Written Answers Nos. 292 - 308
292. Deputy James Bannon asked the Minister for Finance the steps he is taking to eliminate fuel laundering which is having a serious impact on economy here; and if he will make a statement on the matter. [41338/14]
View answerI would like to assure the Deputy that I am very aware of the negative economic impact of fuel laundering. The Revenue Commissioners, who are responsible for tackling mineral oil tax fraud, advise me that, while there is no reliable estimate of the scale of illegal activity in the fuel sector, the laundering of markers from rebated fuels represents a significant threat to Exchequer revenues, to the legitimate trade and to unsuspecting motorists. Revenue has made action against this illegal activity one of its priorities and is implementing a comprehensive strategy to tackle the problem through enhanced supply chain controls, the acquisition of a more effective fuel marker and continued robust enforcement action.
Revenue's strategy includes the following elements:
- The licensing regime for auto fuel traders was strengthened with effect from September 2011 to limit the ability of the fuel criminals to get laundered fuel onto the market;
- A new licensing regime was introduced for marked fuel traders in October 2012, which is designed to limit the ability of criminals to source marked fuel for laundering;
- New requirements in relation to fuel traders' records of stock movements and fuel deliveries were introduced to ensure data are available to assist in supply chain analysis;
- Following a significant investment in the required IT systems, new supply chain controls were introduced from January 2013. These controls require all licensed fuel traders, whether dealing in road fuel or marked fuel, to make monthly electronic returns to Revenue of their fuel transactions. Revenue is using this data to identify suspicious or anomalous transactions and patterns of distribution that will support follow-up enforcement action where necessary, and
- An intensified targeting, in co-operation with other law enforcement agencies on both sides of the border, of enforcement action against suspected fuel laundering operations.
In addition, Revenue and Her Majesty's Revenue and Customs in the UK completed an Invitation to Make Submissions process to identify a more effective fuel marker and it is expected that a new marker will be introduced in both jurisdictions early in 2015, following consultation with the oil industry and other stakeholders. To support further the integrity of the distribution system and minimise the risk of fraud, I introduced a provision in the Finance (No. 2) Act 2013 that will make a supplier who is reckless in supplying rebated fuel for a use connected with excise fraud liable for the duty at the standard rate of tax. This new provision will strengthen Revenue's hand in dealing with those traders supplying rebated fuel recklessly to dubious customers and will provide a further disincentive to such activity. Revenue has published guidelines for mineral oil traders which will assist them in identifying and avoiding such transactions. Revenue works closely with fuel sector representative bodies in tackling the problem and these bodies have been very supportive of the measures introduced to combat fuel laundering. Revenue chairs the Hidden Economy Monitoring Group to facilitate traders reporting suspicious matters through their representative associations on a confidential basis. This information can assist Revenue in closing down the illicit trade by identifying traders supplying fuel to launderers and by identifying outlets that are selling laundered diesel.
In addition, Revenue works in close cooperation with other enforcement authorities, in this jurisdiction and in Northern Ireland, in combating this all-island problem. The Cross Border Fuel Fraud Enforcement Group, which includes representatives of the Revenue Commissioners, An Garda Síochána, Her Majesty's Revenue and Customs and the Police Service of Northern Ireland and other relevant organisations, was established to facilitate this cooperation, and has proven effective in supporting the identification and targeting of the organised crime gangs, many of whom have links to paramilitaries and former paramilitaries, that are responsible for the bulk of fuel fraud. Revenue's enforcement strategy in the fuel sector has already yielded significant results. Since the beginning of 2011, over 3 million litres of fuel have been seized and 29 oil laundries detected and closed down, including 9 oil laundries in 2013. In addition, over 130 filling stations have been closed in that period. In the past 18 months Revenue has secured 6 convictions for mineral oil offences and a further 16 prosecution cases are underway.
The evidence available to Revenue, in terms of feedback from the legitimate trade and increased consumption of road diesel, indicates that the strategy has been effective. The legitimate trade indicates that the incidence of laundered diesel on the market has dropped significantly and that they have experienced an increase in road diesel sales. This is supported by tax data which shows increasing consumption of road diesel.
