irish Bank Resolution Corporation loans to the Quinn family assets in Russia-Ukraine. [52338/13]
View answerI have been advised by the Special Liquidators that the Joint Venture Agreement (the "Agreement") between A1 and Irish Bank Resolution Corporation Limited prior to the appointment of the Special Liquidators remains in place. However, the Special Liquidators can confirm that there have been a few minor amendments to the Agreement with regards the receipt of sales proceeds from asset sales but the High Court has been kept fully abreast of these amendments.
The Special Liquidators under the IBRC Act are fully responsible for the valuation and sales of IBRC assets including loans related to Quinn assets in Russia and the Ukraine. Decisions concerning the liquidation process including the continuation of the agreement with A1 do not require my formal approval under the IBRC Act. However I have been informed of the continuation of the existing contract and have been updated on the progress which has been made to date.
63. Deputy Eoghan Murphy asked the Minister for Finance if he has considered introducing mortgage interest relief temporarily for those on higher rate mortgages for example those on non-tracker mortgages paying above 1.5%, as an interim measure until the economy returns to higher growth levels. [52339/13]
View answerThe position is that in Finance Act 2010, mortgage interest relief was extended up to end of 2017 for those whose entitlement to relief was due to end in 2010 or after. Therefore, tax relief will continue to be available in respect of interest paid by an individual on qualifying home loans taken out on or after 1 January 2004 and on or before 31 December 2012, regardless of whether they are considered first-time buyers or non-first-time buyers.
As the Deputy will be aware, this Government is committed to helping address the particular problems faced by those that bought homes at the height of the property boom between 2004 and 2008. In this regard, in Budget 2012, I fulfilled the commitment in the Programme for Government to increase the rate of mortgage interest relief to 30 per cent for first time buyers who took out their first mortgage in that period. This was the period during which house prices peaked.
A mortgage holder will qualify for the increased rate if they made their first mortgage interest payment in the period 2004 to 2008 or if they drew down their mortgage in that period. In addition, the increased rate of tax relief for first time buyers who took out their first mortgage in that period will continue up to and including the 2017 tax year.
A qualifying loan for mortgage interest relief is one which without having been used for any other purpose, is or are used in the purchase, repair, development or improvement of a claimant’s principal private residence.
I have no plans to increase or widen the scope of relief. As you will appreciate, I receive numerous requests for the introduction of new tax reliefs and the extension of existing ones. You will also appreciate that I must be mindful of the public finances and the many demands on the Exchequer given the significant budgetary constraints. Tax reliefs, no matter how worthwhile in themselves, reduce the tax base and make general reform of the tax system that much more difficult.
64. Deputy Eoghan Murphy asked the Minister for Finance if it is his intention to advise Irish banks against any increase in interest rates in view of continuing reductions by the European Central Bank. [52340/13]
View answerI, as Minister for Finance, have no statutory role in relation to the mortgage interest rates charged by regulated financial institutions. It is a commercial matter for the banks concerned.
The Central Bank has responsibility for the regulation and supervision of financial institutions in terms of consumer protection and prudential requirements and for ensuring ongoing compliance with applicable statutory obligations. The Central Bank has, however, no statutory role in the setting of interest rates by financial institutions, apart from the interest rate cap imposed on the credit union sector in accordance with the provisions of the Credit Union Act, 1997.
The mortgage interest rates that financial institutions operating in Ireland charge to customers are determined as a result of a commercial decision by the institutions concerned. This interest rate is determined taking into account a broad range of factors, including European Central Bank base rates, deposit rates, market funding costs, the competitive environment and an institution’s overall funding.
