Written Answers Nos. 60-68
60. Deputy Eoghan Murphy asked the Minister for Finance if he will provide assurances that he will not allow banks here to impose any further increase in variable rate mortgages while the ECB rate remains as low as it is; and if he will make a statement on the matter. [27629/14]
View answerFirstly, I must confirm to the Deputy that neither the Central Bank nor I have any responsibility for any variation in the variable mortgage interest rate charged by regulated financial institutions. The lending institutions in Ireland - including those in which the State has a significant shareholding - are independent commercial entities. I have no statutory role in relation to regulated financial institutions passing on the European Central Bank interest rate change or to the mortgage interest rates charged. It is a commercial matter for each institution concerned. It is not appropriate for me, as Minister for Finance, to comment on or become involved in the detailed mortgage position of mortgage holders.
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 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. However, as part of the Central Bank's work on mortgage arrears, lenders were asked to consider all avenues to help customers in arrears, including interest rate reductions.
61. Deputy Brendan Griffin asked the Minister for Finance his views on Ireland's international reputation due to the effective rates of corporation tax being paid here by some large firms; his views that the Irish Exchequer could benefit better from corporation tax without moving into diminishing returns; and if he will make a statement on the matter. [27686/14]
View answer62. Deputy Brendan Griffin asked the Minister for Finance his views on the way of increasing Ireland's effective corporation tax take without hunting firms out of the economy; how far from that tipping point is the current tax regime positioned; and if he will make a statement on the matter. [27687/14]
View answerI propose to take Questions Nos. 61 and 62 together.
My Department recently published a Technical Paper on Effective Rates of Corporation Tax in Ireland to provide clarity to the Dáil about the seemingly conflicting figures and methodologies. The Department commissioned an external and independent academic to ensure that this piece of work was as objective as possible. This report is published on the Department's website and can be viewed at the following link:
http://www.finance.gov.ie/sites/default/files/140407%20FINAL%20Technical%20Paper%20on%20Effective%20Rates%20of%20Corporation%20Tax%20in%20Ireland.pdf.
Based on data from the Central Statistics Office (using the "Net Operating Surplus") and the Revenue Commissioners (using the "Taxable Income"), this report highlighted that since 2003 the effective corporate tax rate has averaged 10.9% and 10.7% respectively. While this percentage is lower than the 12.5% headline rate, this can be attributed to the availability of a small number of reliefs such as the R&D tax credit, which was the subject of a comprehensive review last year and which was found to give value for money for the Irish taxpayer.
The extremely low effective rate figures that are sometimes quoted and attributed to Ireland are based on a flawed premise. The figures 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. 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. Unlike some other countries that have a high headline rate of corporation which is then supplemented by a high number of tax reliefs which reduce the overall rate of tax paid, the approach in Ireland is transparent. We have a competitive headline rate of corporation tax which is applied to a broad base.
As to the question of increasing the corporate tax take, I would remind the Deputy of my answer to his question in April this year, where I gave assurances that the need to balance the competitiveness of our corporation tax offering for mobile foreign direct investment while ensuring the maximum benefits to the State is a matter that is considered by my Department and others on an on-going basis. The importance of maintaining the standard 12.5% rate of corporation tax to Ireland's international competitive position in the current climate must be borne in mind. Ireland, like other smaller member states, is geographically and historically a peripheral country in Europe. A competitive corporate tax rate is a tool to address the economic limitations that come with being a peripheral country, as compared to larger core countries. Ireland's corporation tax rate plays an important role in attracting foreign direct investment to Ireland and thereby increasing employment here. As to how successful we are at getting this balance right, I would highlight to the Deputy that the revenue generated by Corporation Tax in Ireland is broadly in line with the EU average. In 2013 we collected just over €4.2bn which is 11.3% of overall Exchequer tax revenue and equivalent to 2.6% of Gross Domestic Product ('GDP').
