Thursday, 16 Jul 2015

Written Answers Nos. 136-151

Tax Reliefs Costs

Questions (136)

Michael McGrath

Question:

136. Deputy Michael McGrath asked the Minister for Finance the estimate of the annual cost for 2015 of each tax expenditure on the Statute Book; and if he will make a statement on the matter. [29731/15]

Written answers

Minister for Finance

I am advised by Revenue that a wide range of statistical information is available on the Commissioners' Statistics webpage: http://www.revenue.ie/en/about/statistics/index.html.  

In relation to the Deputy's question, the latest detailed information on the costs of allowances and reliefs can be found under the Tax Expenditures heading at http://www.revenue.ie/en/about/statistics/index.html#section9.  Costs are not yet available in respect of the year 2015 and are only available for 2014 for certain expenditures. Updates will be published in due course.

While these tables do not constitute a full listing of all tax expenditures on the Statute Book, they reflect those for which a costing is readily available.

Corporate Tax Compliance

Questions (137)

Michael McGrath

Question:

137. Deputy Michael McGrath asked the Minister for Finance the amount of tax paid by companies operating in the International Financial Services Centre in Dublin, in 2013 and in 2014; and if he will make a statement on the matter. [29732/15]

Written answers

Minister for Finance

I am informed by Revenue that the total Corporation Tax receipts from the financial and insurance activities sector for the years 2013 and 2014 were around €1,026 million and €1,045 million respectively. The estimated total PAYE and associated USC receipts from this sector were in the region of €1,875 million for 2013 and €2,010 million for 2014.

I am further advised by Revenue that it is not possible to precisely identify the contribution of companies in the Financial Services Centre to this total. There are however some indications of the size of this contribution.

The estimated Corporation Tax paid in 2013 and 2014 by companies previously licensed to operate in the International Financial Services Centre (IFSC) is of the order of €497 million and €545 million respectively. It should be noted that these figures relate only to those companies that were once licensed under the preferential IFSC tax regime, which expired in 2005, and for which registrations ceased in 2002. The estimated total PAYE and USC receipts associated with these companies for 2013, the latest year available, is in excess of €415 million. The PAYE and USC receipts associated with these companies for 2014 is not yet available.

Separately, based on Revenue analysis of more recent Central Bank information on companies currently operating in the international financial services area, these companies are estimated to have paid around €621 million in Corporation Tax in 2013 (the most recent tax year for which data are available). The associated amount of PAYE and USC is tentatively estimated to be in the region of €332 million. These estimates are tentative and should be considered as provisional, as they may be revised subject to improved information becoming available.

General Government Debt

Questions (138)

Michael McGrath

Question:

138. Deputy Michael McGrath asked the Minister for Finance the change in the general Government debt from December 2007 to December 2014; how this is broken down between the building up of cash balances, paying for Government goods and services, and recapitalisations of the banks; and if he will make a statement on the matter. [29733/15]

Written answers

Minister for Finance

General government debt has increased by approximately €156.2bn from a debt level of €47.1bn in 2007 to €203.3bn as at December 2014.

The Deputy should note that borrowing is not undertaken for any specific purpose but rather as the requirements for cash-flow occur.

Total cash and other financial asset balances as reported by the NTMA which were included in the composition of debt were €4.5bn in 2007 and €14.8bn in 2014.

The headline deficit for the period was approximately €144.4bn.  This is made up of the excess of day to day expenditure over revenue, slightly over €97bn and the balance relates to one-off transactions, including transfers to the banking sector.

No specific borrowing was undertaken in order to fund the recapitalisation of Irish banks and therefore it is not possible to quantify the precise impact to government debt. However, as mentioned in the 'Spring Economic Statement 2015' over €64bn was used to recapitalise the banks. As some payments to the banking sector were directed investments via the NPRF and did not require borrowing, there were no debt implications associated with these payments. Through the sale of investments in BOI and PTSB and the sale of Irish Life, circa €5.0bn has been returned to the State in addition to €5.9bn in interest and fees across all the banks up to 31 December 2014.  In addition, the significant progress in the liquidation of IBRC, which was classified within the area of general government as a result of ESA 2010, has reduced its effect on general government debt.

It should be noted that in addition to these transactions there are also minor adjustments in the areas of other government bodies, local government, and statistical classification issues.

