Written Answers Nos. 184-198
184. Deputy Michael Healy-Rae asked the Minister for Finance the reason persons (details supplied) who are paying their property tax by cheque have to pay by 7 January 2015 while persons who pay by direct debit it will not be processed through their accounts until 21 March 2015; and if he will make a statement on the matter. [43028/14]
View answerI am assuming that when the Deputy refers to Direct Debit he means Single Debit Authority as Direct Debit normally involves a monthly phased payment arrangement.
I am informed by the Revenue Commissioners that they have provided a wide range of payment options to assist property owners in paying their 2015 Local Property Tax (LPT) in a manner and at a time that best suits their individual circumstances. This includes paying in full in a single payment or making phased payments over the course of 2015.
Section 119 of the Finance (Local Property Tax) Act 2012 (as amended) sets out the dates for payment of LPT. Although the strict payment due date for the year 2015 is 1 January 2015, Revenue has extended this deadline to 7 January 2015, to take account of the holiday period.
Any owner who opts to pay their 2015 LPT in full by cheque, postal order, cash, debit card or credit card should make their payment on or before 7 January 2015. Property owners who opt to pay their 2015 LPT by Single Debit Authority should confirm this payment method to Revenue on or before 7 January 2015. The payment, however, will not be deducted from their current account until 21 March 2015. This extended deadline is a concession on Revenue's part. The Deputy will be aware that this was how the Single Debit Authority payment method also operated for 2014 LPT.
Property owners who paid in full with a single payment in 2014 and wish to avail of a phased payment option such as Direct Debit, Deduction at Source or regular cash payments through a Payment Service Provider, should confirm their payment method to Revenue by 25 November 2014. This will allow sufficient time for the request to be put in place for the first pay-period of the New Year.
I am also informed that using the Single Debit Authority facility, which is an electronic cheque, is a safe, cheap and straightforward way to pay LPT and allows the owner to benefit from the extended payment deadline in March 2015. Anyone who has paid by cheque previously but wishes to pay their 2015 LPT by Single Debit Authority can simply do so by completing the mandate for this payment option online, or on the paper Form LPT1A, and should submit it to Revenue before 7 January 2015.
185. Deputy Patrick O'Donovan asked the Minister for Finance if his Department examined the issue of the sale of alcohol in supermarkets and other multiples below the price which was originally paid for it, as a result of claiming VAT rebate on the differential from the Revenue Commissioners; and if he will make a statement on the matter. [42839/14]
View answerI would point out that there is no Exchequer loss as a result of below-cost selling of alcohol. VAT is a tax on the value added to a supply, and the collection and recovery of VAT takes place at each stage of the chain of supply from manufacturing to retailer. Under EU and domestic VAT rules, traders who are registered for VAT collect VAT on the goods and services that they sell. In turn such traders are entitled to recover the VAT they incur on their business inputs used in the purchase or production of goods or delivery of services. Consequently, if there is a decrease in value at any stage in the process the trader is entitled to a refund of the excess of VAT incurred over that collected.
In this case, where a retailer is in a situation of net VAT gain as a result of below cost selling, this is not a loss to the Exchequer or an additional benefit to the retailer, it is merely how VAT is charged.
186. Deputy Michael McGrath asked the Minister for Finance the market test criteria that Irish Water and other semi-State companies must meet in order for their costs not to be included in the general Government accounts; and if he will make a statement on the matter. [42850/14]
View answer187. Deputy Michael McGrath asked the Minister for Finance in a situation where a commercial semi-State collected, as distinct from billed, less than 50% of its revenue from non-State source, if it will still pass the market test not to be included on the State's books; and if he will make a statement on the matter. [42851/14]
View answer217. Deputy Michael McGrath asked the Minister for Finance when EUROSTAT will make a determination as to whether Irish Water meets the criteria as an off-balance sheet entity; and if he will make a statement on the matter. [43204/14]
View answerI propose to take Questions Nos. 186, 187 and 217 together.
At national level the CSO are responsible under EU regulation for ensuring that all units within the economy are classified according to the rules set out under the European system of accounts (ESA2010). Eurostat monitor this role through documentation, including the excessive deficit procedure (EDP) inventory for Ireland, and through biennial dialogue visits. Eurostat are the ultimate arbiters on the classification of units in relation to EDP and other Government Finance Statistics.