Any increase in the 12.5% rate could unfortunately result in a behavioural change on the part of taxpayers and potentially have a negative impact on economic growth as a result. In relation to the "tipping point" referred to by the Deputy, I would draw attention to an OECD multi-country study "Tax Effects on Foreign Direct Investment Recent Evidence & Policy Analysis" , which found that a 1% increase in the corporate tax rate reduces inward investment by 3.7% on average. On this basis, it would take only a 2.5% increase in the rate (to 15%) to decrease Ireland's inward investment by nearly 10%. This assumes the average applies across the board but in fact the effect is likely to be more extreme for Ireland. In another report by the OECD, "Tax Policy Reform and Economic Growth", corporate taxes were identified as the taxes which are most harmful to economic growth prospects. These are just examples of the types of international reports my Department has identified as relevant when looking at the relationship between tax, foreign direct investment and job creation.
Further, it is worth saying that the certainty around the rate of Irish corporation tax is one of its biggest strengths, and it would be difficult to justify an increase in the context of Ireland's firmly stated position that we will not change our corporation tax rate. Even a marginal change in the rate of corporation tax would undermine both our long held stance on this issue and the certainty of business, domestic and international, in our resolve to maintain that position. As I said at Budget time, the 12.5% is settled policy and the Government remains 100% committed to this rate.
63. Deputy Dara Calleary asked the Minister for Finance if he will provide, in tabular form, the number of attachment orders placed by the Revenue Commissioners in 2012, 2013 and to date in 2014; if he will provide same by month in each year, on a county basis; the amounts that have been collected by the Revenue Commissioners via these orders in each county on a monthly basis in the years requested; and if he will make a statement on the matter. [27690/14]
View answer64. Deputy Dara Calleary asked the Minister for Finance the number of companies on whom an attachment order on company accounts was placed by the Revenue Commissioners, who subsequently went into examinership, receivership, liquidation or ceased trading during 2012, 2013 and to date in 2014. [27691/14]
View answerI propose to take Questions Nos. 63 and 64 together.
I am advised by Revenue that the debt collection environment continues to be challenging given the ongoing difficult financial environment. In this regard I am assured that Revenue debt management caseworkers are very conscious of the challenges that exist for some taxpayers in meeting their tax obligations in a timely manner. For that reason the caseworkers will always seek to work proactively with taxpayers and viable businesses that engage positively to agree mutually satisfactory arrangements to overcome temporary cashflow difficulties in preference to deploying enforcement options. However, where a business or taxpayer fails to meaningfully engage with Revenue, then I am fully supportive of the deployment of the necessary collection and enforcement measures to secure the taxes and duties due to the Exchequer.
One of the enforcement powers available to Revenue to ensure timely tax collection is Attachment. This power is covered in legislation under Section 1002 of the Taxes Consolidation Act 1997, as amended. Section 1002 allows Revenue to either directly remove funds from any account held by a financial institution in the name of a defaulting taxpayer, or, to instruct any third party that owes a debt to the defaulting taxpayer to pay those funds directly to Revenue. Revenue has confirmed to me that it never deploys its enforcement powers, including Attachment, without giving the taxpayer every opportunity to engage and agree mutually acceptable solutions, including phased payment arrangements. The enforcement process only commences when the caseworker has exhausted all other options to encourage voluntary compliance. Revenue also has strict guidelines in place, including authorisation at a senior level, to ensure Attachment is only used in appropriate circumstances. Revenue is always conscious that the use of Attachment Orders can have adverse consequences for taxpayers and the power is normally only deployed where other enforcement options have failed to secure the outstanding debt. For example, during 2013, Revenue issued Attachment Orders in less than 3,000 cases out of a total of almost 27,000 cases enforced.
In regard to the specific data requested by the Deputy, the number and value of Attachment Orders issued by Revenue and the amounts collected on foot of those Orders in 2012, 2013 and 2014 (to date) is set out at county level in the table in the attached appendix. It is not possible for Revenue to provide breakdown at county level on a monthly basis because certain cases could become identifiable thereby breaking confidentiality. However, Revenue could provide such a breakdown at provincial level if the information would be helpful to the Deputy.
