Written Answers Nos. 204-228
204. Deputy Kevin Humphreys asked the Minister for Finance his plans to regulate pay-day lenders here; if companies (details supplied) were to begin to offer such loans here, the regulations by which they would be covered; his plans to introduce regulations and law similar to those in some Australian states where there is a cap of a 48% APR maximum loan rate, including fees and brokerage; and if he will make a statement on the matter. [29638/14]
View answerThe Central Bank has advised me that pay-day lenders typically offer very short term loans to tide borrowers over until their next pay-day. The representative APRs associated with these loans can be as high as 4,000-5,000 per cent. Although a number of firms have approached the Central Bank in relation to offering pay-day loans in the Irish market, no such business model has been licensed by the Central Bank.
On the issue more generally, the Central Bank has a robust authorisation process in place for assessing applications for moneylending licences. The Central Bank assesses every application for authorisation in accordance with the relevant legislation. Payday lenders are not permitted to operate in Ireland without appropriate authorisation from the Central Bank. The Central Bank will continue to monitor this sector closely and to take action where necessary to protect borrowers' interests.
The legislation under which moneylenders are supervised (the Consumer Credit Act 1995) does not provide for an interest rate cap. The introduction of an interest rate ceiling may not achieve the objective of lowering the total cost of credit for example, if the licensed moneylender chose instead to extend the duration of the loan. Any legislative proposals in this regard would therefore have to be careful to achieve an overall reduction in the cost of credit. There has been some public discussion about introducing an industry-wide cap on the rates moneylenders can charge. Lower interest rate ceilings could be ineffective and counterproductive in this regard and may result in excluding low income households that have repayment capacity, even at the high rates charged by licensed moneylenders. The Central Bank would have some concerns therefore about the imposition of an industry-wide interest rate cap without there having been a full assessment of its impact on consumers. The Central Bank has no statutory power to impose a market-wide cap on rates and examine, on a case-by-case basis, whether the rates are excessive.
205. Deputy Kevin Humphreys asked the Minister for Finance if the EU Commission will be carrying out an alert mechanism report under macroeconomic imbalances procedure now that Ireland has exited the bailout programme; the date on which this will take place; the expected publication date; and if he will make a statement on the matter. [29640/14]
View answerThe European Commission published the Alert Mechanism Report (AMR) for 2014 on 13 November 2013. The AMR is the starting point of the yearly cycle of the Macroeconomic Imbalance Procedure (MIP) and identifies the Member States for which further analysis in the form of an in-depth review (IDR) is needed. Given that Ireland was still in a macroeconomic adjustment programme, last year's AMR did not recommend whether an IDR should take place for Ireland but that the situation of Ireland in the context of the MIP would be assessed after the conclusion of the programme.
Subsequent to the conclusion of the programme the ECOFIN Council in February considered that Ireland should be fully integrated into the European Semester framework in 2014, including the MIP, and invited the Commission to consider preparing an IDR for Ireland. It also recommended that this same procedure should be followed for other programme countries once they had successfully completed their financial assistance programmes. The in-depth review (IDR) for Ireland was published on 5 March 2014.
The 2015 AMR is likely to be published in November of this year. The Commission will recommend in the context of the 2015 AMR whether an in-depth review for Ireland and other Member States will take place in early 2015.
Links to most of the documents referenced here can be found at: http://ec.europa.eu/economy_finance/economic_governance/macroeconomic_imbalance_procedure/index_en.htm.
206. Deputy Kevin Humphreys asked the Minister for Finance if dark pool trading, private forums for trading securities that is not openly available to the public, regulated here; and if so by whom; the number of operations that are based here; and if he will make a statement on the matter. [29641/14]
View answerThe Markets in Financial Instruments Directive ("MiFID") - transposed into Irish law via the European Communities (Markets in Financial Instruments) Regulations 2007 - establishes a regulatory framework throughout the European Union for the provision of investment services in financial instruments, for the operation of regulated markets by market operators and also establishes the powers and duties of national competent authorities in relation to these activities.
Dark pool trading is a commonly used term, but not in itself provided for in statute. What is commonly referred to as dark pool trading usually has two forms:
(1) trading through private electronic trading platforms operated by broker-dealers or
(2) trading through a multilateral trading facility (MTF) that execute trades under the use of a waiver from the normal pre-trade transparency rules, where approval has been received from the national competent authority for the use of that waiver.
