Written Answers Nos. 21-35
22. Deputy Charlie McConalogue asked the Minister for Finance the cost to the State in 2011, 2012 and 2013 of the illegal cigarette trade; the procedures and plans his Department has in place to tackle this growing problem especially in Border counties in view of the fact that a nationwide survey found that 24.5% of cigarettes sold in Letterkenny are illegal compared to a national average of 13%; and if he will make a statement on the matter. [8365/14]
View answerI am advised by the Revenue Commissioners that the extent of the illicit cigarettes market in Ireland is estimated through annual surveys of smokers. These surveys are undertaken for Revenue and the National Tobacco Control Office of the Health Services Executive by IPSOS MRBI. The survey for 2012 found that 13% of cigarettes consumed in Ireland are illicit. The comparable figure for 2011 was 14%. This would suggest that the extent of the problem is being contained, as a result of the extensive action being taken against the smuggling and sale of illicit product. A further survey was carried out at the end of 2013 and the results of this will be available in the coming months.
The Deputy will of course appreciate that estimating the scale of any illegal activity and the resultant tax loss is difficult. I am however satisfied that the IPSOS MRBI survey is the best indicator of the extent of the market in illicit cigarettes. This is because of the methodologies used and the consistent manner in which the survey has been undertaken over a number of years. In addition, the survey methodology is, unlike other methodologies such as empty pack surveys, capable of distinguishing between legal personal imports and illicit cigarettes. The survey is also geographically representative and, unlike others, takes social class, age, gender and nationality into account.
In looking at the higher estimates of the level of illicit consumption that come from other sources, it needs to be borne in mind that the tobacco industry claims must be viewed in terms of their interest in minimising tax increases while imposing significant price increases of their own. Data from the IPSOS MRBI surveys would indicate nominal annual losses in the order of €258 million and €240 million, in excise duty and VAT, in 2011 and 2012 respectively.
I am assured by the Revenue Commissioners that combatting the illegal tobacco trade is, and will continue to be, a high priority for them. Their work against this illegal activity includes a range of measures designed to identify and target those who are engaged in the supply or sale of illicit products, with a view to seizing the illicit products and prosecuting those responsible. This multifaceted strategy includes ongoing analysis of the nature and extent of the problem, developing and sharing intelligence on a national, EU and international basis, the use of analytics and detection technologies and ensuring the optimum deployment of resources at points of importation and within the country.
Interception of illicit tobacco products is achieved through a combination of risk analysis, profiling, intelligence and the screening of cargo, vehicles, baggage and postal packages. Revenue officers also target the 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.
There is extensive cooperation with An Garda Síochána in combatting the illicit trade, and the relevant agencies in the state also work closely with their counterparts in Northern Ireland, 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. In addition, cooperation takes place with other Revenue administrations and with the European Anti-Fraud Office, OLAF, in the ongoing programmes to tackle the illicit trade at international level.
In relation to tackling this problem in border counties in particular, Revenue advise me that they have an enforcement presence at key strategic locations in the border counties, and enforcement strength is regularly augmented with additional personnel on a risk assessment basis, or when particular operations against illegal activity are taking place. 10.66 million illicit cigarettes were seized in Revenue's Border Midlands West Region in 2013, and there were 15 convictions during 2013 arising from detections in the Region of the selling or smuggling of illicit tobacco products.
The Revenue Commissioners will remain committed to acting against all stages of the supply chain for illicit tobacco products and 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. A new multi-annual strategy for dealing with the problem is being drawn up, and the Revenue Commissioners will consult with key stakeholders in preparing this document.
23. Deputy Michael McGrath asked the Minister for Finance the current position in relation to the assessment of the health of the credit union sector; the issues that have been identified; the timeline for action; if further financial resources will need to be available to the sector; and if he will make a statement on the matter. [8383/14]
View answerThe Government established the Commission on Credit Unions in May 2011 to make recommendations in relation to the most effective regulatory structure for credit unions, taking into account their not-for-profit mandate, their volunteer ethos and community focus, while paying due regard to the need to fully protect members' savings and financial stability. The Commission published its final Report in March 2012 and identified the financial position of credit unions in Ireland, stating that the declining fortunes of the Irish economy have not only put an additional brake on credit union development but have contributed to regression in some credit unions. To address this the Commission set out a wide range of measures, including, specifically in relation to the stability of the sector, recommendations regarding restructuring, stabilisation and resolution.