Finally, I am informed that data is not maintained by Revenue in such a manner that would facilitate provision of a response to the Question relating to the number of companies where Attachment Orders were served on their bank accounts and who subsequently went into Examinership, Receivership, Liquidation or who ceased trading.
Appendix : Annual distribution of attachment orders by county
|
- |
- |
2012 Total |
- |
- |
2013 Total |
- |
- |
2014 Total (to end May) |
- |
|
County |
No. of Referrals |
Value of Referrals |
Payments |
No. of Referrals |
Value of Referrals |
Payments |
No. of Referrals |
Value of Referrals |
Payments |
|
Carlow |
63 |
€3,884,057 |
€333,939 |
23 |
€981,014 |
€117,383 |
12 |
€314,227 |
€112,291 |
|
Cavan |
33 |
€3,007,056 |
€306,608 |
51 |
€1,139,460 |
€371,201 |
14 |
€317,089 |
€60,316 |
|
Clare |
105 |
€3,664,923 |
€402,635 |
163 |
€3,554,929 |
€409,618 |
23 |
€636,526 |
€96,503 |
|
Cork City |
202 |
€6,021,236 |
€1,959,474 |
216 |
€12,432,530 |
€2,551,497 |
91 |
€1,778,230 |
€510,713 |
|
Cork County |
417 |
€14,501,545 |
€1,983,777 |
353 |
€10,697,866 |
€1,768,634 |
214 |
€4,449,051 |
€831,217 |
|
Donegal |
65 |
€2,682,705 |
€361,055 |
52 |
€3,325,732 |
€302,567 |
31 |
€608,126 |
€136,839 |
|
Dublin City |
676 |
€32,901,213 |
€5,069,810 |
742 |
€33,885,151 |
€6,553,668 |
360 |
€15,184,010 |
€2,255,699 |
|
Dublin County |
702 |
€33,599,502 |
€6,133,726 |
710 |
€34,275,924 |
€4,591,175 |
290 |
€11,781,210 |
€1,532,150 |
|
Foreign Cases |
88 |
€6,568,050 |
€517,177 |
69 |
€2,445,000 |
€525,457 |
29 |
€2,815,408 |
€55,645 |
|
Galway |
169 |
€8,417,719 |
€1,132,573 |
171 |
€7,924,813 |
€954,989 |
114 |
€2,762,787 |
€581,731 |
|
Kerry |
93 |
€3,243,582 |
€270,466 |
95 |
€1,969,710 |
€14,969,673 |
46 |
€970,026 |
€316,170 |
|
Kildare |
127 |
€6,218,298 |
€732,458 |
104 |
€4,345,137 |
€915,177 |
59 |
€1,484,080 |
€308,829 |
|
Kilkenny |
67 |
€3,555,422 |
€10,249,713 |
37 |
€654,343 |
€249,342 |
7 |
€268,139 |
€38,540 |
|
Laois |
47 |
€1,526,319 |
€140,737 |
24 |
€866,124 |
€217,782 |
8 |
€159,957 |
€7,572 |
|
Leitrim |
17 |
€1,273,970 |
€180,024 |
20 |
€355,503 |
€28,269 |
4 |
€70,737 |
€566 |
|
Limerick |
156 |
€5,816,946 |
€1,407,884 |
210 |
€6,964,722 |
€744,713 |
164 |
€4,733,388 |
€1,026,193 |
|
Longford |
28 |
€1,196,433 |
€55,553 |
28 |
€1,234,315 |
€162,355 |
11 |
€226,384 |
€64,656 |
|
Louth |
115 |
€4,157,295 |
€725,658 |
120 |
€4,649,808 |
€480,642 |
61 |
€1,772,120 |
€154,805 |
|
Mayo |
87 |
€3,985,577 |
€734,701 |
115 |
€5,509,882 |
€576,394 |
98 |
€3,141,149 |
€350,219 |
|
Meath |
196 |
€8,021,616 |
€1,207,464 |
160 |
€5,612,593 |
€1,055,006 |
73 |
€2,871,736 |
€625,447 |
|
Monaghan |
27 |
€1,420,055 |
€672,497 |
51 |
€1,547,063 |
€665,632 |
10 |
€539,797 |
€400,241 |
|
Offaly |
60 |
€2,344,477 |
€268,544 |
83 |
€3,104,458 |
€1,393,654 |
26 |
€973,029 |
€126,550 |
|
Roscommon |
24 |
€2,236,183 |
€149,046 |
36 |
€4,898,735 |
€283,918 |
12 |
€397,581 |
€123,332 |
|
Sligo |
43 |
€1,020,096 |
€62,033 |
58 |
€1,891,113 |
€367,714 |
17 |
€742,249 |
€49,416 |
|
Tipperary |
106 |
€4,071,195 |
€604,918 |
108 |
€4,906,912 |
€732,612 |
27 |
€1,209,039 |
€94,065 |
|
Waterford |
37 |
€2,458,692 |
€358,165 |
68 |
€2,091,044 |
€151,752 |
14 |