(1) Private electronic trading platforms operated by broker-dealers are not categorised under MiFID . These platforms are currently not subject to authorisation requirements. However, the revised MiFID ("MiFID II") - adopted in 2014 and scheduled to be transposed throughout the European Union by 2016 - will introduce a range of measures to deal with concerns in relation to so-called dark pools and require more trading activity to take place on regulated trading venues or systems.
(2) Under the current MiFID rules, MTFs are subject to authorisation requirements throughout the EU, including Ireland. The authorisations are granted by the Central Bank of Ireland. An authorisation has been granted by the Central Bank of Ireland under the MiFID Regulations to Investment Technology Group Limited to operate a MTF called POSIT and the Central Bank has also approved the use of a waiver from pre-trade transparency which POSIT currently uses .
The use of pre-trade transparency waivers will be restricted under MiFID II by virtue of the tightening of the conditions around when such waivers can be used, and also via the volume cap mechanism. The European Securities Markets Authority (ESMA) will undergo a process of reviewing all waivers from pre-trade transparency across Europe to ensure compliance with MiFID II once it comes into force on 3 January 2017.
207. Deputy Joe Higgins asked the Minister for Finance his views regarding the announcement by Ulster Bank of the closure of a further ten branches here; his plans to meet senior executives in Ulster Bank or Royal Bank of Scotland and if any such meetings are planned; his views on a possible merger with other institutions to form a third force in banking; his views on the call by the Irish Bank Officials Association that there should be no compulsory redundancies in Ulster Bank; and if he will make a statement on the matter. [29741/14]
View answerI fully understand and appreciate the concerns of Ulster Bank customers and their employees at this announcement. The statement that there will be no additional job losses as a result of the announcement is to be welcomed. I understand that staff will be redeployed within the branch network.
As I said in a reply to a previous question on this matter on 1 July, my officials have been in contact with both RBS and Ulster Bank officials; this contact will continue as the bank finalises its plans for the future.
The bank will continue to have a substantial branch presence across the country and Royal Bank of Scotland has publicly committed to building on Ulster Bank's current position to make it a compelling challenger bank to the main domestic banks and to focus firmly on the customer. That is to be welcomed. The continued presence of a viable and active Ulster Bank in the Irish market will be important in fostering competition for banking services. It is vital that businesses and consumers have a range of banking options available when using financial services and accessing credit - all of which will become increasingly important as the economy recovers.
As part of their day-to-day role, my officials will consider all credible proposals and develop strategic options relating to the banking system.
208. Deputy Mattie McGrath asked the Minister for Finance the loan amount the Strategic Banking Corporation of Ireland, SBCI, has advanced to Irish small and medium-sized enterprises; the amount of funding the SBCI has received from the German Development Bank, KfW; and if he will make a statement on the matter. [29761/14]
View answerAs the Deputy will be aware, the Taoiseach and Chancellor Merkel last year sought, when we were exiting the EU/IMF Programme, to specifically to find ways to reinforce Ireland's economic recovery by improving funding mechanisms for the real economy, including access to finance for Irish SMEs. The German Government asked KfW, the German development bank, to work with the German and Irish authorities swiftly, in order to deliver on this initiative at the earliest possible date.
A working group comprising of officials at my Department and staff of the National Treasury Management Agency have worked quickly to investigate ways to ensure that the benefit of this cooperation to Irish SMEs can be maximised. In order to have the SBCI operational as soon as possible, the group are working in a number of areas to close agreements with Kreditanstalt für Wiederaufbau (KfW) and the European Investment Bank. Both KfW and the European Investment Bank have indicated that they are willing to provide lower cost funding to SBCI for up to a 10-year term. Locking in funds at a lower cost for a 10-year period is both a major benefit and a risk mitigant for SMEs. To have locked in lower cost funding would be a major benefit in such circumstances and this fact should provide considerable confidence to the SME sector as it increases the certainty of funding to that sector even in adverse financial market conditions.
A key benefit of the SBCI will be its ability to facilitate loans with initial capital repayment breaks or the offering of loans with longer durations than are typically available currently. In such cases, SMEs would have greater capacity to make investments on the basis of improved cash flow matching, which makes growth more likely. Additionally, the expanded pool of lending products could serve the needs of a wider cohort of SME customers than is presently served by the lending institutions.