A core recommendation was that the sector be restructured on a voluntary, incentivised and time-bound basis to enable credit unions benefit from economies of scope and scale. The Government contributed €250 million to the Credit Union Fund in December 2012 to support the restructuring of the credit union sector which is being overseen and facilitated by the Credit Union Restructuring Board - ReBo. Any funding provided to credit unions will be on a recoupable basis. ReBo is working to the timetable set out in the Commission's report and is expected to complete its work by the end of 2015.
The Commission also recommended that a statutory stabilisation fund be established to address problems in credit unions that are under-capitalised but are otherwise viable. The statutory basis for stabilisation is in place under the Credit Union and Co-operation with Overseas Regulators Act 2012 and my Department will begin consultation on the introduction of the stabilisation levy this month. The target is to have a stabilisation levy in place by end quarter 2 2014.
Another recommendation of the Commission was that the powers provided by the Central Bank and Credit Institutions (Resolution) Act 2011 should be considered for those credit unions that meet the conditions or grounds as set out in that Act. The Government has provided resolution funding of €250 million. Funding will be based on recoupment over the medium term by a levy under the Central Bank and Credit Institutions (Resolution) Act 2011.
The Credit Union and Co-operation with Overseas Regulators Act 2012 implements over sixty of the Commission's recommendations which will help underpin the stability of the sector. The Act contains measures to reform and strengthen credit unions over four broad areas namely: Prudential regulation; Governance measures; Restructuring and Stabilisation. The Act is being commenced in accordance with the published Implementation Plan, which allows credit unions sufficient time to prepare for these changes.
I am satisfied that these measures, together with governance and regulatory changes, introduced on foot of the Commission Report will underpin a stable credit union sector into the future.
24. Deputy Pearse Doherty asked the Minister for Finance the way he has communicated to the banks that under the MART process letters threatening legal action do not constitute a sustainable offer. [8349/14]
View answerThe Central Bank's Code of Conduct on Mortgage Arrears (CCMA) places an onus on the banks, in respect of a co-operating borrower, to explore all the options for an alternative repayment arrangement offered by the lender to address a primary dwelling mortgage difficulty before any legal action is considered.
Furthermore, as the Deputy is aware, under the MART process, the Central Bank is requiring the main lenders to work through their mortgage accounts in arrears of more than 90 days and, where possible, to propose and conclude sustainable restructures with their borrowers in arrears. The Central Bank has indicated that all six mortgage lenders covered by the MART process have reported that they met the 20% proposed sustainable solutions target for the second quarter of 2013 and also the 30% target for the third quarter in 2013. In particular, with respect to the third quarter 2013 target, which is the latest available data, the lenders have reported to the Central Bank they had issued proposals to 43% of mortgage accounts in arrears against the 30% target. In that context the Central Bank has also advised that its MART publication of last March clearly indicates the where a lender relies on legal action to address an arrears situation it must be able to demonstrate that an alternative arrangement could not be reached or is not appropriate. Furthermore, if such a decision is made by the lender, the cooperating borrower has the right to appeal a decision not to offer an alternative repayment arrangement.
Of course, the CCMA and MART can only work in circumstances where the borrower cooperates with the lender and engages with the process. Where this does not happen, the lender may have no other option but to go down the legal route to deal with an arrears case. However, if that course of action leads the borrower to commence a constructive engagement, this can lead to a more favourable outcome for the respective parties. The Deputy may wish to note, that according to information collected by my Department, in the case of private dwelling homes some 51,000 mortgage accounts in difficulty have been the subject of permanent restructuring following engagement between borrower and lender. A further 21,000 mortgage accounts in difficulty have been the subject of temporary restructures.
The strong view of the Government is that, in respect of co-operating borrowers under the Central Bank's MART process, repossession of a person's primary home should only be considered as a last resort and that every effort should be made to agree a sustainable arrangement as an alternative to repossession.
It is important to point out, however, that even if a repossession case has commenced in the legal system, the Land and Conveyancing (Law Reform) Act 2013 now provides a power to the Court to adjourn a repossession proceeding in relation to a principal private residence to enable the borrower to consult a personal insolvency practitioner (PIP) and, where appropriate, to instruct the PIP to make a Personal Insolvency Arrangement (PIA) proposal. In formulating a proposal for a PIA, the Personal Insolvency Act 2012 places an onus on a PIP to do so on terms that shall not insofar as reasonably practicable, require the borrower to dispose of an interest or cease to occupy a principal private residence.
