Written Answers Nos. 209 - 225
213. Deputy Michael McGrath asked the Minister for Finance the implications for Ireland of the European Court of Justice ruling in respect of the levying of air travel tax on transit and transfer passengers; if he has estimated a potential cost to the State; and if he will make a statement on the matter. [46173/14]
View answerThe General Court of the EU has struck down the Commission's decision that the exemption of transfer and transit passengers from the Air Travel Tax did not constitute State aid. This judgement was made on the basis that the Commission's decision was not based on a full and formal investigation.
The Deputy is aware that Ryanair lodged a State aid complaint with the Commission against the Air Travel Tax in 2009 and that subsequently, in July 2011, the Commission found that the use of a lower rate of tax for flights within 300 km of Dublin airport seemed to constitute State Aid. The Commission dismissed Ryanair's claim that the non-application of the Air Travel Tax to transit and transfer passengers constituted a State Aid.
Ryanair appealed the Commission's findings, both in respect of the State Aid decision and the exemption for transit passengers, to the General Court in September 2011. As already outlined, the General Court has now struck down the Commission's decision that the exemption of transfer and transit passengers from the Air Travel Tax did not constitute State aid. This judgement does not come to any conclusion as to whether the exemption constituted state aid. Rather, the judgement was made on the basis that the Commission should have but did not initiate a formal investigation procedure in order to gather the necessary information and to allow all parties to present their observations in connection with that procedure.
The Commission may now conduct a formal investigation or appeal the judgment to the Court of Justice of the European Union. The European Commission has been ordered to bear its own costs and Ryanair costs.
214. Deputy Michael McGrath asked the Minister for Finance his views on recent OECD comments on Ireland’s public finances and that further reforms were needed to increase competition, innovation and make it easier to start and develop a business; and if he will make a statement on the matter. [46174/14]
View answerI note the opinion of the OECD that the revenue gains from higher economic growth should be used to accelerate the reduction of the debt ratio. However, it is important to point out that, when framing a Budget, the Government does not just consider the fiscal position but also has to consider a number of other issues such as social cohesion and the need to safeguard the ongoing economic recovery.
It should be borne in mind that these benefits will be achieved while still meeting our budgetary targets under the Excessive Deficit Procedure (EDP). In fact, we are targeting a deficit of 2.7 per cent of GDP in 2015, inside the 2.9 per cent target. Indeed, I note that the OECD in its analysis of Ireland in the recently-published Economic Outlook is of the view that this EDP objective will be achieved in 2015, as a budget deficit of 2.9 per cent of GDP is projected.
As regards the need for further reforms, I have long said that the burden of the income tax system in Ireland is too high and acts as a disincentive for work and investment. The income tax measures announced in the Budget will reduce the burden on working people while also securing the economic recovery that is under way. As I outlined on Budget day, my Department estimates a three year reform plan along these lines could boost employment by as much as 15,000 jobs when the full impact of the changes has taken effect in the economy. This will underpin the job creation already underway in the economy as evidenced by CSO data released last week which show that more than 80,000 people are at work in Ireland compared with the low point of mid-2012.
This Government recognises the role that structural reforms can play in increasing the capacity of the economy to grow. To this end, the Action Plan for Jobs 2014 contains several actions designed to increase competition and innovation and to support new business formation.
For example, as regards the ease of starting and developing a business, entrepreneurship is one of the "disruptive reforms" included in the Action Plan for 2014. In support of this, I announced a number of measures to support the SME sector in the Budget. These included an increase in the amount of finance that can be raised by a company under the Employment and Investment Incentive to €5 million annually subject to a lifetime maximum of €15 million. I also announced changes to the Foreign Earnings Deduction to support SMEs to grow their businesses abroad. A range of other measures to support entrepreneurs including the roll-out of the Local Employment Offices (LEOs) are outlined in the Action Plan.
The Action Plan also includes a range of actions in the area of innovation, focused on accelerating the economic and societal return on our STI investment, further strengthening enterprise engagement with public research and driving more commercialisation of publicly performed research.
For all the actions planned for 2014 in these areas I refer the Deputy to the Action Plan for Jobs 2014.