The establishment of the SBCI will provide in total over €500m of additional credit for SME s and will be a great addition to the SME credit landscape in Ireland. This will promote greater competition in the SME lending sector, will drive economic growth and job creation in this key sector of our economy. The Government will be prioritising the passage of the required legislation through the Houses of the Oireachtas and I expect the SBCI to be facilitating lending before the end of the year
209. Deputy Róisín Shortall asked the Minister for Finance if VAT remains refundable on the installation of pendent alarm systems; and if he will consider extending this to include the cost of the annual monitoring fees incurred by those using the alarms. [29785/14]
View answerI am advised by the Revenue Commissioners that the VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. In the circumstances, the supply of personal alarms is liable to VAT at the standard rate, currently 23%. The supply of parts and accessories and monitoring fees are also liable to VAT at the standard rate.
I am also advised that, under the Value-Added Tax (Refund of Tax) (No. 15) Order 1981, VAT paid on qualifying goods may be refunded where the goods are purchased for the exclusive use of disabled persons suffering a specified degree of disablement. The Order applies to goods which are aids or appliances, including parts and accessories, which might reasonably be treated as constructed or adapted having regard to the particular disablement of the person. A personal alarm for a disabled person may qualify for relief under the Order if it may be considered an aid or appliance constructed or adapted for use by a disabled person having regard to the particular disablement of that person. The Order applies only to goods so services, such as a monitoring service, are not included in the Order. A Claim Form VAT 61A is available on the Revenue website (www.revenue.ie).
210. Deputy Stephen S. Donnelly asked the Minister for Finance the amount raised by the close company surcharge, and the professional close company surcharge for the years 2007 to 2013 and the estimate for 2014; and if he will make a statement on the matter. [29786/14]
View answer211. Deputy Stephen S. Donnelly asked the Minister for Finance if he will estimate the cost to the Exchequer of raising the de minimis level of the close company surcharge from €2000 to €5,000; and if he will make a statement on the matter. [29787/14]
View answer212. Deputy Stephen S. Donnelly asked the Minister for Finance if he will estimate the cost to the Exchequer of raising the de minimis level of the close company surcharge from €2000 to €5,000; and if he will make a statement on the matter. [29788/14]
View answer213. Deputy Stephen S. Donnelly asked the Minister for Finance if he will estimate the cost to the Exchequer of abolishing the professional close company surcharge; and if he will make a statement on the matter. [29789/14]
View answerI propose to take Questions Nos. 210 to 213, inclusive, together.
By way of background, the tax code in Ireland has a number of long-standing general anti-avoidance rules relating to what are called 'close companies'. A close company is, broadly speaking, a company under the control of 5 or fewer people.
Two of these rules impose an additional tax charge (or surcharge) on certain close companies:
Firstly, a surcharge of 20% applies to any investment and rental income that is not distributed within 18 months of the accounting period in which that income was earned.
Secondly, a surcharge of 15% on 50% of any business income of a professional service close company that is not distributed within 18 months of the relevant accounting period.
The purpose of these surcharges is to prevent the avoidance of personal income taxation through the accumulation within a company of income that would otherwise be subject to income tax at a person's marginal tax rate.
In relation to the Deputy's specific questions about the cost of amending these surcharges, I am informed by the Revenue Commissioners that based on information included on a self-assessed basis on the corporation tax returns filed for the tax years 2007 to 2012, the estimated amounts raised by the surcharges referred to in the questions are as shown in the following table. The amounts shown in the table may not include additional yield of approximately €2.5m tax that was secured following a specific programme of checks carried out nationally on close company surcharge compliance since the returns were filed.
|
Year |
Close Company Surcharge (€m) |
Professional Income Of Service Companies Surcharge (€m) |
|
2007 |
19.2 |
6.3 |
|
2008 |
23.7 |
5.7 |
|
2009 |
20.7 |
4.7 |
|
2010 |
19.0 |
3.8 |
|
2011 |
18.4 |
3.6 |
|
2012 |
17.9 |
5.5 |
Data for the tax year 2013 is not yet available as the bulk of tax returns for 2013 are not due until later this year.
It is tentatively estimated on the basis of tax returns for the year 2012 that the corporation tax loss associated with increasing the de minimis amount associated with the close company surcharge to €5,000 and €10,000 could be of the order of €2.4 million and €5 million respectively. This cost does not include any cost associated with increasing the de minimus amount for the surcharge associated with professional income of service companies nor does it include any potential income tax loss associated with lower distributions as a result of the proposal.