I have informed the Deputy previously that letters threatening repossession or legal action could not in my opinion be considered a sustainable solution under the mortgage arrears targets, and should only ever be considered after every possible avenue for solution has been exhausted. I can assure the Deputy that I have expressed this view to the lenders and my officials are keeping in regular contact with the lenders on this important issue.
25. Deputy Derek Nolan asked the Minister for Finance his plans to introduce further fiscal measures to incentivise the tourism and services sectors, such as the extension of the 9% VAT rate to other service operators; and if he will make a statement on the matter. [8247/14]
View answerVAT is charged on the supply of goods and services, and the rate applying is subject to the requirements of EU VAT law with which Irish VAT law must comply. While the majority of tourist related services apply at 9% it is not possible to extend this treatment to all tourist activity, such as tour guide services, and the short-term hire of cars, boat, caravans and mobile homes, which currently apply at the 13.5% reduced rate. These services should ordinarily apply at the higher standard rate, which is the case in most other EU Member States. However, as Ireland applied a reduced rate to these items on 1 January 1991 we are entitled to continue applying that reduced rate, provided it is 12% or greater. In this context, it is not legally possible to apply the rate of 9% to tour guide services, and the short-term hire of cars, boat, caravans and mobile homes.
The 9% VAT rate on tourism related goods and services has had and continues to have a very positive effect on the growth and sustainability of that sector. The most recent data available from the CSO of economic growth broken down by sector relates to the year 2012, and shows that there was a year-on-year growth in gross value added for the accommodation and food services sector, compared to 2011. Expenditure by overseas travellers to Ireland recorded an increase of 0.6% in 2012 compared with 2011. In addition, over the first three quarters of 2013 there was a 13% increase in expenditure when compared with the same period in 2012. There is a clear impact in terms of employment in the accommodation and food service sector which has increased by over 16% between the period Q2 2011 to Q3 2013 an increase of over 18,000 jobs in seasonally-adjusted terms. In terms of numbers of trips to Ireland, the total number was up by 7.2 per cent in 2013 when compared with 2012 and up 7.4 per cent compared to 2011.
26. Deputy Mick Wallace asked the Minister for Finance his views on a recent research paper (details supplied) which argues that US subsidiaries in Ireland have an effective tax rate of 2.2%; and if he will make a statement on the matter. [8344/14]
View answer30. Deputy Richard Boyd Barrett asked the Minister for Finance if he will address the growing controversy around Ireland's effective corporate tax rate following the recent academic paper suggesting a 2.2% effective rate here; and if he will make a statement on the matter. [8363/14]
View answerI propose to take Questions Nos. 26 and 30 together.
The issue of effective tax rates has been the subject of a number of Parliamentary Questions and discussions at the Joint Committee on Finance and Public Expenditure and Reform over the past 12 months.
I think it's important to note at the outset that two separate issues are often confused in discussions on the effective rate of corporation tax. The first issue is the global rate of tax which is paid by multinational companies. This is a 'blended' rate and takes into account the amount of tax charged across all of the countries that a company trades in and not just Ireland.
The extremely low effective rate figures quoted in the research paper referred to in the question are based on a flawed premise. They are running together the profits earned by group companies in Ireland and in other jurisdictions and incorrectly suggesting that Irish tax does or should apply to both.
The figures are estimated by dividing the amount of Irish tax paid by a total profit figure that includes substantial profits made by companies that are not tax resident in Ireland. Ireland cannot tax profits that are properly attributable to other jurisdictions.
The ability of some multinationals to lower their world-wide rate of tax using international structures reflects the global context in which Ireland and indeed all countries operate. The best way to effectively address this issue is for countries to work together at the international level and the appropriate action is being considered in this regard by the OECD as part of their project on Base Erosion and Profit Shifting and Ireland is participating fully in this process.
The second issue is the effective rate of tax applying in individual countries. Clearly, the domestic rate of tax paid in Ireland is within the control of the Irish tax system and Ireland is responsible for the amount of Irish corporation tax that is charged here. I want to re-emphasise that all companies operating in Ireland domestic businesses and multinationals - are chargeable to corporation tax at the 12.5% rate on the profits that are generated from their trading activities here. A higher 25% rate applies in respect of investment, rental and other non-trading profits, as well as certain petroleum, mining and land-dealing activities, and chargeable capital gains are taxable at the capital gains tax rate of 33%.
