Written Answers Nos. 73-80
73. Deputy Joanna Tuffy asked the Minister for Finance the amount in capital taxes that have been raised and the amount of DIRT tax since March 2011; the amount of this, in tabular form, that is due to budgetary changes brought in by the current Government; and if he will make a statement on the matter. [45675/14]
View answerI assume that the Deputy is referring to Capital Gains Tax and Capital Acquisition Tax.
I am informed by the Revenue Commissioners that receipts of those taxes and DIRT for March to December 2011 are as set out in the following table.
|
Year |
Capital Gains Tax |
Capital Acquisitions Tax |
Deposit Interest Rate Tax |
|
€m |
€m |
€m |
|
|
2011 (from March) |
354 |
227 |
359 |
I am further informed by the Revenue Commissioners that net receipts for 2012 to 2013 are published on the Commissioners' Statistics webpage at http://www.revenue.ie/en/about/statistics/index.html. Updates to these statistics, including receipts for 2014 once finalised, will be published in due course.
The amount of these receipts associated with budgetary changes brought in by the current government is not separately identifiable.
74. Deputy Seán Kyne asked the Minister for Finance if consideration is or will be given, as a mechanism for reducing taxation and giving back to taxpayers, to returning all or portions of the pension levy, which was introduced to fund job creation initiatives, particularly in the context of the improving financial and economic position of the State; and if he will make a statement on the matter. [45701/14]
View answerThe original 0.6% Pension Fund Levy introduced to fund the Jobs Initiative in 2011 ended this year. The additional levy on pension funds at 0.15% which I introduced for 2014 and 2015 mainly to help continue to fund Jobs Initiative will also end after next year.
The position is that the equivalent value of all of the money raised from the stamp duty levy has been used to fund the wide range of measures introduced in the Jobs Initiative to protect existing jobs and create new jobs. These include expenditure measures such as the Jobbridge and the Springboard schemes, as well as a number of tax and PRSI incentives such as the reduction in the VAT rate from 13.5% to 9% for the tourism and hospitality sectors and the halving of the lower employer PRSI rate.
The reduced VAT rate of 9% on tourism and certain other services was one of the very significant and successful measures introduced by the Jobs Initiative. It was due to end in 2013. In my Budget 2014 speech I announced the continuation of the reduced 9% VAT rate. I also announced that the Air Travel Tax is being reduced to zero with effect from 1 April 2014. The 9% VAT rate has helped to create thousands of new jobs as well as protecting existing jobs. Since the Budget announcement about the reduction in the Air Travel Tax, airlines have announced the opening up of new routes resulting in significant increases in passenger numbers with the associated increase in tourism activity and employment.
While the pension fund levies have ceased and will be ceased as I have already outlined, I have no plans to repay some or all of the pension fund levy tax collected as proposed in the question. The value of the funds raised by way of the levy have been used to protect and create jobs and this has helped to create the improving financial and economic position of the State to which the Deputy refers. Taxpayers to whom the impact of the levy may have been passed on by the chargeable persons for the levy (pension scheme trustees and other persons with responsibility for the management of pension scheme or pension plan assets) will benefit from the changes which I began in Budget 2015 and which will continue in future Budgets to reduce the income tax burden on low and middle income earners. It is in this prospective way that the benefits of an improving fiscal and economic position are usually passed on.
75. Deputy Joanna Tuffy asked the Minister for Finance if he will provide an update on Ireland's placing compared with other OECD countries in respect of the progressiveness of the income tax system; Ireland's place for each of the past ten years in terms of which countries had the most progressive systems; if budget 2015 will ensure that Ireland continues to have a highly progressive income tax system; and if he will make a statement on the matter. [45730/14]
View answerAs the Deputy will be aware, a progressive taxation system means that those on higher incomes pay proportionately higher rates of tax on their income than those on lower incomes.
The European Commission compares progressivity of taxation by taking the OECD tax wedge for an individual earning 167% of the average wage and dividing it by the tax wedge for an individual earning 67% of the average wage. On a rating system where less than 100 is regressive and above 100 is progressive, most EU countries have a progressivity rate of between 120 and 140. Ireland, in comparison, has a progressivity rate of 183 for 2013, the latest year for which data is available. This is considerably more progressive than any other EU member of the OECD, and the second most progressive overall. OECD tax data is not readily available for years prior to 2005. Nonetheless, Ireland has had either the most or second most progressive income tax system among OECD member states since 2005. Ireland's progressivity relative to the other OECD member states for this period is set out in the table.
Income Tax Progressivity relative to other OECD States 2005-2013
|
Ireland |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
|
Position |
2nd |
1st |
1st |
1st |
1st |
1st |
2nd |
2nd |
2nd |
A fair, efficient and competitive income tax system is essential for economic growth and job creation. I have long said that the burden of the income tax system in Ireland is too high and that I would seek to reduce it as soon as it was prudent to do so. The income tax measures introduced in Budget 2015 are the first stage of a three-year plan to progressively reduce the marginal tax rate on low and middle income earners in a manner that maintains the highly progressive nature of the Irish tax system.
All those who currently pay income tax and or USC will see a reduction in their tax bill in 2015.
76. Deputy Michael McGrath asked the Minister for Finance his views on the opinion expressed by a member of the Irish Fiscal Advisory Council (details supplied) that up to half of the growth in GDP in 2014 may be attributable to contract manufacturing; and if he will make a statement on the matter. [45757/14]
View answerI am aware of the phenomenon of 'contract manufacturing'. Indeed, the economic review and outlook that accompanied Budget 2015 contained a detailed explanation of the issue (http://www.budget.gov.ie/Budgets/2015/Documents/141014%20Economic%20and%20Fiscal%20Outlook%20REV%202.pdf).
