Written Answers Nos. 199-213
199. Deputy Michael McNamara asked the Minister for Finance if he will dispel concerns over whether a property (details supplied) in County Clare which is being sold by the Irish Bank Resolution Corporation in special liquidation is being sold to the highest bidder. [42974/14]
View answerI am advised by the Special Liquidators that Irish Bank Resolution Corporation Limited (in Special Liquidation) do not hold an interest in this property or the related loan.
While I am unable to confirm who holds the interest in this site, I would encourage the Deputy to revisit the details of this case.
200. Deputy Michelle Mulherin asked the Minister for Finance if he will establish a compensation fund for persons whose vehicles have been damaged by contaminated petrol from the assets such as filling stations, tankers or cash which are seized in connection with prosecutions and convictions for fuel laundering and stretching; and if he will make a statement on the matter. [42992/14]
View answer201. Deputy Michelle Mulherin asked the Minister for Finance the extent to which the Revenue Commissioners as part of their investigations have been taking samples of residue from the engines and fuel tanks of cars that have had their engines damaged by suspect quality petrol since June 2014; and if he will make a statement on the matter. [42993/14]
View answer207. Deputy Michelle Mulherin asked the Minister for Finance the number of spot checks that have been conducted by the Revenue Commissioners of petrol tanks at filling stations around County Mayo and the Border and midlands region for contaminated fuel from June 2014 to date; the number of cases of contaminated petrol that have been detected from such checks and the action been taken arising from same; and if he will make a statement on the matter. [43075/14]
View answer208. Deputy Michelle Mulherin asked the Minister for Finance if spot checks are being conducted by the Revenue Commissioners of petrol tankers delivering to filling stations around County Mayo and the Border and midlands region for contaminated fuel on fuel tankers; the number of cases of contaminated petrol have been detected from June 2014 to date from such checks; and if he will make a statement on the matter. [43076/14]
View answer214. Deputy Michelle Mulherin asked the Minister for Finance the additional resources as well as technical, scientific and other specialist personnel that have been allocated to the Revenue Commissioner and other State agencies and testing facilities to ensure that contamination in petrol is detected before it is purchased by consumers; and if he will make a statement on the matter. [43136/14]
View answer215. Deputy Michelle Mulherin asked the Minister for Finance the scientific analysis carried out by the Revenue Commissioners to identify contamination of petrol supplies in the State; where samples are sourced and tested; the percentage of the petrol supplies in the State that would be regarded as having been sampled; and if he will make a statement on the matter. [43137/14]
View answerI propose to take Questions Nos. 200, 201, 207, 208, 214 and 215 together.
I am advised by the Revenue Commissioners, who are responsible for tackling fuel fraud, that they are very aware of the risks posed to consumers' vehicles, legitimate businesses and the Exchequer by all forms of fuel fraud.
Revenue has, over the recent past, received reports from a variety of locations around the country of problems relating to petrol quality, and suggestions that these problems are attributable to petrol stretching. Revenue investigates all complaints of this kind and fuel samples are taken from filling stations and referred to the State Laboratory for analysis where the investigating officers have reason to suspect excise fraud. The State Laboratory makes use of an array of tests to determine whether an adulteration of the petrol has occurred.
Revenue are working closely as part of a joint investigation with An Garda Síochána into a concentration of complaints in Co. Mayo. As part of this investigation, I understand that An Garda Síochána are following up on the examination of engines and residue on engine parts from vehicles that are alleged to have been damaged as a result of suspect petrol.
A total of 79 samples of petrol from filling stations in the Border Midlands West Region have been referred for analysis to the State Laboratory following checks conducted from June 2014 to date. Conclusive results have been received in one case which confirms contamination through the presence of kerosene and a file is being prepared for prosecution in this case. A second positive contamination result is currently under investigation. To date, no evidence of fraudulently contaminated petrol has been found in the remaining samples.
As part of Revenue's normal operating procedures, fuel delivery tankers are challenged when encountered by Enforcement officers throughout the Border Midlands West Region. No cases of contaminated petrol have been identified as a result of these checks from June 2014 to date.
Motorists themselves should take care about where they source their petrol and should report any suspicions to Revenue. Revenue has recently launched a dedicated section of its website specifically dealing with the shadow economy and this includes a reporting facility for anyone who has information about shadow economy practices including the adulteration of fuel.
Petrol stretching is an offence under section 102 (1A) of the Finance Act 1999 and the Deputy can be assured that, if Revenue's investigations and the analysis of fuel samples by the State Laboratory indicate the presence of illegal stretching agents in petrol, Revenue will take action and pursue prosecutions against offenders where possible.