There are different ways of measuring the effective rate of corporation tax and there is no single internationally agreed comparative measure for this. There are however a range of independent studies that show the effective rate in Ireland as being very close to the main headline rate of 12.5%. The European Commission's Taxation Trends in the EU 2013 indicates an effective corporation tax rate for Ireland of 14.4% per cent. The Price Waterhouse Coopers / World Bank 2014 report shows an effective rate of 12.3% for Ireland. I know that the assumptions being used in that latter study have been challenged and I am not claiming ownership of the figures but they are examples of the way that different methodologies can produce different results. In response to the growing interest in the subject, the Revenue Commissioners now publish an additional explanatory note with their annual Statistical Report.
The 2012 Revenue Statistical Report (which refers to 2011 data) indicates that aggregate net taxable profits, after taking account of various deductions, allowances, charges and reliefs, amounted to €40.1 billion while the total amount of corporation tax payable on these profits was €4.2 billion. This means that total corporation tax payable as a percentage of taxable profits was approximately 10.5 per cent for 2011. While this percentage is lower than the 12½ per cent rate, this can be attributed to the availability of certain reliefs such as double taxation relief and the R&D credit for example.
The issue of effective rates of corporate tax was discussed at length at Committee Stage of Finance No. 2 Bill 2013 last November. In view of the significant confusion around the issue, it was agreed that my Department would prepare a report on the matter to be presented to the Oireachtas Finance Committee by the end of Quarter 1 this year. This report is currently being prepared and will likely be published upon completion.
27. Deputy Kevin Humphreys asked the Minister for Finance in the event of insurance companies not providing flood cover to home owners and businesses where flood defences have been built with State funds, following a voluntary memorandum of understanding between the Office of Public Works and the insurance industry for the sharing of information regarding these defences, if he will introduce regulations or conditions on their operating licence by legislation or regulation through the Central Bank of Ireland to ensure homes can get cover; and if he will make a statement on the matter. [8245/14]
View answerThe issue of flood cover and its unavailability in some instances is one with which I am very familiar. I am also very conscious of the difficulties that the absence of such cover can cause to householders and businesses. While the lack of availability of flood insurance affects a relatively small number of people, the consequences for these people are serious should their house or commercial premises be damaged by flooding. However, neither I, as Minister, nor the Central Bank, have the power to direct insurance companies to provide flood cover to specific individuals.
The issue of provision of new flood cover or the renewal of existing flood cover is a commercial matter for insurance companies, which is based on a proper assessment of the risks they are accepting and the making of adequate provisioning to meet these risks. In some cases flood insurance is not economically viable for insurance companies and, in the interests of keeping premiums affordable for policyholders in general, insurers decline flood cover for new business for some risks, or, in certain cases, need to withdraw flood cover at renewal. These are commercial decisions that insurers make having regard to the circumstances prevailing.
My colleague, Minister of State Hayes at OPW has taken the lead role in discussions with the insurance industry about improving the provision of insurance cover in areas where remedial works are being carried out and OPW is near agreement on a data-sharing platform which will facilitate the transfer of detailed information on completed OPW flood relief schemes on an on-going basis. This will allow the insurance industry to take the flood protection measures into account when assessing flood risk in localities where such flood measures have been completed.
While the agreement on the memorandum of understanding with the insurance industry is to be welcomed as a first step, ultimately, it will be a matter for the insurance companies themselves to decide how they will use the information provided on completed flood defence works but they are committing to take the information into account in their assessment of risk and it is to be expected that this will facilitate the provision of flood cover in areas that are protected by completed schemes.
The Central Bank's Consumer Protection Code sets out how the Central Bank requires insurance companies to treat consumers. The Code obliges insurers to act honestly, fairly and professionally in the best interests of its customers and that they must act with skill and diligence in the best interests of customers. The Code has a number of sections specifically dealing with insurance claims handling. The Central Bank of Ireland has no remit over the pricing of insurance products or the practices of insurers in relation to underwriting particular risks. Indeed the Central Bank, along with all E.U. Competent authorities is specifically restricted from doing so under the various European insurance directives.