I am also advised by Revenue that they are investigating recent reports of petrol stretching, involving the illegal addition of kerosene to petrol. I understand that Revenue have taken samples from a number of filling stations reported to them by motorists and that they are pursuing enquiries to establish if petrol stretching has occurred and whether there is evidence to support prosecution. In light of the very successful cooperation between Revenue and the oil industry to tackle diesel laundering, I am confident that with similar cooperation and the supply chain information available to Revenue, the problem of petrol stretching can also be tackled successfully. It is essential that petrol distributors report any change in the pattern of legitimate supplies of fuel to the retail trade, which may indicate that specific retailers are shifting some of their sourcing to laundered or "stretched" fuel.
Motorists themselves should report to Revenue any suspicions concerning the source of adulterated petrol that may have damaged their engines. Revenue will investigate such reports and pursue prosecutions where possible. In that regard, Revenue has recently launched a dedicated section of its website specifically on the black economy and this includes an electronic reporting facility for anyone who has information about shadow economy practices such as petrol stretching.
293. Deputy Michael McGrath asked the Minister for Finance the projected structural deficit for 2015 and 2016; the medium target for closing the structural deficit; and if he will make a statement on the matter. [41359/14]
View answerThe latest projections, which are published in Budget 2015, are that the structural balance will reach -3.4 per cent of GDP in 2015, before improving further to -2.5 per cent of GDP in 2016. Currently, Ireland's Medium Term Objective (MTO) is to reach a balanced budget in structural terms. Once Ireland exits from the Excessive Deficit Procedure and becomes subject to the preventive arm of the Stability and Growth Pact, we will be required to deliver an improvement in the structural budget balance of at least 0.5 percentage points of GDP per annum until the MTO is achieved. Projections to 2018, which are included in Budget 2015, indicate that this quantum of improvement will be delivered.
294. Deputy Michael McGrath asked the Minister for Finance if the Central Bank of Ireland's loan to value restrictions on buy-to-let property purchases as currently proposed will apply to funds or real estate investment trusts acquiring residential property units; and if he will make a statement on the matter. [41363/14]
View answerI am informed by the Central Bank of Ireland that under the Regulations as they are currently drafted, the restrictions apply to "housing loans". Basically these are loans issued by a lender to a borrower and which are secured on residential property (where a borrower means a person to whom a housing loan is granted). A "person" in this sense incorporates both legal (i.e. corporates) and natural persons. Where the loan is secured on a residential property, the regulations will apply irrespective of the legal personality of the borrower.
The Central Bank has published a consultation paper on it proposals. The paper outlines its proposals regarding macro-prudential measures for mortgage lending. The consultation process is ongoing and the Central Bank has indicated that the final Regulations may, therefore, differ from what is in the consultation draft.
The consultation period runs until 8 December and the Central Bank invites all stakeholders to provide comments on the draft regulations and questions raised in the Consultation Paper.
295. Deputy Michael McGrath asked the Minister for Finance if he will clarify if stamp duty may be applied to the sale or transfer of loans by Irish regulated financial institutions; and if he will make a statement on the matter. [41364/14]
View answerIt is not possible by reference to the information provided by the Deputy to reply definitively to this query. Stamp Duty is charged on instruments of transfer or conveyance. Whether or not stamp duty arises on the transfer of loans depends on the precise nature of the loans and the means by which they are sold or transferred. Depending on the circumstances, a charge to Irish stamp duty of up to 2% can apply where loans are transferred by means or way of an instrument.
296. Deputy John O'Mahony asked the Minister for Finance the reason a person (details supplied) in County Mayo has not received their tax rebate; and if he will make a statement on the matter. [41389/14]
View answerI am advised by the Revenue Commissioners that a person can claim tax relief at the standard rate of income tax (20%) on qualifying tuition fees. The tax relief can be claimed either on the individual's tax return or at the end of the tax year when the fees have been paid. In this instance, the income earned by the person (details supplied) was below the tax threshold and no tax was deducted during the year in which the tuition fees were paid. Under these circumstances, there is no tax repayment due.
