Written Answers Nos. 129-144
129. Deputy John O'Mahony asked the Minister for Finance the reason a person (details supplied) in County Mayo is being charged universal social charge on money saved before the charge was introduced; and if he will make a statement on the matter. [52690/13]
View answerThe position is that the Universal Social Charge (USC) was introduced from 1 January 2011 to replace the Income Levy and the Health Levy. It was a necessary measure to widen the tax base, remove poverty traps and raise revenue to reduce the budget deficit.
The USC is only charged on income and not on capital or savings, and it only applies where an individual has an aggregate income for a year in excess of €10,036. Where an individual in the PAYE system has income in excess of that amount, the rates of USC are as follows:
The first €10,036 @ 2%.
The next €5,980 @ 4% and
The balance @ 7%.
However, where an individual is aged 70 or over, or is the holder of a full medical card, and has income of €60,000 per annum or less, they will not be liable to the top rate of charge. For such individuals the rates of charge are as follows:
2% on the first €10,036 of income;
4% on all income over that amount.
I am advised by the Revenue Commissioners that the person in question is in receipt of an occupational retirement pension and is also in receipt of a small pension or distribution from an Approved Retirement Fund. As the person's aggregate income exceeds €10,036, both of these sources of income are liable to USC. As stated earlier, the USC is charged on annual income paid to the individual and is not charged on capital.
130. Deputy Martin Ferris asked the Minister for Finance if registered charity shops are liable for VAT for the sale of goods including donated items; and if he will make a statement on the matter. [52697/13]
View answerI am advised by the Revenue Commissioners that, in general, many of the activities carried out by charities are considered to be either outside the scope of, or exempt from, VAT. Charities engaged exclusively in such activities are neither obliged nor entitled to register and account for VAT on their income. In certain circumstances the activities of a charity, such as the operation of charity shops, may be regarded as within the scope of VAT. Such circumstances are examined on a case by case basis.
131. Deputy Patrick Nulty asked the Minister for Finance the reason a person (details supplied) has not received any contact from the Revenue Commissioners regarding the valuation sent of their property; if, given the entirely flawed estimate they received from them initially, they will be entitled to a rebate on their payment for 2013; and the rate they will be liable for in 2014. [52728/13]
View answerI am informed by Revenue that, as Local Property Tax (LPT) is a self-assessed tax, it is a matter for the property owner to calculate the amount of tax due based on his/her assessment of the market value of the property at 1 May 2013.
I am further informed that if a liable person places an incorrect value on his/her property due to a genuine error or mistake, and as a consequence overpays the amount of LPT due, then Section 26 of the Finance (Local Property Tax) Act 2012 (as amended) provides that a claim for a refund of the overpaid amount may be made to Revenue, providing evidence for the revised valuation can be provided.
In the case raised by the Deputy, a completed form LPT 1 was submitted in respect of 2013 in April 2013 clearly indicating 'Band 2' as the appropriate valuation band. An amount of €112 was also paid, which is the correct amount in respect of 'Band 2' for the 2013 half-year.
A request to revise the valuation downwards to 'Band 1' was subsequently received by Revenue in October 2013. The request was supported with appropriate documentation confirming 'Band 1' as the correct valuation band.
Revenue has confirmed to me that the valuation band in this case has been amended from 'Band 2' to 'Band 1' on foot of the submission received in October and the surplus amount of €67 has been offset to the person's 2014 liability leaving a balance of €23 due in respect of that year.
Revenue will be making direct contact with the person in the coming days to confirm that the offset has been made and to advise the amount now due for 2014.
132. Deputy Gerry Adams asked the Minister for Finance if the Ard Deaglan complex in Dundalk, County Louth is a National Asset Management Agency owned property; if he considers the complex to be dangerous or derelict; and if he will make a statement on the matter. [52766/13]
View answerAs the Deputy will be aware NAMA does not own properties. NAMA is subject to similar legal requirements as other lenders that preclude it from disclosing details relating to its debtors and their properties.