Exports grew by 13.0 per cent year-on-year in the second quarter of this year, with goods exports up nearly 16 per cent. This was not matched by proportionate import growth, despite the growth in domestic demand in the same period. As a result net exports increased by 11.0 per cent year-on-year in the second quarter to stand at €11.2 billion, or 24 per cent of GDP.
Part of the strong performance in goods exports can be put down to what is known as contracted manufacturing'. This contracted production occurs when an Irish-resident (though not necessarily Irish-owned) enterprise contracts a plant abroad to produce a good for supply to a third country. The sale of the good is recorded as an Irish export as the economic ownership of the good prior to sale is regarded as belonging to the Irish-resident enterprise. Imports used in the production process are also recorded as Irish imports. Neither these exports nor imports associated with contracted production are recorded in the monthly trade series which is based on measurement of when goods physically cross the Irish border.
The difference between national accounts-based and trade-based measures of exports and imports are known as national accounts adjustments. In the three years to 2013 national accounts export and import adjustments have largely offset each other. This relationship appears to have broken down in the first half of 2014. The export adjustment has increased considerably more than the import adjustment and is believed to be associated with a sharp increase in contracted production, adding significantly to the contribution of net exports to GDP growth. However, other adjustments (such as the correction for carriage costs of imports) are also made. It is important to stress that the contribution of contracted production to growth cannot be calculated with precision with the publically available data to hand.
Contracted production involves very little employment effect or second-round impact on the wider economy and complicates the task of forecasting net exports. Developments in contract production are sector-specific and product-specific and have little relationship with concurrent indicators of export performance. As such, they have the potential to unwind or accelerate with potentially large impacts on measured GDP.
Notwithstanding these developments, there is no doubt that economic recovery has gained momentum this year and that it has broadened to include a recovery in domestic demand. High-frequency data such as retail sales, industrial production and purchasing managers' indices (PMIs) are all in strong positive territory. Employment growth resumed in 2012 and the Live Register continues to fall month-on-month. This recovery has manifested itself in tax revenues which are expected to come in €1 billion (or 2.5%) above original expectations.
77. Deputy Michael McGrath asked the Minister for Public Expenditure and Reform further to Parliamentary Question No. 21 of 20 November 2014, the reason the cost of the water conservation grant is estimated at €130 million in view of the fact that Irish Water has issued 1.5 million application packs and non-Irish Water customers will also be eligible for receipt of the payment; and if he will make a statement on the matter. [45571/14]
View answerThe Water Conservation Grant is to be paid to registered householders annually in respect of their primary dwellings whether they are customers of Irish Water or not. I understand that Irish Water issued some 2 million registration packs to all households in the State. There are approximately 1.65m primary residences in the State which would require a potential allocation of €165m.
The grant will be paid for the first time in 2015. The estimated cost of €130m was based on the assumption that not all households would apply for the grant in the first year. For 2016, it was estimated that the cost could increase to €150m. In the event that there is a higher number of applications for the grant than covered by the estimated amount of €130m, any additional cost will be provided by the Exchequer as part of the normal Estimates process.
78. Deputy Joanna Tuffy asked the Minister for Public Expenditure and Reform the amount that has been raised by the levy on public service pensions since its introduction; and if he will make a statement on the matter. [45676/14]
View answerI refer to my reply of 18 November 2014 to Parliamentary Question Number 194. The position remains unchanged.
79. Deputy Peadar Tóibín asked the Minister for Jobs, Enterprise and Innovation if he will seek a debate with the necessary approval of Dáil Éireann for the free trade agreement between the European Union and Colombia before the Christmas recess. [45577/14]
View answerThe Free Trade Agreement between the European Union and its Member States and the Republic of Colombia and the Republic of Peru, is an Agreement within the meaning of Article 29.5.2 of the Constitution. Ratification by Ireland is therefore subject to prior approval of Dáil Éireann. It is my intention to seek the necessary approval of Dáil Éireann before the end of this year.
80. Deputy Denis Naughten asked the Minister for Jobs, Enterprise and Innovation the progress made to date in attracting alternative employers to take over the employment contracts of a company's staff (details supplied) in County Leitrim who are set to lose their jobs in the coming weeks; and if he will make a statement on the matter. [45614/14]
View answerA series of actions are being implemented by local and national agencies to source an alternative employer and find alternative employment for those impacted by the MBNA announcement.
An inter-agency group, led by Enterprise Ireland, has been formed and its membership includes representatives of all the relevant State players. This Group is providing a coordinated approach to the needs of the affected staff and ensuring that all necessary steps are put in train to pursue an alternative investor.
A series of additional developments have also taken place:
- Details of the staff skills and the capabilities of the facility have been collated,
- IDA, along with MBNA/Bank of America has produced a marketing pack for potential investors.
- The global IDA team continues to market the MBNA facility to a range of potential investors through its network.
- Enterprise Ireland is marketing the facility to its client base.
- There have been a small number of preliminary enquiries about the facility, both from foreign owned and Irish owned businesses but it is too early in the process to be specific about their potential.
The work of the inter-agency group will continue and IDA and Enterprise Ireland will work to market the MBNA facility to a range of potential investors and to respond to requests for information from potential interested parties.