215. Deputy Peadar Tóibín asked the Minister for Finance if he will provide in tabular form the total annual number of relevant contract tax registered regarding the construction sector and the number of all other RCTs between 2007 and 2014. [46181/14]
View answer216. Deputy Peadar Tóibín asked the Minister for Finance if he will provide in tabular form the number of instances of fraud and-or non-compliance regarding relevant contract tax investigated by the Revenue Commissioners between 2007 and 2014. [46182/14]
View answerI propose to take Questions Nos. 215 and 216 together.
I have provided the Deputy with the number of sub-contractors registered in the State for Relevant Contracts Tax (RCT) for the years 2010 to 2014 in my reply to Question No. 202 (ref. 45172/14) on 25 November 2014.
I am informed by the Revenue Commissioners that the total number of contractors, i.e. principal and sub-contractors operating within the RCT sector for the years 2007 to 2014 are detailed in the following table.
The electronic Relevant Contracts Tax system went live in 2012 and the information provided from 2012 onwards relates to the number of active principal and sub-contractors who received a payment that falls within the RCT regime. For years prior to 2012, the figures represent the number of active registrations for those years.
The reason for the large variation in the numbers before 2012 is that a significant amount of work was done to update the RCT register upon the introduction of the electronic Relevant Contracts Tax system.
In the time available, I am informed that the Commissioners are not in a position to provide a breakdown of the numbers based on the distribution between the three sectors that are subject to RCT, namely construction, forestry and meat processing.
|
YEAR |
RCT registrations / active contractors (principals and sub-contractors) |
|
2007 |
139,664 |
|
2008 |
126,736 |
|
2009 |
121,982 |
|
2010 |
116,302 |
|
2011 |
107,358 |
|
2012 |
58,855 |
|
2013 |
62,443 |
|
2014 to 16/11/14 |
65,194 |
I am informed by the Revenue Commissioners that businesses have a number of tax obligations including obligations relating to tax returns, the payment of tax on the profits of the business, the VAT system, the PAYE system and, where appropriate, the electronic Relevant Contracts Tax (eRCT) system. In the course of a Revenue compliance intervention, a Revenue officer may investigate matters pertaining to those obligations and, where necessary, seek the relevant outstanding taxes, interest on late payment of tax and relevant penalties.
As to the Deputy's second question, I am further informed by the Revenue Commissioners that the amount of Relevant Contracts Tax (RCT) collected during the tax years 2010 to 2013 (final figures for 2014 not yet available) from Revenue interventions relating to non-compliance with obligations under the RCT legislation was as follows.
|
Year |
Yield |
Number of cases |
|
2007 |
€30,911,015 |
821 |
|
2008 |
€38,293,722 |
922 |
|
2009 |
€32,242,453 |
935 |
|
2010 |
€16,926,470 |
632 |
|
2011 |
€14,283,431 |
472 |
|
2012 |
€11,413,141 |
807 |
|
2013 |
€20,049,285 |
2,399 |
This yield relates to instances of principal contractors being liable to account to Revenue for RCT that should have been deducted from payments made by such principals under relevant contracts.
The downward trends for 2010 and 2011 obviously reflect the state of the construction sector at that time whereas the increase in activity in 2013 reflects Revenue's renewed focus on the construction sector.
If the Deputy has any information as regards tax evasion or abuses of the tax systems, he may pass that information to my officials who will forward it to the Revenue Commissioners.
217. Deputy Eric Byrne asked the Minister for Finance his views on a risk and audit committee report of an organisation (details supplied) specifically part 9, in regard to compliance for the Revenue Commissioners; and if he will make a statement on the matter. [46238/14]
View answerI have referred the material supplied by the Deputy, including part 9, to the Revenue Commissioners for their attention and any appropriate action. The Commissioners have advised me that the details have been noted. As the Deputy will be aware, provisions regarding taxpayer confidentiality preclude them from commenting further in relation to the case concerned.
218. Deputy Robert Dowds asked the Minister for Finance the persons-bodies that approved the decision to purchase a new building for the Central Bank of Ireland for €140 million on the North Docks in Dublin; the reason such a high price was paid for a building; and if he will make a statement on the matter. [46245/14]
View answerUnder section 6B of the Central Bank Act 1942, the Central Bank Commission is responsible for administrating the provision of accommodation and the acquisition and disposal of land by the Central Bank. As Minister for Finance, I have no role in the matter.
As I indicated in a response to a previous Parliamentary Question (written answer No. 39 of 29 January 2014), the Central Bank has confirmed to me that the cost of the purchase of the site at North Wall Quay was €8.1m, including VAT. The Central Bank is not in a position to comment on the estimated total cost of completion of the building as the project is subject to a competitive tendering process.