297. Deputy Eamon Gilmore asked the Minister for Finance his views on introducing tax relief on repayments of approved loan products for students on graduate entry medicine programmes here; and if he will make a statement on the matter. [41401/14]
View answerI have considered the proposal for the introduction of a tax relief for Graduate Entry Medicine (GEM) loans and I do not consider that the tax system is the appropriate way to address the affordability of the GEM programme.
The affordability and funding of undergraduate medical education is in the first instance a matter for the Department of Education and Skills, having due regard to the needs and requirements of the health system for medical practitioners.
The Department of Health's current focus in relation to the recruitment and retention of medical practitioners is on implementation of the recommendations of the Strategic Review of Medical Training and Career Structure, completed earlier this year. The Strategic Review reports address a range of barriers and issues relating to the recruitment and retention of doctors in the Irish public health system, and offer solutions and recommendations that will enable the State to build a sustainable medical workforce for the future.
298. Deputy Michael Moynihan asked the Minister for Finance in view of the capital gains tax relief measures announced in the budget to encourage farm consolidation, if he will facilitate the many farmers who are currently bound by the previous six year rule regarding consolidation; and if he will make a statement on the matter. [41405/14]
View answerI assume the Deputy is referring to capital gains tax relief for farm restructuring contained in Section 604B, Taxes Consolidation Act 1997. This relief was due to expire on 31 December 2015 but is being extended to 31 December 2016 and broadened to allow for restructuring through whole farm replacement.
I take it the 6 year rule referred to by the Deputy is that which provides for a claw-back of retirement relief given in respect of farmland which is transferred by a parent to his or her "child" as defined in section 599(1) of the Taxes Consolidation Act 1997 in certain situations. I am informed by the Revenue Commissioners that where a farm, in respect of which relief under Section 599 has been claimed, is sold or exchanged within the 6 year period as part of a farm restructuring to which Section 604B applies, this will not trigger a claw-back of the relief under Section 599(4).
299. Deputy Michael McGrath asked the Minister for Finance the total amount of equity capital that has been provided by the State to Irish Water to date; the planned equity investments in 2015 and 2016; and if he will make a statement on the matter. [41407/14]
View answerAs part of Budget 2014, Government agreed that a €240 million equity investment would be made in Irish Water from the Exchequer. In accordance with this agreement, in July 2014 a €185 million capital contribution was made and it is expected that a €54 million convertible debt instrument will be issued shortly.
In May 2014 Government agreed to the provision of a total of €406 million in equity investment for the two year period 2015/2016.
300. Deputy Dara Calleary asked the Minister for Finance the number of staff employed by the Strategic Banking Corporation of Ireland; and if he will make a statement on the matter. [41430/14]
View answerIn order to have the SBCI operational as quickly as possible, it will operate in a manner similar to how KfW operates in Germany, as a wholesale lender, that lends to on-lenders, who will then lend direct to SMEs. SMEs will use the on-lending institutions' resources to apply for an SBCI funded product. The on-lending model is designed to ensure that as much of the benefit of the SBCI's low funding cost is passed onto SMEs. This also means avoiding as much operational overhead as possible.
Recruitment for the Strategic Banking Corporation of Ireland (SBCI) is currently being conducted by the National Treasury Management Agency (NTMA). The NTMA is the State body which is mandated to provide resources to the SBCI. The SBCI will in turn reimburse the NTMA for these resources. Staff will be employed by the NTMA to resource the SBCI in much the same way the National Asset Management Agency is resourced. Recruitment at the SBCI has commenced and it is anticipated the SBCI will reach its full complement of staff by year end. The SBCI will be a tight operation and it is expected that between 10 and 15 staff will be sufficient to carry on the business of the SBCI.
At the end of October, four direct full time staff were working in the SBCI and a number of NTMA staff were providing the SBCI with support services. These support services were legal, IT, HR, Communication and Administrations. The Chief Executive Officer of the SBCI will also be employed by the NTMA but specifically for the role of CEO of the SBCI.
301. Deputy Dara Calleary asked the Minister for Finance the progress made by the Strategic Banking Corporation of Ireland in securing funding; the amount of funding that has come from KfW; and if he will make a statement on the matter. [41431/14]
View answerThe Strategic Banking Corporation of Ireland (SBCI) has been established by the Government as a means of ensuring that SMEs in Ireland are provided with sufficient finance for growth. Loan agreements with the international funders, KfW and the European Investment Bank, to the value of €550m have been signed to fund the SBCI during its initial period of operations.