The market/non-market test, as described in the ESA 2010, determines if a government controlled institutional unit is a market producer. To determine this, Irish Water or any other semi state company, must sell its products at an economically significant price which, in practice, would be assessed if the sales of the producer cover a majority of the production costs over a sustained multi-year period. The plausibility of the semi state operating as a market producer is also tested by assessing the level of sales dependent on government funding. In the case of a new public enterprise, the classification will be based on the business plan and special attention will be given to check whether the unit becomes a market producer in a short period of time. The market status of government controlled institutional units is assessed on a regular basis.
As per standard accruals accounting all billed sales will count towards revenue. If in the future bad debts are written off Irish Water may require new revenue streams to make up the shortfall. This could lead to an increase in the government funding which will be assessed in the market/non-market and plausibility tests.
Once decisions are finalised regarding the structure and financing of Irish Water, a submission will be made to the CSO and Eurostat regarding the classification of Irish Water. Until this submission is received the timeline cannot be finally confirmed. It would be expected that a decision will be made by the time of the next EDP reporting date (end March 2015).
188. Deputy Michael McGrath asked the Minister for Finance the level of equity capital he expects to provide Irish Water to meet its requirements; and if he will make a statement on the matter. [42854/14]
View answerAs part of Budget 2014, Government agreed that a €240 million equity investment would made in Irish Water by the Exchequer. In accordance with this agreement, in July 2014 €185 million in 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.
189. Deputy Michael McGrath asked the Minister for Finance if the Revenue Commissioners expects to continue the practice of publishing income statistics; and if he will make a statement on the matter. [42867/14]
View answerI am advised that the Revenue Commissioners have proactively reviewed both the content and dissemination methods for their publication of statistical information. They are moving to provide their most relevant and sought after information in new and more accessible formats for statistics across all of the taxes and duties. Whereas previously information was provided by way of static tables in documents, Revenue is now adding to this by making the statistical information available to be queried and downloaded in a range of machine readable formats. This will make it much easier for interested parties and researchers or analysts to access and use Revenue's statistics.
Statistical material for 2012 was published this summer, the information for 2013 will be published in the new format in the coming weeks on the Commissioners' Statistics webpage: http://www.revenue.ie/en/about/statistics/index.html.
The information on this page will then be updated in due course, as newer data become available, rather than on an annual basis as previously.
I commend the Revenue Commissioners for this initiative, as increased availability of information will enable better informed research on public policy issues in Ireland, and this also places Revenue at the forefront of the Government's Open Data initiative.
190. Deputy Pádraig Mac Lochlainn asked the Minister for Finance his plans to put a cap on the rate of APR that moneylending firms may charge for loans. [42877/14]
View answerMy colleague, Minister of State Simon Harris T.D., said in the House on 9 October 2014 in a Topical Issues Debate, that the Government was concerned that the introduction of a cap on the interest rates that can be charged by moneylenders would not necessarily be in the interests of consumers or the wider financial system.
The Central Bank is the competent authority with regard to licensed moneylending and is responsible for overseeing and regulating their activity. Legislative provisions relating to moneylending are contained in the Consumer Credit Act 1995 (as amended). It is an offence under that Act to engage in the business of moneylending without a licence granted by the Central Bank. I understand that there are 39 licensed moneylenders operating in Ireland at present.
The legislation does not provide for an interest rate cap for moneylenders. The introduction of an interest rate ceiling may not achieve the objective of lowering the total cost of credit where, for example, the licensed moneylender chose instead to extend the duration of the loan.
Lower interest rate ceilings could also result in excluding low income households from access to credit that have repayment capacity, even at the high rates charged by licensed moneylenders. I would have some concerns therefore about the imposition of an industry-wide interest rate cap without a detailed assessment of its impact on consumers. Often the loans are for small amounts, are needed immediately by the customers and are made available and repaid at the home of the customer. The shorter the duration of the loan e.g. two weeks, the higher the Annual Percentage Rate of Charge (APRC) as the APRC is an annualised measure of the interest charged. This service may impose extra costs on the moneylenders. The Deputy may also wish to note that, under section 47 of the Consumer Credit Act, a customer may apply to the Circuit Court for a declaration that the total cost of the credit provided is excessive.
191. Deputy Pádraig Mac Lochlainn asked the Minister for Finance if the Central Bank of Ireland intends to inform moneylenders' customers of their legal rights, especially in advance of the Christmas season. [42878/14]
View answer192. Deputy Pádraig Mac Lochlainn asked the Minister for Finance the way moneylenders can justify that a majority of their customers, who are on welfare benefits, are making loan repayments at a weekly rate of €50 or more. [42879/14]
View answerI propose to take Questions Nos. 191 and 192 together.