133. Deputy Peadar Tóibín asked the Minister for Finance if he will provide a breakdown of the annual infrastructure and capital expenditure by his Department and on a regional basis and a county basis over the past five years. [52799/13]
View answerThe Capital spend from my Department over the past five years has primarily related to Centre for Management and Organisation Development (CMOD), now the Office of Government Chief Information Officer, Peace/Interreg projects and the Special EU Programmes Administrative body (SEUPB), all of which are now under the ambit of the new Department of Public Expenditure and Reform. A smaller amount relates to in-house IT and premises fit-out which, by its nature, is linked to the location of the Department's buildings (Dublin and Tullamore, County Offaly).
The Peace/Interreg projects are cross-border co-funded initiatives. If you require further detail of this expenditure we can request same from the managing authorities and send it to you under separate cover.
The history of the Department's capital spend over the past five years is set out in the table.
|
Year |
Capital Spend € '000 |
|
2009 |
934 (of which 571 CMOD, 363 Peace/Interreg/SEUPB) |
|
2010 |
277 (of which 89 CMOD, 188 Peace/Interreg/SEUPB) |
|
2011 |
0 |
|
2012 |
150 |
|
2013 |
150* |
*estimate
134. Deputy Seamus Kirk asked the Minister for Finance if he will consider extending tax relief for land leasing to companies who own agricultural land and wish to lease same; and if he will make a statement on the matter. [52810/13]
View answerTax relief for land leasing aims to incentivise the long-term leasing of farmland through encouraging more retired and part-time farmers to lease their land to younger farmers, especially those who are Young Trained Farmers. Widening the scope of this relief to include companies could lead to calls from other business sectors for a similar tax exemption, for instance, on rental profits. In addition, any changes to the land leasing provisions may be subject to EU State Aid approval. In any event, it is not clear to me that there is a difficulty here as companies who own land would tend not to want to lease it to those younger farmers.
The Department of Finance is often asked to consider new tax reliefs and incentives across all sectors of the economy without a full picture of how existing reliefs are working. The wide range of existing tax expenditures for the farming sector have grown up over time, largely on a piecemeal basis. It is very difficult to assess the effectiveness of existing schemes and whether or not they maximise value for money. The most recent estimates on the tax forgone to the sector is estimated at over €350 million, although there are a number of areas for which the data cannot be separated from other tax returns.
That is one of the reasons why I announced in my Budget speech that I would be commissioning a Review of the tax reliefs available to the farming sector. This is in line with the Department of Finance policy to review all tax expenditures on a regular basis.
The purpose of the Review will be to assess the costs and benefits of the various agriculture tax expenditures with a view to ensuring that the maximum benefit to the sector and the wider economy is obtained. The overall objective is not to change the level of Exchequer support to the sector through the tax system but rather to maximise the benefits to the economy for the existing level of State support and to ensure tax policy aligns with the objectives set out in Food Harvest 2020. Any recommendations would be considered in the context of Budget 2015. The issue of land leasing to companies is something that will be looked at in this Review.
There will be an opportunity for farmers and all those involved in the sector to give their views, once the review process is launched in 2014.
135. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 181 of 26 November 2013, the amount consultants (details supplied) are being paid in their consultative and drafting role; if the contract was tendered for or a direct award; and the person that decided which external consultants would be used. [52824/13]
View answerAn invitation to tender for assistance and analysis in the preparation of a Medium-Term Economic Strategy, including an analysis of recent medium-term economic strategies in countries/regions comparable to Ireland, and to provide related advice on the effective development and implementation of the Strategy was published on eTenders on 20th August 2013. The tender document was also forwarded directly to a number of economic consultancy firms. The award criteria upon which responses were to be evaluated were:
- Methodological Approach
- Understanding of assignment
- Relevant Experience of staff and resources to be provided to assignment
- Ultimate Cost
Two responses were received within the 10th September deadline. Following evaluation of both responses by an evaluation committee of Department of Finance officials, it was decided to award the consultancy contract to the consultants named by the Deputy on the basis that theirs was the most economically advantageous proposal, taking account of all the award criteria. This was also the lowest cost proposal.
The total VAT exclusive value of the contract is €39,873.
136. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 181 of 26 November 2013, the value of the contract awarded to a company (details supplied); if the contract was awarded by public tender or direct award; and the person that decided the design of the medium term economic strategy would be outsourced. [52827/13]
View answerThe entity to which the Deputy refers is an ongoing local authority initiative to promote Irish design. The entity offered to provide assistance to the Department of Finance to develop a design scheme for the Medium-Term Economic Strategy document which will help ensure that its message and goals are communicated with maximum clarity to the widest possible readership in Ireland and abroad. This offer was accepted by the Department. The local authority entity has undertaken this work as part of its in-house design promotion programme, therefore no tendering process or contract were required.
137. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 181 of 26 November 2013, if the ESRI is being paid for its consultative work on the strategy; if so, the value of the payment-contract; if the contract was awarded by public tender or direct award; and the person who decided they would be used as consultants on the process. [52828/13]
View answerAs part of the preparation of a Medium-Term Economic Strategy, requests for tenders for assistance in modelling medium-term supply-side changes to the Irish economy were issued to three parties on the 9th August. The goal of the modelling exercise was to quantify the impacts of potential supply-side economic reforms relative to a baseline scenario. Three responses were received within the 30th August deadline, with one party indicating they would not be submitting a tender. The award criteria set out in the request for tender and used to assess submitted responses were:
- Cost
- Experience of the organisation in providing macroeconomic and fiscal modelling in Ireland
- Research history and knowledge of the Irish economy
- Understanding of the assignment
- Possession of a peer-reviewed macroeconomic model of the Irish economy which allows modelling of supply shocks to multiple sectors
Following evaluation of the two positive responses by an evaluation committee of Department of Finance officials, it was decided to award the consultancy contract to the ESRI on the basis that theirs was the most economically advantageous proposal, taking account of all the award criteria. The value of the contract is €28,750 (VAT exclusive).
In addition to the ESRI work related to modelling medium term supply-side changes to the Irish economy as set out above, a smaller direct award contract was made for a piece of work on spatial issues to the value of €3759 (excluding VAT). This work was approved through the normal channels in the Department.
138. Deputy Noel Harrington asked the Minister for Finance if he will amend the regulations regarding the single parent tax credit for 2014 so that by agreement it can be split between the parents on a 75%-25% or a 50%-50% basis or that it can be claimed by both parents on alternate years; and if he will make a statement on the matter. [52854/13]
View answerAs the Deputy is aware, the One-Parent Family Tax Credit (OPFTC) 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 OPFTC and will also carry the same entitlement to the extended standard rate tax band of €36,800 per annum.
The proposed new credit, should the changes be approved by the Oireachtas, will operate differently from the One-Parent Family Credit, such that the credit will be available in the first instance, to the primary carer, that is, the single individual with whom the child resides for the greater part of the year. In addition I introduced an amendment at Committee Stage in the Dáil to allow the primary carer to relinquish the credit such that a non-primary carer can claim it in certain circumstances.
If the primary claimant relinquishes the credit, a secondary claimant may claim it. The child must reside with this individual for over 100 days in aggregate in the year, which is indicative of a level of involvement in the care of the child that is supportive of the primary claimant. For the purpose of this limit a day can include the greater part of a day.
The new credit will be an activation measure and it is designed to be an in-work benefit to support the primary carer to take up, or remain in, employment. It will assist single parents or carers with the cost of childcare. Where a primary carer chooses to relinquish the credit, it will assist a non-primary carer to take up or remain in employment The purpose of relinquishment is to ensure that if the primary claimant has insufficient income or does not wish to avail of the credit, a secondary claimant with whom the child resides for over 100 days in the year may claim it in recognition of their involvement with the child and the support they provide to the primary claimant.
I am advised by the Revenue Commissioners that this procedure of relinquishment means that two individuals could, by agreement among themselves, alternate claiming the credit with the primary claimant getting it in year one, and the secondary claimant in year two, and so on.
Given the difficult fiscal environment it is essential to review all tax reliefs, credits and incentives in order to ensure that they are properly targeted and if necessary re-focused in order that they can achieve the socio-economic objectives that are set for them.
Allocation of childcare responsibilities is primarily for parents to agree. Therefore, I have no plans to amend the legislation to allow for the splitting or apportioning of the new tax credit.
This new policy has been agreed by Government based on a recommendation put forward by the Commission on Taxation that the credit should be retained but that it should be confined to the principal carer only. I am satisfied that the restructuring of the credit will achieve such an outcome.