I have been informed by the Central Bank that it evaluated a range of suitable options including Office of Public Works owned premises, alternative commercial premises and retention of existing premises. The Central Bank is satisfied that the development of the North Wall Quay site is the most cost effective solution for its requirements.
219. Deputy Robert Dowds asked the Minister for Finance the reason Ulster Bank was fined €3.5 million; and if he will make a statement on the matter. [46246/14]
View answerThe Central Bank fined Ulster Bank Ireland Limited €3,500,000 and reprimanded it in relation to IT and governance failings by the firm that resulted in approximately 600,000 customers being deprived of essential and basic banking services over a 28 day period during June and July 2012.
The Central Bank found that the firm failed to have robust governance arrangements in relation to its IT systems and controls and that, as a result, a major and prolonged IT failure occurred. Alongside causing widespread and significant loss and inconvenience to customers, the IT failure also threatened confidence in the operation of the retail banking sector as it effectively prevented the firm from participating in the process used to settle payments among banks ("clearing"). On 13th November Mr. Jim Brown CEO of Ulster Bank appeared before the Joint Committee on Finance, Public Expenditure and Reform at which he said that a total of €59 million was paid to Ulster Bank customers in Ireland. An extensive settlement agreement release is available at www.centralbank.ie.
220. Deputy Derek Nolan asked the Minister for Finance if he will provide an update on proposed legislation pertaining to consumer protection mortgages and the requirement for said mortgages to be regulated by the Central Bank of Ireland; if there is a timeframe proposed for this legislation to be enacted; and if he will make a statement on the matter. [46248/14]
View answerIn order to protect consumers whose loans are sold to unregulated entities the Government is committed to bringing forward appropriate legislation and in July and August of this year the Department of Finance ran a public consultation seeking views on this proposed legislation. There have been nineteen submissions received from a range of respondents including the financial services industry, consumer groups, public representatives, individuals and other stakeholders. The submissions are now accessible on the Department's website:
http://www.finance.gov.ie/what-we-do/banking-financial-services/consultations/responses-public-consultation-process-consumer
Officials in my Department have carefully considered the submissions and are working with the Office of the Attorney General to progress this legislation. My officials will meet with and brief the Joint Committee on Finance and Public Expenditure and Reform about the legislation on 3 December next. It is anticipated that it will be published by the end of this year.
221. Deputy Clare Daly asked the Minister for Finance the reason upper body amputees are excluded from the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994; and the actions he will take to include single arm amputees in new legislation. [46255/14]
View answerThe Disabled Drivers and Disabled Passengers (Tax Concessions) Scheme provides relief from VAT and VRT (up to a certain limit) on the purchase of an adapted car for transport of a person with specific severe and permanent physical disabilities, repayment of excise duty on fuel, and an exemption from Motor Tax.
To qualify for the Scheme, an applicant must have a permanent and severe physical disability within the terms of the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations (S.I. 353 of 1994) and satisfy one of the six qualifying criteria outlined in the Regulations. The Senior Medical Officer for the relevant local Health Service Executive administrative area makes a professional clinical determination as to whether an individual applicant satisfies the medical criteria. A successful applicant is provided with a Primary Medical Certificate, which is required under the Regulations to claim the reliefs provided for in the Regulations. An unsuccessful applicant can appeal the decision of the Senior Medical Officer to the Disabled Drivers Medical Board of Appeal, which makes a new clinical determination in respect of the individual. The Regulations mandate that the Medical Board of Appeal is independent in the exercise of its functions to ensure the integrity of its clinical determinations. After six months a citizen can reapply if there is a deterioration in their condition.
To qualify for the Scheme an applicant must be in possession of a Primary Medical Certificate. To qualify for a Primary Medical Certificate, an applicant must be permanently and severely disabled within the terms of the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994 and satisfy one of the following conditions:
- be wholly or almost wholly without the use of both legs;
- be wholly without the use of one leg and almost wholly without the use of the other leg such that the applicant is severely restricted as to movement of the lower limbs;
- be without both hands or without both arms;
- be without one or both legs;
- be wholly or almost wholly without the use of both hands or arms and wholly or almost wholly without the use of one leg;
- have the medical condition of dwarfism and have serious difficulties of movement of the lower limbs.