Regarding Question No. 29789, it is tentatively estimated on the basis of tax returns for the year 2012 that the corporation tax loss associated with abolishing the surcharge associated with professional income of service companies could be of the order of €5.5 million in a year. This cost does not include any potential income tax cost associated with the diversion of income into close companies that could arise as a result of the proposed abolition of the surcharge.
I would emphasise that the primary purpose of the close company surcharges is to counter attempts to avail of lower company taxation rates on personal income.
In order to assist small companies with liquidity constraints and improve their cash flow position, these rules were relaxed modestly in Finance Act 2013 following the Budget announcement of a renewed focus on the SME sector. The measures enabled companies to retain a higher amount of income for reinvestment without being liable to a surcharge.
By way of example, at the current limits a company may keep up to €100,000 on deposit at an interest rate of 2%, and retain the resulting interest income of €2,000 for use in their business without suffering the surcharge.
I am satisfied that the current thresholds are now set at an appropriate level and I have no plans to amend them further.
214. Deputy Pearse Doherty asked the Minister for Finance his plans to provide for a new fuel grant scheme for disabled drivers which will have the same levels of support as the current excise relief scheme. [29793/14]
View answerAs the Deputy is aware, following a ruling by the European Court of Justice in April 2013 and subsequent negotiations with the European Commission, the excise relief on fuel element of the Disabled Drivers and Disabled Passengers scheme will be discontinued from 31 December 2014.
As I have previously stated arrangements are being made to provide for a new fuel grant scheme for disabled drivers which will have the same levels of support as the current excise relief scheme and there will be a seamless transition between the two schemes.
Officials from my Department have been engaging with other Departments and the Revenue Commissioners in order to examine all the legislative, financing and payment implications of a new fuel grant scheme. When all the details of the new scheme have been worked out and finalised, the members of the Disabled Drivers and Disabled Passengers Scheme will be informed.
215. Deputy Gerry Adams asked the Minister for Finance the reason a person (details supplied) in County Louth who regularly imports goods through Dublin Port, was selected for a random stripping examination by Revenue and Customs on 14 June 2014, was charged €650 plus VAT for the examination of their container by a shipping group on the instruction and under the supervision of the Revenue and Customs; the procedures in place by the Revenue and Customs for conducting stripping examinations; the reasons Revenue and Customs and their agents have started to charge to conduct these examinations; the method used to determine or calculate fees and/or charges prior to stripping examinations; and if he will make a statement on the matter. [29827/14]
View answerI am informed by the Revenue Commissioners that the control and examination function such as that which was performed in the case in question is essential in safeguarding national and EU revenues, and in ensuring compliance with importation prohibitions and restrictions.
The examination was carried out under the provisions of the Customs Code [Council Regulation (EEC) No. 2913/92], that specifies that responsibility for the production of goods required to be examined and the associated costs rests with the declarant. Article 69.1 of the Customs Code states:
Transport of the goods to the places where they are to be examined and samples are to be taken, and all the handling necessitated by such examination or taking of samples, shall be carried out by or under the responsibility of the declarant. The costs incurred shall be borne by the declarant.
The above procedure was implemented by Revenue with effect from 1 March 2014 following an extensive consultative process with key stakeholders in Dublin Port. The implementation of the procedures was also discussed with the Customs Consultative Committee, a group representing importers, exporters , the logistics sectors and Revenue.
There are three freight compounds in Dublin Port. The compound operators are obliged under the terms of their Revenue approvals to provide the necessary examination facilities. The costs associated with the production of the goods are a matter between the freight compound operators and the importer and his agents. Revenue has no role in the setting of the charges involved.
The Revenue Commissioners have also advised that most imported goods are cleared through Customs without the need for a physical examination. The examination in the case in question was not a random selection, but was based on Revenue's risk criteria.
216. Deputy Finian McGrath asked the Minister for Finance the position regarding local property tax in respect of a person (details supplied) in Dublin 9; and if he will make a statement on the matter. [29830/14]
View answerI am advised by Revenue that it has made eight separate payment options available to assist property owners meet their Local Property Tax (LPT) and Household Charge (HHC) obligations in a manner that best suits individual circumstances.