139. Deputy Michael McGrath asked the Minister for Finance the role of the consumer advisory group within the structure of the Central Bank; the number of times they have met in 2013; the reports, if any, that have been issued; and if he will make a statement on the matter. [52868/13]
View answerI have been advised by the Central Bank that the role of the Consumer Advisory Group (CAG) is to advise the Central Bank on the performance of its functions and the exercise of its powers in relation to protecting consumers of financial services. There are five members of the CAG. Appointments are for a three-year period and members serve on a voluntary basis. A list of the members is as follows:-
- Michael Culloty
- Dermott Jewell
- Elaine Kempson
- Bill Knight
- Dr Anthony Walsh
As the role of the CAG is an advisory one, they do not publish reports on their activities and recommendations. The Central Bank publishes a summary of items discussed at each meeting on its website.
The CAG has met four times in 2013 and a summary of each meeting is available on the Central Bank's website: www.Centralbank.ie.
140. Deputy Pearse Doherty asked the Minister for Finance if the overall valuation of Irish Bank Resolution Corporation's loan book was completed as scheduled on 30 November; the overall value of same; the way it compares to the valuation at February 2013; and if a further injection of money will be required by IBRC in 2014. [52876/13]
View answerI have been advised by the Special Liquidators that the overall valuation of Irish Bank Resolution Corporation's loan book was completed as scheduled on 30 November.
The information requested will not be published as it is commercially sensitive financial information which could potentially have a detrimental impact on asset recovery from the impending sale process.
The Minister for Finance will only be required to compensate NAMA if the amount raised from the sale of assets by the Special Liquidator is insufficient to cover amounts due to NAMA. The financial outcome of the liquidation will not be known with any certainty until the asset sale process has completed. However, the feedback received from the Special Liquidators thus far is that they are very pleased with the volume and value of bids received to date and a shortfall for NAMA is currently not expected.
141. Deputy Seamus Healy asked the Minister for Finance in view of the fact that any option to sell the preference shares to third party investors is a decision for the State alone, if he has decided to sell any of the preference shares held by the State in Bank of Ireland to third party investors; if he has, the portion of the preference shares that will be sold to third party investors; in view of the fact that the value of the preference shares to the State will automatically rise by 25% next March, the way such a sale serves the interests of the Irish people; and if he will make a statement on the matter. [52883/13]
View answerLast Wednesday, December 4th, after the Deputy's question had been submitted; I announced the successful exit by the State from its €1.837 billion of Preference Shares held in Bank of Ireland.
The State has received 100% of par value on €537 million of the securities which the bank was entitled to redeem through the issuance of new equity and secured a price of 104.75% of par on the remaining €1.3 billion of preference shares which were sold to investors following a book build exercise by a consortium of banks.
The successful exit by the State from its Bank of Ireland Preference Shares is a very positive and welcome development and sees the State recoup circa €2.05 billion from this investment. These proceeds comprise the return of our principal which is €1.837 billion, a profit of €62 million, and accumulated interest of €151 million.
The Preference Shares, which date back to early 2009, form part of the €4.7 billion total investment made by the State in Bank of Ireland. Under the terms of the Preference Shares, the Bank was entitled, subject to regulatory capital considerations, to redeem the Preference Shares at any time. Therefore, a decision to hold onto the Preference Shares could not be made unilaterally. The step-up only crystallised in circumstances where the Bank was unable to redeem the Preference Shares before 31st March 2014. In this transaction the bank exercised its legal right to redeem up to €537m of the shares at par while the State took the decision to sell the balance of €1.3 billion for a premium.
In deciding whether to support the transaction the State had to assess the probability that the Bank might opt to execute a rights issue and use the proceeds to redeem all the Preference Shares at par. In this scenario, the State would have foregone this €62m profit. I was aware when making this decision that market conditions were extremely favourable at this time, enabling us to maximise the return to the State.
Following this transaction the State will have recouped a net positive cash return of circa €1.1 billion from its overall investment and support to the bank.
This net cash return is before account is taken of our continuing equity investment in Bank of Ireland which is worth a further €1.2 billion at current market prices. This value takes account of the issuance of new shares to investors, which will see the State's equity stake fall from 15.1% to circa. 14.0%. Hence the State expects to record a significant profit from its total support of and investments in Bank of Ireland.