In cases where individuals who are experiencing difficulty in obtaining flood insurance believe that they are being treated unfairly, they can contact Insurance Ireland which operates a free Insurance Information Service for those who have queries, complaints or difficulties in relation to insurance. Their service can be contacted at (01) 676 1914 or by email at info@insuranceireland.eu.
28. Deputy Richard Boyd Barrett asked the Minister for Finance the action he will take to deal with rapidly rising rents in Dublin and other urban centres particularly in terms of reviewing the appropriateness of real estate investment trusts, the private housing and rental market generally and the policies of the National Asset Management Agency; and if he will make a statement on the matter. [8364/14]
View answerAccording to the consumer price index, private rents rose nationally by 6.0 per cent in 2013, following on from an increase of 2.5 per cent in 2012. However, this follows a fall of over 25 per cent between 2008 and late 2010. It is important to note that, on this basis, private rents are now at approximately the same level as they were in January 2003.
The PRTB rental index, which provides a geographical breakdown of developments in the residential market, shows that monthly rent levels were up by 6.4 per cent on a mix-adjusted basis in Dublin in the year to Q3 2013. Rents outside the capital were down by 0.2 per cent over the same period. As a result, rents in Dublin stood 14.1 per cent below the levels seen in Q3 2007 (the beginning of the index), with rents outside Dublin down 23.4 per cent over the same period.
As regards Real Estate Investment Trusts, I would like to highlight that potential benefits for property tenants were a motivating factor in the introduction of the REIT framework last year. REITs are specifically designed for the long-term holding of income-producing property. They are not designed to hold development activities, or to be a vehicle for short term speculative gains, and so can provide greater scope for stable, long-term tenancies.
The first REIT launched in July 2013, and made its first property purchases in October 2013, so there has not as yet been sufficient time to determine the impact, if any, which REITs have had on rental prices in Ireland. To date the REITs that have launched have focused on the commercial sector. My officials will be monitoring the uptake of REITs in the Irish property market, but it is not expected that REIT ownership of property will reach the level of concentration at which a distortion of competition in the market may occur.
As regards the National Asset Management Agency, NAMA is funding both unfinished housing units and new development. It is estimated that approximately 4,500 residential properties will be completed and available for sale or rent in Dublin over the 2014-16 period through NAMA debtors/receivers or joint ventures involving NAMA. In addition, NAMA is funding the completion of existing and the development of new residential developments in the main urban areas to which it has an exposure. NAMA is working closely with the various local authorities in this respect. NAMA has indicated that in many instances, planning issues and other obstacles need to be resolved to facilitate the delivery of new residential supply.
In summary, I wish to assure the deputy that my Department will continue to monitor developments in the property and rental markets. As set out in the Government's Medium Term Economic Strategy, the Government will continue to work on addressing remaining challenges in the property and construction sectors. This will include developing an overall strategic approach to housing supply, identifying and implementing further improvements in the planning process to facilitate appropriate development, and seeking to improve financing options for development and mortgage provision.
29. Deputy Pearse Doherty asked the Minister for Finance the number of times he has formally raised the issue of the retrospective recapitalisation at the Eurogroup or ECOFIN meetings since September 2012. [8348/14]
View answerAs I have outlined in my replies to a number of previous Parliamentary Questions, the Euro-area Heads of State or Government (HoSG) agreed in June 2012 that "it is imperative to break the vicious circle between banks and sovereigns", and that when a Single Supervisory Mechanism, involving the ECB, is in place and operational, the European Stability Mechanism could recapitalise banks directly.
Since September 2012, the issue of direct recapitalisation by the ESM has been on the Agenda of the Eurogroup on seven occasions (21st January 2013, 11th February 2013, 4th March 2013, 12th April 2013, 13th May 2013, 20th June 2013 and 17th February 2014). Discussions at Eurogroup have focussed on the establishment of the ESM's Direct Recapitalisation Instrument (DRI) which will provide the source for any possible future retrospective recapitalisation.
The Eurogroup meeting on 20th June 2013 referred to above agreed on the main features of the European Stability Mechanism's Direct Recapitalisation Instrument or DRI. There is a specific provision included in those main features, which states that "The potential retroactive application of the instrument should be decided on a case-by-case basis and by mutual agreement." Therefore, the agreement, that we were active in negotiating, keeps open the possibility to apply to the European Stability Mechanism for a retrospective direct recapitalisation of the Irish banks, should we wish to avail of it.