Included among the options are a number of phased payment methods that allow property owners spread their liabilities over the course of the year. For example, property owners can pay their LPT/HHC by way of voluntary deduction at source from salary or pension. This option, which is arranged by Revenue, is evenly divided over the amount of pay dates available in the person's annual payment cycle and carries no additional costs or transaction charges.
Alternatively, property owners can avail of monthly direct debits through their financial institutions or certain credit union accounts, or they can make regular weekly or monthly payments to one of the four approved payment service providers, which are An Post, Payzone, PayPoint and Omnivend. Details in regard to the four payment service providers, including information on their transaction fees are available on the Revenue website at www.revenue.ie . The transaction fees applied by the financial institutions and credit unions vary depending on the type of account held by the property owner.
In regard to the specific case to which the Deputy refers, Revenue has confirmed to me that a member of the LPT team has already made telephone contact with the person in question to discuss the issues. The LPT team member outlined the different payment options to the person and also explained the qualifying criteria in respect of deferral and partial deferral of outstanding LPT/HHC liabilities. The person clearly indicated that he was not interested in deferring any part of his liabilities and opted to pay on a phased basis through one of the service providers. The LPT team member activated the person's preferred payment option for him and the issue is now resolved.
217. Deputy Catherine Murphy asked the Minister for Finance the information sources his Department has utilised in any study prepared to assess the utility and implications of adopting a wealth tax; if he will share the findings of this research; and if he will make a statement on the matter. [29844/14]
View answerTo estimate the potential revenue from such a tax one would need to identify the wealth held by individuals, which is not possible from the data available at present. I am informed by the Revenue Commissioners that they currently have no statistical basis for compiling estimates in relation to a potential wealth tax. Although an individual's assets and liabilities are declared in a number of specific circumstances for example, after a death or the value of property owned this information is not a complete measure of financial assets in the State or recorded in a manner that would allow analysis of the implications of an overarching wealth based tax.
I am advised that the Central Statistics Office (CSO) institutional sector accounts do not give an indication of the number of households or persons classified by the categories of wealth they hold. These statistics are based on aggregate information collected from financial institutions and do not contain the demographic details which would enable such a breakdown of the statistics.
However, I understand that, following discussions between the Department of Public Enterprise and Reform, the CSO and the Central Bank, the CSO has commenced a "Household Finance and Consumption Survey", which will collect information on household wealth. The results of this survey are not yet available.
The data to be collected by the CSO as part of its Household Finance and Consumption Survey is not being collected for the purposes of calculating the potential yield from a wealth tax but to collect general information on the financial situation and behaviour of households.
218. Deputy Martin Heydon asked the Minister for Finance the action he will take to ensure that predominantly State-owned banks pass on recent interest rate reductions to their customers who are on variable rate mortgages; and if he will make a statement on the matter. [29861/14]
View answerAs the Deputy will be aware the Relationship Frameworks with the banks provide that the State will not intervene in the day-to-day operations of the institutions or their management decisions. These documents are published on the Department of Finance website. I must ensure that the banks are run on a commercial, cost effective and independent basis to ensure the value of the banks as assets to the State.
Neither the Central Bank nor the Department of Finance has a statutory function in relation to interest rate decisions made by individual lending institutions at any particular time. It should also be noted that the Relationship Frameworks specifically reference decisions regarding pricing as being commercial decisions for the banks.
219. Deputy Andrew Doyle asked the Minister for Finance if he will outline the Irish arrangements and permanent delegation to the European Banking Authority based in London; and if he will make a statement on the matter. [29889/14]
View answerThe European Banking Authority (EBA) forms part of the European System of Financial Supervision and aims to ensure effective and consistent prudential regulation and supervision across the European banking sector. It took over all existing tasks and responsibilities of the Committee of European Banking Supervisors. Its overall objectives are to maintain financial stability in the EU and to safeguard the integrity, efficiency and orderly functioning of the banking sector.
The EBA's main task is to create a single EU rule book in banking. This provides a single set of harmonised prudential rules for financial institutions throughout the EU. It does this by developing draft technical standards, which can then be adopted by the European Commission as EU law. It issues guidance and recommendations with which national supervisors and firms must make every effort to comply. This improves the functioning of the internal market by ensuring appropriate, efficient and harmonised European regulation and supervision.