Tax Reliefs Data

Questions (139)

Michael McGrath

Question:

139. Deputy Michael McGrath asked the Minister for Finance the approximate number of litres of agricultural diesel, which qualified for tax relief, sold in each of the past three years; the approximate number of litres of fully duty paid auto diesel and petrol sold in the same period; and if he will make a statement on the matter. [29735/15]

Written answers

Minister for Finance

The quantities of Petrol, Auto Diesel and Marked Gas Oil (MGO) tax paid in the State  in  each of the years 2012 2014 is as follows:

-	MGO ('000 litres)	Auto Diesel ('000 litres)	Petrol ('000 litres)
2012	1,125,849	2,548,025	1,667,582
2013	1,101,590	2,676,358	1,568,147
2014	997,528	2,846,887	1,483,192

MGO, which is commonly referred to as agricultural diesel, is used in a variety of off-road applications and benefits from a relief by way of a reduced rate of mineral oil tax on gas oil. These uses extend well beyond agriculture to include the propulsion of trains, the operation of construction and industrial machinery, commercial sea navigation (including fishing) and commercial and home heating. Separate statistics in respect of Marked Gas Oil (MGO) used for agricultural purposes are not available.

State Debt

Questions (140)

Michael McGrath

Question:

140. Deputy Michael McGrath asked the Minister for Finance his estimate of the current structural deficit; and if he will make a statement on the matter. [29736/15]

Written answers

Minister for Finance

The most recent estimate of the structural deficit was contained in the Stability Programme Update (SPU) published in April.  The estimate for 2015, using the required harmonised methodology, is a structural deficit of 2.6% of GDP.  An updated estimate of the structural balance will be contained in Budget 2016. 

Financial Services Regulation

Questions (141)

Michael McGrath

Question:

141. Deputy Michael McGrath asked the Minister for Finance the status of the reports completed by McCann FitzGerald and Ernst & Young into certain corporate governance matters at the former Irish Nationwide Building Society; if the reports have been referred to An Garda Síochána and to the Office of the Director of Corporate Enforcement; the action being taken as a result of the content of the reports; and if he will make a statement on the matter. [29738/15]

Written answers

Minister for Finance

As previously outlined to the Deputy, I am aware of a number of reports that have been produced by third parties in relation to matters arising from the banking crisis which remain unpublished at this time including those produced by McCann Fitzgerald and Ernst and Young (which were commissioned by the former Board of INBS) in relation to governance matters in the former Irish Nationwide Building Society.

I have been advised that given the on-going nature of the investigations by the Authorities, including in particular the investigation which was conducted by the Central Bank of Ireland (the Central Bank) under its Administrative Sanctions Procedure, into historic lending practices at INBS, to which an inquiry by the Central Bank will be established, the reports cannot legally be published at this time. Publication of the reports may be considered when those proceedings are concluded or when any Garda investigation has been finalised (or any proceedings arising from such investigation are concluded).

Credit Unions

Questions (142)

Michael McGrath

Question:

142. Deputy Michael McGrath asked the Minister for Finance if he is satisfied with the manner in which the acquisition of a credit union (details supplied) by Permanent TSB has proceeded; if he expects an additional liability to the State to arise in respect of the credit union; and if he will make a statement on the matter. [29739/15]

Written answers

Minister for Finance

On November 2013, on foot of a request from the Governor of the Central Bank, I agreed to the payment to Permanent tsb (PTSB) of a financial incentive to support the transfer of Newbridge Credit Union Ltd (NCU), excluding its premises.

The maximum amount of financial incentive is €53.9 million, comprising:

- €23 million in cash up-front - paid in full.

- €4.25 million for restructuring and integration costs incurred by PTSB as part of the transaction - of which €2.5 million has been paid.

- €2 million for any liabilities transferred to PTSB that were not represented on NCU's balance sheet at the date of transfer - of which €0.3 million has been paid.

- a maximum additional €24.7 million to cover 50% of any impairment made on the loan book to bring its net value below €49.3 million. Equally, the Credit Institutions Resolution Fund is entitled to recoup 50% of any recoveries made on the loan book - there has been no loss compensation made to date.

In total, €25.8 million has been paid to date in financial incentive support in relation to the transfer of NCU to PTSB. 

In accordance with Section 46(6) of the Central Bank and Credit Institutions (Resolution) Act 2011, once the sale of NCU's building has completed, the proceeds from the sale (net of transaction and liquidator costs) will be remitted to the Credit Institutions Resolution Fund.  Under the Act, the Credit Institutions Resolution Fund is the principal creditor of NCU in the amount of financial incentive paid or payable to PTSB.

National Treasury Management Agency

Questions (143)

Michael McGrath

Question:

143. Deputy Michael McGrath asked the Minister for Finance the overall amount of money managed by the National Treasury Management Agency through the various State savings products; if he will provide a breakdown of the overall amount by the type of product, savings bonds, savings certificates, national solidarity bonds, etc; the way the money is managed; and if he will make a statement on the matter. [29740/15]

Written answers

Minister for Finance

State Savings is the brand name used by the National Treasury Management Agency (NTMA) to describe the range of Government savings products offered by the NTMA to personal savers. State Savings form part of Ireland's debt, the repayment of which is a direct, unconditional obligation of the State.