The SBCI is funded to the value of €800m of which €150m is from KfW, €400m from the European Investment Bank and €250 from the National Pension Reserve Fund. After the initial period of operations, the SBCI in conjunction with its funders, will review its funding requirements for its further development.
Currently, the SBCI is working with its first lending partners to provide initial funding to the SME sector by the end of 2014. A full roll-out will occur during January 2015 with traditional bank lenders and new credit providers from beyond the traditional bank sector allowing for the distribution of SBCI funding to the SME sector in Ireland on a prudent basis.
302. Deputy Dara Calleary asked the Minister for Finance when the Strategic Banking Corporation of Ireland will commence providing funding for lending; and if he will make a statement on the matter. [41432/14]
View answerThe Strategic Banking Corporation of Ireland (SBCI) has been established by the Government as a means of ensuring that SMEs in Ireland are provided with sufficient finance for growth. Loan agreements with the international funders, KfW and the European Investment Bank, have been signed.
The SBCI is working with its first lending partners to provide initial funding to the SME sector by the end of 2014. A full roll-out will occur during January 2015 with traditional bank lenders and importantly new credit providers from beyond the traditional bank sector being involved. All of this will allow for the distribution of SBCI funding to the SME sector in Ireland on a prudent basis.
303. Deputy Dara Calleary asked the Minister for Finance the number of institutions with outstanding loans to small and medium enterprises here; the number of institutions that are subject to targets for dealing with SME loan arrears; if the details of actions taken by banks subject to targets to deal with arrears will be published; and if he will make a statement on the matter. [41434/14]
View answerAs the Deputy is aware, targets to move distressed small and medium enterprise borrowers onto longer-term solutions were implemented in 2013 for a number of institutions involved in SME lending. The institutions are required to report performance against the targets on a quarterly basis to the Central Bank along with specific management information. To date, the institutions report good progress in agreeing solutions with many distressed SME borrowers which will, in time, resolve the loans. The targets are not in the public domain, our dealings with each institution are on a bilateral basis.
While I do not have precise numbers on the financial institutions with outstanding SME loans, the full list of Credit institutions regulated by the Central Bank of Ireland has been forwarded to the Deputy with the written reply.
The Deputy may also wish to note that in June 2014 the Central Bank of Ireland's Financial Stability Division published the SME Market Report (H1 2014) providing an up-to-date picture of developments in the Irish SME credit market. The report which provides information on credit demand, credit access, loan terms and conditions, loan default, interest rates and credit market concentration can be found at the following link:
304. Deputy Dara Calleary asked the Minister for Finance when the central credit register will be established; and if he will make a statement on the matter. [41435/14]
View answerThe Credit Reporting Act 2013 provides that the Central Bank is responsible for the establishment and operation of the central credit register. The Central Bank informs me that it intends to take a phased approach to the establishment and development of the register. The initial phase of the central credit register will focus on the consumer credit market and is expected to become operational by mid-2016.
The operational implementation of the credit register is a complex process and the final timeline will be influenced by
1. the outcome of a public procurement process currently underway to source services and solutions;
2. the scale of technical and operational changes to be implemented by lenders; and
3. the final detailed obligations to be set out in regulations.
It is anticipated that 2015 will be spent in developing and testing the technical solutions in partnership with relevant stakeholders, with data being supplied on a phased basis during the course of late 2015 and into 2016.
305. Deputy Finian McGrath asked the Minister for Finance his views regarding the National Asset Management Agency selling 600 apartments to investors when there is a shortage of properties in the market for people who have saved in order to buy their first home; his views on related correspondence (details supplied); and if he will make a statement on the matter. [41441/14]
View answerThe strong improvement in conditions in the Irish commercial and residential property markets over the past year created opportunities for NAMA to increase the flow of Irish property assets and loan sales to the market. Earlier this year, NAMA announced that, in line with its obligations under Section 10 of the NAMA Act, it considered that the best financial outcome for the State would be achieved through a managed process of accelerating disposals in an orderly way with the target of redeeming 80% of senior debt (a cumulative €24 billion) by end-2016. Following on from the Section 227 review of NAMA which was conducted by my Department, I fully endorsed NAMA's strategy of seeking to take full advantage of strong market conditions to reduce the contingent liability on taxpayers represented by NAMA's senior, State-guaranteed, bonds.