The Central Bank is a member of the EBA Board of Supervisors, which is attended by the Deputy Governor Financial Regulation, Cyril Roux. The Central Bank is also represented on the Standing Committees, sub groups of these Committees and various other working groups.
The Central Bank of Ireland currently has three staff members seconded to the EBA on a temporary basis.
220. Deputy Andrew Doyle asked the Minister for Finance if the practice of crowdfunding and peer-to-peer lending can be incorporated in legislation in view of the recently issued consumer notice on crowdfunding, including peer-to-peer lending by the Central Bank of Ireland; and if he will make a statement on the matter. [29890/14]
View answerThe Consumer Notice on Crowdfunding, including Peer-to-Peer Lending information notice which was issued by the Central Bank on 17 June 2014 was to alert consumers to the fact that crowdfunding, including peer-to-peer lending, is currently not a regulated activity in Ireland.
Crowdfunding, including peer-to-peer lending in respect of enterprise and other activities, is becoming an ever more popular alternative mechanism for businesses and promoters across the globe to access finance in the context of a more challenging financial environment. In its various forms, crowdfunding including peer-to-peer lending allows individuals, businesses and promoters to solicit capital from funders, using social networks and crowdfunding platforms to finance projects. It appears to be affording real opportunities in the area of alternative non-bank finance for SMEs, particularly for those enterprises that have either been refused bank credit or who are less willing to formally apply for funding from traditional lenders. Interestingly, however there is also innovative examples of SMEs using this type of funding to actually complement traditional bank debt financing. Use of crowdfunding and peer-to-peer funding mechanisms have demonstrated substantial growth in the US and the UK in particular, albeit targeted at minority and/or niche segments of the SME market.
However, crowdfunding is in its infancy and financial returns on capital will dictate its overall success. Comparable data is not yet readily available domestically, at EU level or internationally with which to analyse its impact to date, although moves are afoot at EU level to consider methods to address this data deficiency. Lending directly to small growth companies via peer-to-peer exchanges has expanded recently. Irish exchanges have not yet matched international levels but there are a number of platforms in the Irish market. As this new source of funding grows the issues of consumer protection and regulation are also coming more to the fore in many countries. The Government, through the State Bodies Group, chaired by my Department, are considering how best to support the development of crowdfunding and peer-to-peer lending in a manner that enhances SME access to finance and promotes increased entrepreneurship and business development. This will include looking at examples of good policy practice in other countries. We will also be closely engaging in the EU level discussions on this issue, including in particular the subject of any future regulation of the sector. While we continue to keep these matters under review we do consider that crowdfunding and peer-to-peer lending has a role to play as part of the range of bank and non-bank sources of financing for SMEs in Ireland.
221. Deputy Andrew Doyle asked the Minister for Finance if he will outline Ireland's operational relationship with the World Bank; and if he will make a statement on the matter. [29896/14]
View answerDetailed information on Ireland's relationship with the World Bank is contained in the Annual Report for 2013 entitled "Ireland's Participation in the International Monetary Fund and the World Bank" which is prepared by my Department in accordance with Section 10 of the Bretton Woods Agreements (Amendment) Act 1999 and which I presented to Dáil Éireann earlier this year. The report is available at www.finance.gov.ie/publications
Ireland has been a member of the World Bank since 1957 and is part of a constituency with Canada and a number of Caribbean countries. As the Minister for Finance is the Governor for Ireland at the World Bank, my Department has the lead role in relation to Ireland's engagement with the Bank, in particular in relation to governance and shareholder interests.
In 2013, the Governors of the World Bank approved the adoption of two strategic goals for the World Bank Group: (i) to end extreme poverty to reduce the percentage of people living on less than $1.25 a day to 3 per cent by 2030 and (ii) to promote shared prosperity to foster income growth of the bottom 40 per cent of the population. Ireland strongly supports these goals.
Ireland is represented at the Executive Board by Mr Alister Smith, an Executive Director appointed by Canada. There are two Irish representatives on secondment from my Department to the World Bank who work full-time in the constituency office, Mr Eamonn Kearns and Mr Niall Cassidy. They make an important contribution to the work of the Bank and in communicating Ireland's position on a wide spectrum of policy issues. The advisors work closely with the Department, with Irish Aid and Enterprise Ireland as well as other Government Departments and agencies, as appropriate, to promote Irish interests in the wider context of their contribution to the work of the World Bank.