Finally, both I and my Government colleagues will ensure that Ireland's case for retrospective direct recapitalisation is made at all levels as appropriate. I remain confident that the commitment made by the Euro-area Heads of State or Government in June 2012 to break the vicious circle between banks and sovereigns will be respected.
31. Deputy Michael McGrath asked the Minister for Finance his views on whether the lack of competition in the banking sector is leading to increased fees and charge as well as greater use of cash in the domestic economy; and if he will make a statement on the matter. [8381/14]
View answerI accept that the level of competition in the Irish banking sector has reduced as a result of the recent decisions by ACC and Danske Bank to withdraw, following the withdrawal of Bank of Scotland (Ireland) some time ago. Over time, I expect that the restructuring of the banking sector and the recovery of the economy will present opportunities for the entry of new market participants well positioned to be confident in the future profitability of an Irish branch or subsidiary. The Government continues to work to create an environment conducive to the entry of such new entrants through a number of initiatives and have led the debate at EU level on the mechanisms to promote alternative forms of financing for SMEs.
The Government has also taken steps to ensure that the Irish financial market is accessible to any financial institution considering establishing in Ireland. In seeking to reduce the barriers to entry which are specific to the Irish banking market, Section 149 of the Consumer Credit Act (as amended), which provides for the regulation of bank fees and commissions has been disapplied for three years in the case of new financial service providers setting up in Ireland.
As the Deputy is aware bank fees and charges are subject to regulation under Section 149. This section came into effect in 1996 and currently requires that credit institutions, prescribed credit institutions and bureaux de change must make an application to the Central Bank if they wish to introduce new customer charges or increase any existing customer charges in respect of certain services. Section 149 does not cover interest rates; it applies to fees and commissions only.
My Department recently published a review of the regulation of bank fees and charges which is available on its website www.finance.gov.ie. The review concluded that it would not be appropriate to repeal section 149 at this time. The lack of competition in the banking sector means that the removal of section 149 would give unfettered price setting power to the incumbent banks. However, the report recommended that the issue should be revisited when competition in the banking sector has improved significantly. It is my view that the current regulatory regime offers appropriate protection to consumers against unjustified increases in bank fees and commissions.
It is true that Ireland continues to rely heavily on cash and other paper payment instruments. This has significant implications for cost competitiveness, security and consumer choice in Ireland. The efficiency of Ireland's payment systems infrastructure could be improved if greater use were made of secure and efficient electronic payments, leading to a reduction in the proportion of transactions involving cash and cheques. The Deputy will be aware of eDay which is on 19 September 2014. The announcement of eDay was made by Minister of State Brian Hayes last September so as to give Government Departments, Local Authorities and other state agencies sufficient time to prepare for it. eDay is the day from which these authorities will no longer accept cash or cheques from businesses or make payment to businesses by way of cheques. It is expected that this initiative will yield savings to the authorities and, alike, to the businesses.
32. Deputy Seán Kyne asked the Minister for Finance in view of the fact that the policy of ensuring that persons whose loans or business interests are acquired by the National Asset Management Agency are not eligible to purchase said loans-business interests when sold by NAMA, if he will provide assurances that appropriate procedures, checks and balances are in place to ensure that such persons do not purchase or acquire the same business interests through holding companies or other such indirect means. [8294/14]
View answerWhere NAMA approves the sale of any loan or approves the sale of any secured property by a debtor, it requires a confirmation that the purchaser is not connected to the debtor or other obligers. As part of this process, NAMA requires that the selling agent prepares a final report and recommendation for each sale, which includes, inter alia, confirmation that the agent has reviewed the purchaser s confirmation relating to connected party sales and a statement disclosing any commercial relationship between the agent, debtor, purchaser or purchaser's ultimate beneficial owners in the past five years.
33. Deputy Pearse Doherty asked the Minister for Finance if he will release the letter sent by Jean-Claude Trichet of 19 November 2010 regarding the Irish bailout to the banking inquiry if requested. [8347/14]
View answerThe position in regard to the release of this letter remains largely as I outlined in my replies to Parliamentary Questions 155 of 28th June 2011, 125 of 18th July 2013, 37 of 3rd October 2013 and most recently 18 of 16th January 2014.