I am advised that it would not be feasible to undertake sampling and analysis of all petrol being delivered to filling stations. Checking for contamination will, however, be carried out at various stages of the fuel supply chain, on the basis of an evaluation of the risk of the likelihood of adulteration.
Information on the proportion of national retail sales of petrol accounted for by the filing stations from which samples have been taken is not readily available.
The Revenue Commissioners are a fully integrated tax and customs administration and it is not possible to disaggregate resources deployed exclusively at any given time on a particular element of their enforcement work. There are approximately 2,000 staff engaged on activities that are dedicated to targeting and confronting non-compliance. These front-line activities include anti-smuggling and anti-evasion, investigation and prosecution, audit, assurance checks, anti-avoidance, returns compliance and debt collection. I am advised that the current issues relating to petrol quality are being dealt with as a high priority and that the deployment of staff to address those issues, from within the existing resources available to Revenue, reflects that priority. I understand also that the Revenue Commissioners are working closely with the State Laboratory, which, in addition to analysing samples referred to it, is providing technical and scientific support for the on-going investigations.
The first point of contact for motorists whose vehicles may have been affected should be their motor insurance companies. Persons affected should also contact the point of purchase of the fuel. If they remain unsatisfied, they may have recourse to civil remedies and should seek legal advice.
The Competition and Consumer Protection Commission - a merger of the Competition Authority and the National Consumer Agency - has been established to enforce consumer protection law and may be able to provide assistance to those affected by petrol stretching who are seeking redress.
202. Deputy Pearse Doherty asked the Minister for Finance the cost of the change announced in budget 2015 of the reduction in the 41% rate of income tax to 40% and the decrease in the threshold at which the higher rate of tax is paid. [43032/14]
View answer203. Deputy Pearse Doherty asked the Minister for Finance the cost of the decrease in €1,000 in the threshold at which the higher rate of tax is paid if the income tax rates remained unchanged in budget 2015. [43033/14]
View answer204. Deputy Pearse Doherty asked the Minister for Finance the cost of the decrease in the top rate of income tax in budget 2015 if the threshold remained the same. [43034/14]
View answer205. Deputy Pearse Doherty asked the Minister for Finance the cost of or the revenue raised by each of the individual changes to the USC rate in budget 2105, that is the cost of each of the following measures, charging USC on income from €0 to €12,012 @ 1.5%, charging USC on income from €12,013 to €17,576 @ 3.5%, charging USC on income from €17,577 to €70,044 @ 7%, charging USC on income from €70,044 to €100,000 @ 8%, charging USC on PAYE income in excess of €100,000 @ 8%, charging USC on self-employed income in excess of €100,000 @ 11%, charging USC for medical card holders whose aggregate income does not exceed €60,000 at a maximum rate of 3.5% and charging USC for individuals aged 70 years and over whose aggregate income is €60,000 at a maximum rate of 3.5% USC. [43035/14]
View answerI propose to take Questions Nos. 202 to 205, inclusive, together.
I am advised by the Revenue Commissioners that Budget costs are estimated as a package of combined measures. The sum of the costs when the measures are separately estimated will not exactly equal the total cost of the package taken together. Given interactions between tax rates and bands, the sum of the costs of reducing tax band and rates will be lower when taken together than if each were costed individually.
I am informed by the Revenue Commissioners that the first and full year estimated cost of the reduction to the 41% tax rate to 40% and the €1,000 increase in the standard rate band is €292 million and €405 million respectively.
The first and full year estimated cost of increasing the standard rate band by €1,000 without changing the higher rate of income tax is €134 million and €180 million respectively.
The first and full year estimated cost of decreasing the 41% tax rate to 40% without changing the standard rate band is €164 million and €234 million.
The first and full year estimated cost of reducing the 2% and 4% USC rates to 1.5% and 3.5% respectively and adjusting the USC threshold from €10,036 to €12,012 is €239 million and €325 million respectively.
The first and full year estimated yield from introducing an 8% rate of Universal Social Charge applicable to incomes over €70,044 is €52 million and €71 million respectively.
The first and full year estimated yield from the increase to 11% of the Universal Social Charge surcharge applicable to self-employed incomes over €100,000 is €18 million and €42 million respectively.
The first and full year estimated cost of reducing the maximum rate of USC from 4% to 3.5% for medical card holders and over 70s with aggregate income less than €60,000 is €16 million and €22 million respectively.