Ireland's policy document, "One World, One Future" sets out a whole-of-Government approach to international development. Irish Aid have a close working relationship with the World Bank and support Ireland's constituency through policy advice and guidance on development related issues, while also liaising with my Department. The Department of Finance also works alongside Enterprise Ireland in relation to the promotion of enterprise interests at the World Bank.
Ireland has consistently supported the work of the International Development Association (IDA) and contributed €29 million in 2013 to IDA, the concessional lending arm of the World Bank which focuses on the world's poorest countries, and is recognised internationally for its contribution to the fight against global poverty and hunger and its contribution to making international aid more effective. In addition, Irish Aid supports the World Bank's development activities by providing funds to a variety of trust funds. Irish Aid funding to the World Bank in 2013 was almost €40 million, much of which was for specific programmes such as the Global Fund for AIDS, TB and Malaria, the Global Partnership for Education and activities in Ethiopia such as the Productive Safety Nets and Basic Services programmes.
Ireland has recently broadened its engagement with the World Bank on the Doing Business Report, the Bank's flagship publication which assesses regulations affecting domestic firms and the ease of doing business in 189 economies. My Department has a central role in coordinating Ireland's response to the Doing Business Report in the context in particular of the priority accorded to improving Ireland's business and regulatory environment and international competitiveness.
Further information regarding the activities of the World Bank is contained on its website www.worldbank.org.
222. Deputy Brendan Griffin asked the Minister for Finance his views on calls to make private health insurance payments fully income tax deductible in budget 2015; and if he will make a statement on the matter. [29900/14]
View answerSince 16 October 2013, tax relief for medical insurance premiums has been restricted to the first €1,000 per adult and the first €500 per child insured. Any portion of premium paid in excess of these ceilings no longer qualifies for tax relief. Prior to this, income tax relief for medical insurance premiums was provided at source, at the standard rate of income tax, on the entire premium amount regardless of cost. Therefore, the State was paying 20% of the cost of all private medical insurance premiums.
The cost of Income Tax relief in respect of medical insurance has increased significantly in recent years, estimated at €404 million in 2011, €448 million in 2012 and €500 million in 2013. Despite the increasing cost of the relief, the numbers insured are estimated to have reduced by approximately 170,000 over the same period, while at the same time the level of medical cover has decreased on some policies. Against this background the increase in costs was unsustainable. If the relief had remained unchanged and the trend was to continue, the cost would increase to approximately €1 billion per annum by 2020.
Notwithstanding the recent reform, the tax system is still supporting those who can afford private medical insurance to the tune of around €400 million per annum. Effectively that means that some taxpayers who could never afford private health insurance, or who have had to give up their policies due to personal circumstances, are continuing to provide financial support via the tax system to those individuals who can afford such insurance.
It should be noted that the Commission on Taxation in its 2009 report recommended the retention of medical insurance relief but that it should be limited. The introduction of an upper ceiling on the amount of medical insurance premiums that will qualify for tax relief achieves this recommendation.
It is unfair and unsustainable to allow unrestricted tax relief on private medical insurance premiums, particularly at a time when the general population has contributed so much to repairing the public finances. However, the new ceilings ensure continuing support via the tax system for those who purchase medical insurance policies, while reducing Exchequer exposure to more expensive policies.
223. Deputy Charlie McConalogue asked the Minister for Finance if he will reduce the universal social charge for retired persons in budget 2015; and if he will make a statement on the matter. [29902/14]
View answerThe Universal Social Charge (USC) was introduced in Budget 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. It is a more sustainable charge than those it replaced. It is applied at a low rate on a wide base, and the revenues collected play a vital part in meeting the many expenditure demands placed on the Exchequer, including state pensions.
An individual is not liable to pay USC where his or her total income does not exceed €10,036. All State contributory and non-contributory pensions are exempt from the charge, and indeed are not included when calculating income levels for assessing whether individuals breach the threshold. Furthermore, individuals aged 70 and over, and medical card holders, benefit from a lower rate of USC (provided their total income does not exceed €60,000).
As a result of a review of the USC conducted by my Department in 2011, the Government decided in Budget 2012 to increase the entry point to the Universal Social Charge from €4,004 to €10,036 per annum. It is estimated that this removed almost 330,000 individuals from the charge.