While the immediate crisis that this Government inherited when it took office has been averted, it remains important for relationships between institutions to be developed and sustained, in order to allow for confidential negotiations to take place, especially on particularly sensitive issues. This is particularly the case in relation to the Irish authorities dealing with the ECB. It is normal practice for states to protect the confidentiality of these discussions, and in fact is usually enshrined in the rules of association of institutions.
Requests to release the letter have been considered a number of times under the Freedom of Information Acts. The decision has been made to refuse these requests in line with the relevant sections of the Act. This provides for exemptions for records relating to, for example, information received in confidence, commercially sensitive information and the financial and economic interests of the state in sections 26 and 31 and particularly 24.2. These factors counterbalance the public interest, protecting the ability of the Government when negotiating or deliberating on matters of national importance. The refusal to release the letter has been upheld on one occasion by the Office of the Information Commissioner.
I do however understand that, on foot of a special request from the European Ombudsman, the ECB is to consider the release of the letter, and should they decide to do so, the need to respect the confidentiality of the letter will no longer apply. I am informed that no decision on this request has yet been made.
34. Deputy Clare Daly asked the Minister for Finance the criteria used to justify the Revenue Commissioners sending recent demand notices threatening the sheriff in relation to alleged non-payment or the local property tax and letters from the compliance intervention unit alleging that they have received information that the person is in receipt of undeclared income; his views on the methods used in this case. [8243/14]
View answerThe Deputy asks for my views on a case, but the details were not supplied. I am informed that my Department made contact with the Deputy s office to establish the specifics of the case so that it could be examined and a detailed reply prepared but that the Deputy s office declined to give any further information. In the circumstances I am not in a position to comment further.
By way of general remarks, it is Revenue's job to initiate debt collection/enforcement activity in circumstances where a liable person does not meet his/her tax filing and/or tax payment obligations as required by law. It is also Revenue s job to enquire into situations where income may be undeclared or untaxed. Such enquiries can resolve matters or can lead to a further action by Revenue depending on the case. However, the House will be well aware from previous replies which I have given that where a taxpayer who has temporary cash flow difficulties engages positively with Revenue, arrangements to pay tax over time can be made. Furthermore, I am advised that Revenue always affords defaulting taxpayers a final opportunity to meet tax obligations before moving to initiate debt collection/enforcement options, including Sheriff, that are available to Revenue where non-payment continues.
Finally, the Deputy will be aware that Revenue recently announced that if property owners regularise their LPT and Household Charge affairs before 31 March, they can still avoid interest, penalties and the type of enforcement action to which the Deputy refers and I would strongly advise the person in question to avail of this opportunity if it applies to him or her.
35. Deputy Michael McNamara asked the Minister for Finance the options identified by his Department in terms of tax relief incentives to encourage householders and businesses to undertake flood prevention works or other measures and the cost-benefit analysis being undertaken; and if he will make a statement on the matter. [8118/14]
View answerWhile there are no existing "direct" tax incentive schemes specifically relating to expenditure by property owners on flood prevention works, there are a number of provisions in the Tax Acts which might, depending on the owner's circumstances and the nature of the work on which the expenditure is incurred, provide a measure of relief in respect of such expenditure. For instance, for rented property the cost to landlords, but not tenants, of maintenance, repairs, insurance and management of the property would be tax deductible. Other options available would include:
The Home Renovation Incentive, introduced in the recent Finance Act, provides for tax relief for homeowners by way of a tax credit at 13.5% of qualifying expenditure incurred on repair, renovation or improvement work carried out on a homeowner's only or main residence. The Incentive runs to the end of 2015. However, where planning permission for qualifying works is required and is in place before 31 December 2015, any work carried out between 1 January 2016 and 31 March 2016 will qualify for the relief.
Expenditure of a revenue nature and interest on borrowings incurred for the purposes of a trade may be deductible in computing taxable trading profits.
In relation to rental property, section 97(2)(e) of the TCA 1997 provides for a deduction in computing taxable rent in respect of interest incurred on borrowed money used to improve the property. (In the case of residential property, the deduction is restricted to 75% of the interest).
Wear and tear allowances (generally 12.5% over 8 years) may be due in respect of capital expenditure incurred on the provision of machinery or plant for the purposes of a trade or in relation to the letting of furnished residential property. I have no plans to introduce any specific measures in respect of flood prevention works.