These figures are estimated by reference to 2015 incomes, from the Revenue tax forecasting model using latest actual data for the year 2012, adjusted as necessary for income, self-employment and employment trends in the interim. They are provisional and may be revised. Married persons or civil partners who have elected or who have been deemed to have elected for joint assessments are counted as one tax unit.
206. Deputy Catherine Murphy asked the Minister for Finance if the development contribution fund located at local authority level continues to be set against the general Government deficit; if so the dialogue there is between the Department of the Environment, Community and Local Government and his Department; and if he will make a statement on the matter. [43061/14]
View answerThe development contribution fund is included within the general government figures under the area of local government. As all entities classified within the general government sector contribute to the formation of the overall government balance, expenditure financed by these funds count as general government expenditure in the year it occurs. Similarly, development contributions are regarded as general government revenue in the year that they are received.
There has been no specific dialogue on this matter between this Department and the Department of Environment, Community and Local Government in the recent past.
209. Deputy Michael McGrath asked the Minister for Finance the reason the 2015 place of supply VAT changes in the budget 2015 will only bring in €100 million in 2015 but will bring in €125 million in 2017 and €150 million in 2019; if any glide path arrangements were made with any companies to allow them bring in the new VAT rate over a period of time; if he will identify these companies; if any arrangements have been made with the UK Exchequer in regard to these changes; and if he is concerned that there is likely to be a big cost increase in Sky television subscriptions due to the VAT change which means the company is now paying VAT here rather than paying a sheltered rate previously to the British Exchequer. [43077/14]
View answerCross-border EU telecommunications, broadcasting and electronically supplied services are currently charged to VAT in the Member State of the supplier. From 1 January 2015 these services will be charged to VAT in the Member State of the consumer. The VAT changes mean that Member States will lose VAT revenue in respect of existing outward sales to consumers in other Member States but will gain revenue in respect of inward sales to their own consumers of these services. Ireland is set to gain from the VAT changes because we are a net receipt of these services from other Member States. The majority of electronic supplies in Europe, such as online music and books, are made from Luxembourg, which from 2015 will be subject to Irish VAT. In addition, Irish consumers receive television broadcasting services from the UK, which will also be subject to Irish and not UK VAT from 2015. The new rules will level the playing field in Europe by removing the incentive for companies to locate in low VAT rate jurisdictions, such as Luxembourg, which should enhance Ireland's attractiveness for e-services companies in particular.
It is estimated that the place of supply changes will lead to a net gain to Ireland in VAT revenues of €100 million in 2015 and 2016, €125 million in 2017 and 2018 and €150 million in 2019 and subsequent years. The VAT estimate is graduated over four years because it was agreed at EU level during negotiations on the place of supply changes to include transitional measures. The agreed transition provides that Member States can retain 30% of the VAT revenues on outward supplies of electronic services in 2015 and 2016; 15% of revenues in 2017 and 2018, after which the full VAT revenue will accrue to the consumer's Member State. The transitional arrangements does not relate to any business, but to the allocation of VAT receipts between the Member States of consumption and supply.
In relation to your query regarding a specific television broadcasting company, it is not possible for me to discuss the tax affairs of individual businesses.
With regard to the impact on the consumer of the place of supply changes, the new arrangement could result in an increase in the cost of services for Irish consumers, where the cost of the VAT change is passed on by the supplier. For example, the VAT charged on broadcasting and electronically supplied services from the UK will increase from the UK standard VAT rate of 20% to the Irish standard VAT rate of 23%, while the VAT on electronic services from Luxembourg will increase from their super-reduced rate of 3% to Ireland's 23% standard rate. However, the cost of the additional VAT may not always be forwarded onto the consumer; where businesses operate an individual pricing system across the EU.
210. Deputy Mattie McGrath asked the Minister for Finance the reasons beneficiaries of changes made to agricultural relief under capital acquisitions tax must spend not less than 50% of their normal working time farming agricultural property; his views that the percentage is arbitrary and unworkable; and if he will make a statement on the matter. [43118/14]
View answerIn my Budget 2014 speech I announced that an Agri-Taxation Review would be undertaken. The review has been carried out and its report was published on Budget Day this year, 14 October. A key objective of the review is to encourage improved productivity in farming. There are concerns that the definition of 'farmer' for the purposes of CAT agricultural relief was not sufficiently robust to ensure that this relief is only being availed of by active, productive farmers. There have also been suggestions that the relief is being used as a tax efficient inter-generational wealth transfer mechanism for non-family farms.