I have been advised by the Central Bank that consumers of licensed moneylending are protected by a range of provisions that moneylenders must adhere to, including but not limited to the Consumer Protection Code for Licensed Moneylenders, the European Communities (Consumer Credit Agreements) Regulations 2010 and the Consumer Credit Act 1995. These have detailed requirements specifying the information that a moneylender must provide to a consumer, prior to entering into a loan and also during the term of a loan.
Before entering into a loan a moneylender has a statutory duty under Regulation 11 of the European Communities (Consumer Credit Agreements Regulations) 2010 to assess the creditworthiness of a consumer, using sufficient information. While the Central Bank acknowledges that the home collection credit industry may lend itself to building on-going relationships with consumers, the Central Bank has stated that such on-going relationships should not be solely relied upon when assessing consumers' creditworthiness. The Central Bank expects that moneylenders must consider all existing loans and any arrears a consumer may have when assessing creditworthiness and must have strong documented evidence of the consumer's income, expenditure and ability to repay, before advancing each loan.
A moneylender must have a warning on the loan agreement highlighting that it is a high cost loan. Furthermore, the Central Bank maintains a register of all licensed moneylenders, which includes details of the maximum APRs and costs of credit that they are permitted to charge.
The Central Bank periodically undertakes research to inform the regulatory approach to the licensed moneylending industry in Ireland and to see how the firms are treating their customers. The most recent research, which was conducted in 2013, included engagement with customers of moneylenders as well as moneylenders themselves. The engagement with customers included structured telephone interviews with 500 customers and in-depth interviews with 8 customers. In addition, the research agency consulted with key stakeholder bodies, who provided a valuable insight into the review and helped provide a balanced analysis of the industry. The report was published in November 2013 and is available on the Central Bank's website at www.centralbank.ie.
The Central Bank recently advised the moneylending industry that assessment of the creditworthiness of consumers will be a future area of focus for the Bank and, where breaches are identified, the Bank will take steps to enforce compliance (including monetary or other penalties). For additional information see the industry newsletter and the Central Banks communication on responsible lending on the Central bank's website at www.centralbank.ie.
The Central Bank have also indicated that they will consider related media opportunities as part of its on-going media strategy.
193. Deputy Pádraig Mac Lochlainn asked the Minister for Finance his views that it is justifiable that a lending company that is licensed by the Central Bank of Ireland is allowed to send marketing letters to current customers whose accounts are in arrears of more than €200. [42880/14]
View answerI assume from the context of the question that the Deputy is referring to a licensed moneylender. I have been advised by the Central Bank that the Consumer Protection Code for Licensed Moneylenders sets out specific requirements in respect of advertising by moneylenders. While the Code does not restrict the advertising of new credit facilities to existing customers in arrears, moneylenders are prevented from offering unsolicited pre-approved credit facilities. In addition, Regulation 11 of S.I. No. 281/2010 - European Communities (Consumer Credit Agreements) Regulations 2010 obliges creditors, before concluding a credit agreement, to assess the credit worthiness of the consumer on the basis of sufficient information, where appropriate obtained from the consumer and, where necessary, on the basis of a consultation of the relevant database.
I would advise the Deputy to report any possible breaches of the Code or the 2010 Regulations to the Central Bank.
194. Deputy Pádraig Mac Lochlainn asked the Minister for Finance if he will ensure that all moneylending companies that use so-called self-employed agents should be made to make immediate disclosure to the Revenue Commissioners, providing full details of the agent, that is, PPS number, name, address and start date. [42881/14]
View answerThe Central Bank has advised me that section 97 (1) of the Consumer Credit Act, 1995 (CCA) specifically envisages that a moneylender can appoint agents to act on its behalf. The agent is acting under the umbrella of the moneylender's licence, and as such is subject to the same compliance obligations as the licence holder, i.e. the Consumer Protection Code for Licensed Moneylenders (ML Code), the European Communities (Consumer Credit Agreements) Regulations 2010 and the CCA. Therefore, where the Central Bank becomes aware of potential non-compliance with regulatory requirements by an agent of a licensed moneylender, this would be treated as non-compliance by the licensed moneylender.
I am advised by the Revenue Commissioners that Sections 889 and 894 Taxes Consolidation Act 1997 require every person (which includes an individual, partnership or company), who in the course of a trade or business makes a payment to another person, to make a return of such a payment (or payments) to Revenue.