142. Deputy Kevin Humphreys asked the Minister for Finance if he will provide a breakdown of the €55,782,000 of miscellaneous expenditure as outlined in Note 5 Non-Voted Current Expenditure in the November Exchequer statement; and if he will make a statement on the matter. [52885/13]
View answerOf the €55.782 million of non-voted current expenditure presented as miscellaneous expenditure in the end November 2013 Exchequer statement, €55.765 million occurred during the month of November. This can be broken down into 2 different categories. The first category of €52.658 million represents a balance in respect of the Department of Social Protection (DSP) with the Central Fund on 30 November 2013. This funding was advanced to provide adequate cash flow to prefund monthly Departmental scheme expenditure.
Under Government accounting rules such advances may not be regarded as voted current expenditure until their disbursement. They may arise due to timing differences where there is prefunding at month end and matching expenditure at the start of the subsequent month. Such unspent advances issued from the Central Fund are recorded as cash equivalent assets of the Department at month end.
It should be noted that similar balances have occurred in respect of the DSP in previous years for the same reason of ensuring adequate cash flow to prefund and meet scheme expenditure as it arises.
The second category consisting of payments of €0.311 million and €2.796 million are in respect of Ireland's contributions in 2013 to the General Capital Increase (GCI) and the Selective Capital Increase (SCI) of the World Bank (International Bank for Reconstruction and Development (IBRD)).
In common with other international financial institutions and in the context of governance reforms to strengthen the representation of developing countries, the World Bank adopted Resolutions in 2010 providing for an increase in its authorised capital in order to ensure a sufficiency of resources to respond to increased lending requirements in the light of the financial crisis. Ireland's participation in the capital increase is in line with its existing pro-rata share of IBRD capital. Under the World Bank's Procedures for Subscriptions to the GCI and SCI, the paid-in element comprises 6% of the value of the additional shareholding, of which 10% (i.e. 0.06%) is paid in US dollars and the remainder in euro. The amounts of €0.311 million and €2.796 million correspond to the breakdown on this basis of the 2013 instalment. In line with the subscription arrangements, Ireland's contributions are being paid in approximately equal annual instalments in each of the years 2013 to 2016 inclusive in the case of the GCI, and 2013 to 2015 inclusive in the case of the SCI.
143. Deputy Michael McGrath asked the Minister for Finance the number of rent receivers appointed to date in 2013 by the Irish headquartered banks; and if he will make a statement on the matter. [52894/13]
View answerThe Central Bank has advised that it does not publish statistics on the number of rent receivers appointed by Irish headquartered banks. However, the covered institutions have provided me with the following details regarding their use of rent receivers.
Bank of Ireland's last reporting date in August for the end of June showed that there were 1,235 properties where a Fixed Charge Receiver has been appointed or approved.
AIB has informed me that to date the bank has appointed fixed asset receivers to over 540 residential properties with a further 250 properties expected to be appointed before the year end.
PTSB has advised that it has appointed 3 Receivers of Rent (Receivers) year to date in respect of buy-to-let (BTL) properties. 144 properties (on 110 accounts) have been affected by this appointment in the year to date. The bank has advised that its 'Receiver Strategy' for its BTL portfolio continues to be centred on a case-by-case analysis. Appointments are made where it is deemed to be the most appropriate outcome for both the customer and the bank. The appointment of a Receiver is currently pending on 10 BTL properties (10 accounts).
It should be noted that under the terms of the Relationship Framework that govern the relationship between the Minister for Finance and the State supported banks, the respective Boards and Management teams retain responsibility and authority for determining the banks' strategies and commercial policies and conducting their day-to-day operations. The appointment of rent receivers to properties therefore is an operational decision for the Boards and Management teams of those institutions.
144. Deputy Michael McGrath asked the Minister for Finance the amount of local property tax due for 2014 that has already been collected at the end of November 2013; and if he will make a statement on the matter. [52895/13]
View answerInitial forecasts for Local Property Tax (LPT) receipts envisaged a yield of €250m for 2013 and €500m in 2014. In light of taxpayer payment patterns for the 2013 liability, the anticipated yield for 2013 was increased to €300 million to take account of potential payments in respect of 2014. I am advised by the Revenue Commissioners that by the end of November 2013, the total LPT that had been transferred to the Exchequer by Revenue amounted to approximately €287m. Of this amount, approximately €65m relates to 2014 LPT, with the balance of €222m relating to 2013 LPT.