To address these concerns and to encourage improved productivity in farming, changes to CAT agricultural relief were provided for in the Finance Bill 2014 as published. Assuming the other conditions of the relief are satisfied, the changes confine the relief to two categories.
Firstly, the relief will be available to an individual who, for a period of not less than six years, commencing on the valuation date of the gift or inheritance, spends not less than 50% of his or her normal working time farming agricultural property, including the agricultural property comprised in the gift or inheritance, on a commercial basis and with a view to the realisation of profits from that agricultural property.
Secondly, the relief can be available to an individual who leases the whole or substantially the whole of the agricultural property comprised in the gift or inheritance for a period of not less than six years, commencing on the valuation date of the gift or inheritance, to an individual who spends not less than 50% of his or her normal working time farming agricultural property, including the leased agricultural property, on a commercial basis and with a view to the realisation of profits from that agricultural property.
Concerns have been raised with me by various interests about the definition of 'active' farmer for the purpose of the amendments detailed above. I will consider these concerns and see if further amendments to the provisions are warranted on Committee Stage of the Bill.
211. Deputy Thomas P. Broughan asked the Minister for Finance if he will provide a concise yearly breakdown of the promissory note-bond repayment schedule up to 2053 including interest; and if he will make this information available on an annual basis through the Government Publications Office. [43119/14]
View answerAs disclosed at the time of the Promissory Note transaction the Central Bank acquired €25 billion of Floating Rate Notes (FRNs) and €3.46 billion of Government Fixed Coupon 2025 bonds in return for the Promissory Note. The table below sets out the various notes provided, the maturity date for each bond and the nominal amounts outstanding. Full details of the bonds including the offering circulars can be found on the NTMA website at
http://www.ntma.ie/business-areas/funding -and-debt-management/government-bonds/.
|
Note Type |
Spread / Rate |
Maturity |
Nominal |
|
Floating Rate Note |
+268bps |
06/18/53 |
5,034 |
|
Floating Rate Note |
+267bps |
06/18/51 |
5,000 |
|
Floating Rate Note |
+265bps |
06/18/49 |
3,000 |
|
Floating Rate Note |
+262bps |
06/18/47 |
3,000 |
|
Floating Rate Note |
+260bps |
06/18/45 |
3,000 |
|
Floating Rate Note |
+257bps |
06/18/43 |
2,000 |
|
Floating Rate Note |
+253bps |
06/18/41 |
2,000 |
|
Floating Rate Note |
+250bps |
06/18/38 |
2,000 |
|
Fixed Rate - 5.4% |
5.40% |
03/13/25 |
3,461 * |
*As of 06/11/14 total nominal outstanding of the 5.4% 2025 Treasury Bond is €11,745m.
It is not possible to provide a concise annual breakdown of the interest payments associated with the bonds given the floating rate nature of the instruments. The floating rate notes pay a rate of interest calculated by reference to the current 6 month Euribor interest rate plus an agreed Irish spread set out in the table above.
I have been advised by the NTMA that total cash interest payable on the floating rate bonds in 2013 was €638 million. Following the rate reset earlier this year in respect of next months interest payment, total cash interest payable in 2014 will be just over €750 million. The increase in interest payable in 2014 compared to 2013 largely reflects the fact that a full year's interest is payable this year. The estimates of interest payable on the floating rate bonds in the coming years reflect market-based projections for the six-month Euribor interest rate plus the fixed margins. The interest margin averages 2.63% across the eight issues.
212. Deputy Pearse Doherty asked the Minister for Finance the number of Ministers and Ministers of State that have availed of the dual abode allowance in 2013 and 2014. [43123/14]
View answerI am advised by the Revenue Commissioners that to date, ten Ministers and Ministers of State have claimed the dual abode allowance for the year 2013, and five have claimed it for 2014.
213. Deputy Pearse Doherty asked the Minister for Finance the number of shares he owns in Irish Water; and the date and details of any purchase or sale of shares by him. [43124/14]
View answerIrish Water was established as a subsidiary of Bord Gáis Éireann (now Ervia) on 17 July 2013. In accordance with Section 5 of the Water Services Act 2013, on incorporation Irish Water issued one A share to Ervia carrying voting rights but no economic rights to benefit from the activities of Irish Water, and one B share to each of the Minister for Finance and the Minister for the Environment, Community and Local Government which carry no voting rights but full economic rights to benefit from the activities of Irish Water. There has been no change in shareholding since incorporation.