The Scheme represents a significant tax expenditure. Between the Vehicle Registration Tax and VAT foregone, and the repayment of excise on fuel used by members of the Scheme, the Scheme represented a cost of €43.5 million to the Exchequer in 2013. This figure does not include the revenue foregone to the Local Government Fund in the respect of the relief from Motor Tax provided to members of the Scheme. In terms of the numbers of beneficiaries of the Scheme in 2013, 4,355 citizens availed of the Vehicle Registration Tax and/or VAT relief, and 11,436 availed of the repayment of excise on fuel element of the Scheme.
The Department of Finance conducted a review of Disabled Drivers and Disabled Passengers Scheme in 1993, which informed the drafting and enactment of the 1994 Regulations. As part of the review, the position of single hand amputees was considered given extensive representations made seeking the inclusion of persons without the use of one arm or hand within the qualifying medical criteria. The review noted that such a disability did not present as serious a challenge to mobility as the extant qualifying criteria, and on that basis, and in the context of limited resources, priority should be given to those citizens with the greatest challenge to their mobility.
Unfortunately, the current context is still one of constrained resources. I recognise the important role that the Scheme plays in expanding the mobility of citizens with disabilities, and I have managed to maintain the relief at current levels throughout the crisis despite the requirement for significant fiscal consolidation. However, in the still challenging fiscal environment and given the scale and scope of the Scheme, I have no plans to expand the medical criteria beyond the six currently provided for in the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994.
222. Deputy Pearse Doherty asked the Minister for Finance if he has received an economic impact analysis on a mortgage guarantee scheme as per the Construction 2020 commitment; and if so, if he will publish the document. [46281/14]
View answerConstruction 2020 is a comprehensive strategy to restore the construction sector to a sustainable position and it sets out a number of action points to increase the supply good quality houses to meet a growing demand. One of the strategy action points provides for an examination of the issue of mortgage insurance and a consideration of how it might assist the provision of adequate and sustainable mortgage finance, on affordable terms, in particular to first time buyers. Work on this issue is ongoing and it has and will continue to benefit from inputs by relevant Departments and bodies.
However, there have also been some recent developments which will now need to be taken into account in the further advancement of this action point. As the Deputy is aware, the Central Bank has published a Consultation Paper on the proposed macro prudential measures in relation to residential mortgage lending which raises the issue of mortgage insurance and asks if some adequately insured mortgages should be exempted from the proposed loan to value (LTV) limitations outlined in the consultation paper.
As a separate initiative to further assist the evaluation and consideration of mortgage insurance, the Deputy and his colleagues on the Oireachtas Committee on Finance and Public Expenditure & Reform are also undertaking an examination of mortgage insurance. This is a very worthwhile and welcome development. The committee is a most qualified and appropriate forum to conduct such an examination and it is particularly well placed to seek and obtain the views of the industry, consumer representatives and other interested parties, and then to evaluate these and to produce a report on this matter. When that report becomes available, it will make a very important contribution to the ongoing public policy consideration of this significant issue.
223. Deputy Clare Daly asked the Minister for Finance the reason a company (details supplied) was provided with a ten year licence by the Irish Financial Regulator despite the regulator having had in its possession evidence of malpractice, a decision which it had to subsequently revoke. [46282/14]
View answerOn the basis of information I have received from the Central Bank of Ireland, I can confirm that the firm to which the Deputy refers was once authorised as a mortgage intermediary but had its authorisation revoked pursuant to Section 116 (11) of the Consumer Credit Act 1995 (as amended) and appears in the Register of Revoked Mortgage Intermediaries maintained pursuant to Section 151A of the Consumer Credit Act 1995 (as amended). The revocation date was 18 June 2009.
Due to the confidentiality requirements imposed by domestic and EU legislation which provides for confidentiality of information and limits disclosure to circumstances specifically provided for in the Central Bank Act 1942, the Central Bank cannot comment on its engagement with specific entities.
224. Deputy Brendan Ryan asked the Minister for Finance if he will provide assurances that homeowners currently living in pyrite damaged homes and who are in the process of, or awaiting to be processed for, remediation through the Pyrite Remediation Board, are entitled to have their local property tax waived, in line with existing legislation, without having to produce a certificate for the laboratory testing of the sub-floor hardcore material which can cost upwards of €2,000; and if he will make a statement on the matter. [46287/14]
View answerThe exemption from Local Property Tax (LPT) based on "significant pyritic damage" has been dealt with in a number of Parliamentary Questions this year, including Questions No. 217 on 18/2/14 (8212/14), No. 121 on 30/4/14 (19698/14), No. 43 on 19/6/14 (26462/14) and No. 14 on 2/10/14 (37016/14).