I am advised by NAMA that, in order to achieve its revised debt redemption targets, it must arrange for the sale not only of individual assets but also of portfolios of loans and property assets to investors. In addition to over 5,000 individual residential units that NAMA debtors and receivers have sold to date, assets will continue to be made available for sale, on an individual basis, to potential purchasers. NAMA's website includes a list of some 2,300 properties in Ireland which are either currently for sale or will shortly be offered for sale through receivers. NAMA's policy of ensuring that the sale of all loans and the sale of properties by debtors and receivers should be openly marketed ensures that the best price available in the market is achieved in all instances.
The Deputy should note that, where NAMA arranges for the sale of portfolios of apartments, these are typically rented to tenants and there is no question of such tenants being placed at any disadvantage as a result of the change of ownership. Indeed, it would not be fair or reasonable to displace tenants in order to offer the apartments for sale to purchasers as either individual units or as part of a portfolio. As the properties are already tenanted, they form part of current housing supply and displacing one category of housing tenure to accommodate another category would not add to overall housing supply. I would also point out that the purchasers of apartment blocks are usually large investors who tend to apply fully professional standards in their capacity as landlords and this is something that I fully welcome given the need, in any properly functioning property market, for a well-managed private rental sector.
306. Deputy Róisín Shortall asked the Minister for Finance the amount of revenue raised and the number of persons through the imposition of a 45% USC rate on bank bonuses with a breakdown by year. [41452/14]
View answerSection 531AAD of the Taxes Consolidation Act 1997 provides for a charge on bonus payments that exceed €20,000, paid to employees of financial institutions that received financial support from the State under the Credit Institutions (Financial Support) Act 2008. This charge, the "excess bank remuneration charge", is incorporated into the Universal Social Charge and applies in all respects as if it was USC except that it is charged at a higher rate of 45%. The normal USC rates are not applied. The charge applies for 2011 and subsequent tax years.
The revenue raised and number of individuals who have paid the charge is as follows:
|
Year |
Revenue Raised |
Number of Individuals |
|
2011 |
€1.288m |
47 |
|
2012 |
Nil |
Nil |
|
2013 |
Nil |
Nil |
307. Deputy Billy Timmins asked the Minister for Finance the process, including length, number of interviews, advertising and short listing for the position of Secretary General of his Department; when a person (details supplied) was appointed for their recent replacement; and if he will make a statement on the matter. [41463/14]
View answerI wish to inform the Deputy that the appointment of the Secretary General of the Department of Finance is a Government appointment. The appointment of John Moran was made following an open competition conducted by the Top Level Appointments Committee. In respect of the last appointment which the Deputy has asked about, expressions of interest were sought from all suitable officers within the Civil Service. These expressions of interest involved the submission of a Curriculum Vitae and a statement of the official's suitability for the post. On completion of the expressions of interest process I, as Minister for Finance, met with each of the officers who expressed an interest in the position.
The process for filling the post reflected the importance and urgency of filling the position to enable the Department to manage Government finances and play an integral role in the achievement of the Government's economic and social goals having regard to the Programme for Government.
308. Deputy Michael McGrath asked the Minister for Finance the number of mortgages still held by IBRC in special liquidation; the proportion which are residential mortgages and buy to let respectively; the arrears rate; and if he will make a statement on the matter. [41475/14]
View answerI am advised by the Special Liquidators that there are 6,219 residential mortgage accounts still held by Irish Bank Resolution Corporation Limited (in Special Liquidation). Of these, 5,839 (94%) relate to owner occupier properties and 380 (6%) relate to residential investment/buy to let properties.
I am further advised that of the 6,219 residential mortgage accounts still held by Irish Bank Resolution Corporation Limited (in Special Liquidation), that:
- 9% of the owner occupier mortgages are in arrears (greater than 90 days).
- 39% of the residential investment/buy to let properties are in arrears (greater than 90 days).