As part of the normal budgetary preparations, my officials will examine potential options for changes to the tax system for my consideration as part of the overall Budget package. However, it should be borne in mind that under the terms of the Stability and Growth Pact, until Ireland has reached its objective of a balanced budget in structural terms, we may not introduce discretionary revenue reductions unless they are matched by other revenue increases or expenditure reductions.
224. Deputy Brendan Griffin asked the Minister for Finance the tax concessions available in respect of a person (details supplied) in County Kerry; and if he will make a statement on the matter. [29903/14]
View answerI am informed by the Revenue Commissioners that there are no tax concessions available in respect of a person disposing of shares in the circumstances outlined by you. As I stated in a reply to a previous PQ from the Deputy in relation to this issue, farmers who sell shares in order to make capital investments in their farms are no different to any other taxpayers who may decide to sell shares or other assets.
It is important to note that it is only an actual chargeable gain that is subject to capital gains tax, not the entire consideration received from a sale of shares. In addition, any gains made in a year from disposals of chargeable assets up to a total of €1,270 will not incur any capital gains tax - €1,270 is the annual capital gains tax exemption for individuals.
225. Deputy Charlie McConalogue asked the Minister for Finance if his attention has been drawn to an issue (details supplied) which makes Irish companies selling services in the UK uncompetitive against UK-based competitors; his plans to address the situation; and if he will make a statement on the matter. [29904/14]
View answerI am advised by the Revenue Commissioners that the EU VAT Directive, with which Irish and UK VAT legislation must comply, distinguishes between a supply of goods and a supply of services. Where an Irish VAT registered trader makes a supply of goods to a UK business then the Irish trader zero-rates the supply and the UK business self-accounts for VAT on the goods. The UK trader will have the right to deduct this VAT if the goods are used for his taxable supplies.
The position with services is that where an Irish VAT registered trader makes a supply of services to a UK business then the place of supply for VAT purposes is the UK and the Irish trader zero-rates the supply, and the UK business self-accounts for VAT. Again, the UK trader will have the right to deduct this VAT if the services are used for his taxable supplies.
In this way, suppliers established in Ireland compete on a level playing field in the UK market with UK established suppliers.
226. Deputy Maureen O'Sullivan asked the Minister for Finance his plans to introduce a scheme to make provisions for first-time buyers to buy homes and who are unable to buy homes due to the large deposit needed; if this scheme will be in effect this year; and if he will make a statement on the matter. [29905/14]
View answerMy Department is committed, under the construction strategy, to examine the concept of a mortgage insurance scheme and how it might benefit new housing completions in the Irish market. The objective of any scheme would be to ensure adequate availability of mortgage finance on affordable terms for new completions, particularly for 'First Time Buyers', as the economy recovers. In doing so I would aim to provide the certainty needed to support greater levels of investment in new housing, with the associated benefits for the construction sector and ultimately for the consumer.
My Department is undertaking an economic impact analysis which will assess the impact such a scheme would have on the Irish housing market, taking into consideration time limits, targeting 'First Time Buyers' or owner occupiers and focussing on new housing. Initially, I envisage that any scheme would be limited in nature and targeted to support 'First Time Buyers'. However, I will not pre-empt the outcome of the economic impact assessment from my Department which is currently underway.
The purpose of this initiative will be to promote an increase in housing supply, only where needed. Any scheme I introduce will be designed to more effectively match demand with supply while also aiming to assist 'First Time Buyers'.
The analysis will draw lessons from mortgage insurance initiatives undertaken in other countries and will include questions as to the appropriateness of a price cap as well as regional or geographic restrictions. Once this analysis has been completed and presented to me I will consider next steps.
227. Deputy Finian McGrath asked the Minister for Education and Skills if he will support a community training centre (details supplied) in Dublin 11; and if he will make a statement on the matter. [29306/14]
View answerThis is an operational matter for City of Dublin Education and Training Board (ETB) and I have asked the ETB to contact the Deputy directly to clarify the position.
228. Deputy Billy Timmins asked the Minister for Education and Skills the position regarding the allocation of funding for a centre (details supplied) in County Wicklow; and if he will make a statement on the matter. [29709/14]
View answerThe Board of Management (BOM) of the school in question advised my Department that the school will continue in its current locations until the end of June, 2015. My Department has confirmed its willingness to provide grant aid to the BOM to facilitate it renting the premises referred to for the coming school year.My officials and the NCSE are in regular contact with this school and the Association and will continue to work with them on future provision in the county.