Section 10A of the Finance (Local Property Tax) Act 2012 (as amended) provides for a temporary exemption of at least three consecutive years from the charge to Local Property Tax (LPT) for residential properties that have been certified under Regulations made by the Minister for the Environment, Community and Local Government (S.I. No. 147 of 2013) as having "significant pyritic damage". These Regulations describe the methodology that must be used when a property is being assessed for pyrite damage.
Unless and until the LPT legislation is changed, Revenue has an obligation to act in accordance with section 10A of the LPT legislation which requires that an LPT exemption can only apply where the residential property has been assessed and a certificate confirming "significant pyritic damage" has been issued. This is the only type of certificate that is relevant and a homeowner cannot claim the exemption until it has been issued.
I am also advised by the Revenue Commissioners that the letter referred to by the Deputy was issued by Revenue in response to an email from the customer requesting clarification on the qualifying conditions for the exemption. The letter clarified that the exemption can only be claimed for the property where the owner has received the relevant certificate confirming "significant pyritic damage" from a competent person such as an engineer. Similar replies have issued to other customers who were querying the qualifying conditions for this exemption.
I confirm that I am aware of the anomaly to which the Deputy refers, and that officials of my Department, together with officials of the Department of Environment, Community and Local Government, are examining the alternatives other than testing that may be available in order to confirm entitlement to a Local Property Tax (LPT) exemption. I am conscious that the issue to which the Deputy refers needs to be addressed and I want to assure the Deputy, and those homeowners affected, that this issue is receiving attention.
I expect to make a decision in the matter shortly that will be consistent with the original objectives of the legislation and the report of the Pyrite Panel, and I will communicate my decision to the Deputy immediately it is made.
It is important that any changes that may be made do not go beyond the objectives of providing a temporary exemption for homes with "significant pyritic damage" only. As I have advised on many occasions in the past, a liability to LPT should apply to all owners of residential property with a limited number of exemptions. Limiting the exemptions available allows the rate of the tax to be kept low for those liable persons who do not qualify for an exemption.
225. Deputy Eoghan Murphy asked the Minister for Finance the actions he has taken to protect businesses and homeowners whose loans were previously in the Irish Bank Resolution Corporation and which have now been transferred to overseas venture funds. [46315/14]
View answerIn relation to mortgage loans previously sold by IBRC, the Special Liquidators sought and received the agreement of bidders and the ultimate purchasers of IBRC mortgage loans to voluntarily comply with the terms of the Code of Conduct on Mortgage Arrears. I understand that these mortgages are currently being serviced in line with those terms.
Furthermore, the Department of Finance has prepared the Sale of Loan Books to Unregulated Third Parties Bill in order to address concerns surrounding the continued applicability of the Code of Conduct on Mortgage Arrears after the sale of loan books to unregulated entities. Detailed engagement with the Attorney General's office and the Central Bank on draft legislation has commenced and in July and August of this year, my Department ran a public consultation seeking views on its proposed legislation to protect consumers whose loans are sold to unregulated entities. The Department of Finance received 18 submissions from a range of respondents from the financial services industry, consumer groups, public representatives and individuals and other stakeholders. Officials in my Department are carefully considering the submissions and it is anticipated that legislation will be published by the end of this year.
The relevant code of conduct that can apply to certain business borrower lender relationships is the Code of Conduct for Business Lending to Small and Medium Enterprises (SME Code). The application of the SME Code varies depending on whether the relevant purchasing entity of the commercial loans is a regulated entity or an unregulated entity. If the purchasing entity is a regulated entity, it is required to comply with the SME Code. If the purchasing entity is not a regulated entity, it is not required to comply with the SME Code.
In terms of context, unlike consumer lending, business lending is not an activity which, in and of itself, must be undertaken by a regulated entity i.e. an unregulated entity could be established for the sole purpose of lending to SMEs and this would not require authorisation, and would not be subject to any legislation or codes.
It is also important to note that the sale of these loans does not change the terms and conditions of the loan agreement in any way. Irrespective of who acquires the loan(s) they will be required to honour the legal terms and conditions of the existing loan agreement(s).