€618,425 |
€64,986 |
|
Westmeath |
67 |
€2,737,769 |
€260,822 |
104 |
€3,462,267 |
€651,341 |
51 |
€2,018,000 |
€398,187 |
|
Wexford |
120 |
€3,789,010 |
€1,082,861 |
98 |
€3,831,158 |
€675,297 |
46 |
€1,188,021 |
€425,088 |
|
Wicklow |
102 |
€4,154,649 |
€1,072,929 |
130 |
€4,974,815 |
€906,683 |
60 |
€1,212,028 |
€300,615 |
|
Total |
4,039 |
€178,475,588 |
€38,437,243 |
4,199 |
€173,532,118 |
€43,374,146 |
1,972 |
€65,242,548 |
€11,048,578 |
65. Deputy Michael Healy-Rae asked the Minister for Finance if he will abolish the levy on private pensions during 2015; and if he will make a statement on the matter. [27692/14]
View answerI announced in my Budget 2014 speech that the 0.6% Pension Fund Levy introduced to fund the Jobs Initiative in 2011 will be abolished from 31 December 2014. I have, however, introduced an additional levy on pension funds at 0.15% for 2014 and 2015. I am doing this to, among other things, continue to help fund the Jobs Initiative. Finance (No. 2) Act 2013 provides for the application of the levy up to 2015 and not beyond. I have no plans to make any further changes in this regard.
66. Deputy Jerry Buttimer asked the Minister for Finance the reasons for the delay in processing a Med1 form in respect of a person (details supplied) in County Cork; when a tax rebate can be expected; and if he will make a statement on the matter. [27708/14]
View answerI am advised by the Revenue Commissioners that Med 1 forms relating to years 2010 to 2013 were received in the name of the taxpayer's spouse, who is a PAYE employee, on 15 April 2014. On checking however, it became apparent that the taxpayer is recorded as the assessable spouse for the married couple, and that he had not submitted self-employed income tax returns for the years since 2009. The taxpayer's present status is unclear because he appears to be proprietary director of a company, and is registered as self-employed. In those circumstances a refund could not be made. The Med 1 forms were returned to the taxpayer's spouse on 13 May and she was advised that the forms should be resubmitted with the appropriate income tax returns. The taxpayer should contact Mr Eugene Larkin at Revenue House, Blackpool, Cork, telephone 021-6027262 to clarify the present position.
68. Deputy Michael McGrath asked the Minister for Finance the number of income tax cases between €17,000 and €18,000 of earnings, €18,000 and €19,000, €19,000 and €20,000; and if he will make a statement on the matter. [27778/14]
View answerI am advised by the Revenue Commissioners that the estimated numbers of income earners earning between €17,000 and €18,000, between €18,000 and €19,000 and between €19,000 and €20,000, by reference to the income tax year 2014, are approximately 41,000, 43,100 and 42,000 respectively (estimated numbers are rounded to the nearest hundred). These figures are estimates from the Revenue tax forecasting model using latest actual data for the year 2011, adjusted as necessary for income, self-employment and employment trends in the interim. They are provisional and may be revised. Married persons or civil partners who have elected or have been deemed to have elected for joint assessment are counted as one tax unit.