If the Deputy has concerns that either:
- some moneylenders may not be complying with their obligation to notify the Revenue Commissioners of the commissions paid to their agents; or
- some agents of moneylenders may not be fulfilling fully their tax obligations,
and he has information in that regard, he may pass it to my officials who will ensure that it is sent to the Revenue Commissioners or he may contact Revenue directly.
195. Deputy Pádraig Mac Lochlainn asked the Minister for Finance the reason agents of moneylending companies are not vetted by the authorities. [42882/14]
View answer197. Deputy Pádraig Mac Lochlainn asked the Minister for Finance if the Central Bank of Ireland offers audit training programmes for agents of moneylending companies. [42884/14]
View answerI propose to take Questions Nos. 195 and 197 together.
The Central Bank has advised me that section 97 (1) of the Consumer Credit Act, 1995 (CCA) specifically envisages that a moneylender can appoint agents to act on its behalf. The agent is acting under the umbrella of the moneylender's licence, and as such is subject to the same compliance obligations as the licence holder, i.e. the Consumer Protection Code for Licensed Moneylenders (ML Code), the European Communities (Consumer Credit Agreements) Regulations 2010 and the CCA. Therefore, where the Central Bank becomes aware of potential non-compliance with regulatory requirements by an agent of a licensed moneylender, this would be treated as non-compliance by the licensed moneylender.
The ML Code makes it clear that agents of moneylenders are within the scope of the Code. The Scope section provides as follows:
"Throughout this text, reference to a 'moneylender' refers to a moneylender licensed under the Act, its officers, employees and persons who engage in the business of moneylending on behalf of the moneylender.'
Furthermore, under the Central Bank's Fitness & Probity Regime all licensed moneylenders are responsible for ensuring that individuals performing Controlled Functions (CFs) meet the Fitness & Probity Standards, both prior to appointment and on an on-going basis. Agents of licensed moneylenders perform CFs and, accordingly, the licensed moneylender must ensure that it carries out due diligence to assess its appointed agents' fitness and probity. Moneylenders are responsible for ensuring that all individuals performing a CF meet the required Fitness & Probity Standards.
The Central Bank provides compliance assistance to licensed moneylenders through its industry newsletter and other feedback and guidance to regulated firms which are available on the Central Bank's website at www.centralbank.ie.
196. Deputy Pádraig Mac Lochlainn asked the Minister for Finance if the Central Bank of Ireland has conducted a full audit on all moneylending companies to check on illegal or bad practices. [42883/14]
View answerI have been advised by the Central Bank that in relation to licensed moneylenders, compliance with supervisory and legislative requirements is monitored on an ongoing basis through a robust annual licensing process, advertising and market intelligence monitoring and themed and institution-specific inspections.
Issues identified are addressed with the relevant firms. Failures to adhere to the supervisory and legislative requirements are dealt with appropriately. This may include proceedings under the Bank's Administrative Sanctions Procedures. The Central Bank has no power or role in the regulation of illegal moneylending and reports any such suspicions to the Garda Síochána.
198. Deputy Terence Flanagan asked the Minister for Finance the new deposit that will be required by first-time buyers to take out a mortgage in 2015; and if he will make a statement on the matter. [42889/14]
View answerAs the Deputy will be aware, the Central Bank of Ireland has published a consultation paper on a macro-prudential policy for residential mortgage lending. A copy of the Consultation Paper is available on the Central Bank website (at http://www.centralbank.ie/regulation/poldocs/consultation-papers/Documents/CP87%20Macro-prudential%20policy%20for%20residential%20mortgage%20lending/Macro-prudential%20policy%20for%20residential%20mortgage%20lending.pdf). As the consultation process is currently underway, the precise measures on this matter remain to be finalised. Comments on the contents of the consultation paper can be made electronically to the Central Bank at realestate@centralbank.ie by 8 December 2014.
Consumers who have already been approved mortgages, but who will not draw down those loans until next year, may be interested to note the following points from the Central Bank consultation paper:
- If a regulated financial service provider has entered into a Mortgage Offer (Sanction in Principle) commitment before the date on which the loan-to-value/loan-to-income (LTV/LTI) limits come into effect, the limits do not apply to that commitment. If a regulated financial service provider enters into a Mortgage Offer (Sanction in Principle) commitment after the date on which the LTV/LTI limits come into effect, the limits do apply to that commitment should the mortgage be drawn down.
- Committed but undrawn amounts on an existing mortgage lending facility that was formally agreed via a signed letter of offer before the date on which the LTV/LTI limits come into effect will not be included in the limits.