The NTMA has advised that the total value of State Savings at end-June 2015 is €19.3 billion and the breakdown by product is as follows:

-	€m
Savings Bonds	4,798
Savings Certificates	5,980
Instalment Savings (including Savings Stamps)	480
National Solidarity Bonds	2,965
Deposit Accounts	2,724
Prize Bonds	2,323
TOTAL	19,270

Note: The figures in the table are unaudited.

Tax Compliance

Questions (144)

Michael McGrath

Question:

144. Deputy Michael McGrath asked the Minister for Finance the general Revenue compliance initiatives that are under way; and if he will make a statement on the matter. [29741/15]

Written answers

Minister for Finance

Maximising voluntary tax and duty compliance is a key objective for Revenue. Providing a high quality efficient and cost effective service to taxpayers and their agents to facilitate voluntary compliance is an important priority for Revenue in that regard.

Allied to the quality service approach is a clear focus on addressing non-compliance in all its forms.  Sophisticated risk assessment and intelligence gathering systems are deployed by Revenue to target interventions for optimum impact. Cases at risk of non-compliance are identified through the use of enhanced third party information such as supply chain data on fuel oil movements, merchant acquirer data on credit and debit card transactions and Government Payments data.

Revenue devotes considerable resources to and prioritises the deployment of skilled and trained staff to its broad range of compliance management and case intervention programmes aimed at counteracting evasion in all its forms. Revenue's risk based compliance interventions are intended to maximise tax recoveries from the non-compliant and prosecute those involved in serious tax, duty and customs fraud and evasion.

I am advised by Revenue that the compliance activities undertaken include debt management and collection, returns compliance, anti-smuggling operations, risk-based and random compliance interventions, border control checks, a focus on aggressive tax and duty avoidance schemes as well as work to combat shadow economy activities that includes collaboration and joint investigations with other Government Departments and agencies. 

Revenue's Annual Report for 2014, which is available on the Revenue website at the following link http://www.revenue.ie/en/about/publications/annual-reports.html will provide the Deputy with some very helpful information on the of the breadth of Revenue's compliance management programme and interventions including detailed information on the numbers and scope of compliance interventions and the outcomes obtained.

As part of a major overhaul of Ireland's anti-avoidance legislation in the Finance Act 2014, a settlement opportunity was made available to taxpayers who entered into tax avoidance transactions before 24 October 2014. To take advantage of this opportunity, taxpayers were required to make a Qualifying Avoidance Disclosure, pay the tax avoided and 80% of the interest due on that tax, by 30 June 2015. A total of 137 cases yielding €43.7 million (including tax and interest) had availed of the opportunity to regularise their tax affairs. This is a provisional figure subject to the Revenue Commissioners' verification that the requirements of the Qualifying Avoidance Disclosure have been met. Revenue will actively pursue those taxpayers who failed to take advantage of this settlement opportunity and will seek tax, interest, surcharges, penalties and other sanctions, as appropriate, in such cases.

NAMA Debtors

Questions (145)

Michael McGrath

Question:

145. Deputy Michael McGrath asked the Minister for Finance the number of asset transfers to family members by debtors of the National Asset Management Agency that have been reversed; the total value involved; and if he will make a statement on the matter. [29742/15]

Written answers

Minister for Finance

I am advised by NAMA that it has obtained additional security over assets with an aggregate value in excess of €800m through a combination of the reversal of asset transfers and additional security over previously unencumbered assets. Approximately 25% of additional security by value has been obtained as a result of the reversal of asset transfers.

I am further advised by NAMA that the above figure is in line with NAMA's original estimate. In its Annual Report and Financial Statements for 2012, page 25, NAMA stated that it expected to obtain security over assets with a value of approximately €750m after its negotiations with debtors were completed.

Question No. 146 answered with Question No. 134.

NAMA Property Rental

Questions (147)

Michael McGrath

Question:

147. Deputy Michael McGrath asked the Minister for Finance the number of rent reductions that have been approved by the National Asset Management Agency; the number of applications outstanding at present; and if he will make a statement on the matter. [29744/15]

Written answers

Minister for Finance

I am advised by NAMA that it has received 411 eligible applications for rent abatement, through its debtors and receivers, under its Guidance Note on Upwards Only Rent Reviews, and that, of these, 360 have been approved and a further 39 are currently being assessed. Furthermore, I am advised that just 12 of the 411 eligible applications have been refused.

Government Bonds

Questions (148)

Michael McGrath

Question:

148. Deputy Michael McGrath asked the Minister for Finance the take-up to date of sovereign annuity bonds by the pension industry; and if he will make a statement on the matter. [29745/15]

Written answers

Minister for Finance

Irish Amortising Bonds were launched in 2012 in response to demand from the Irish domestic pensions industry. The National Treasury Management Agency (NTMA) has advised that, as at end-June 2015, that €1.1 billion of Irish Amortising Bonds had been taken up. The NTMA is available to respond to further demand for such bonds as it arises.

National Pensions Reserve Fund Investments

Questions (149)

Michael McGrath

Question:

149. Deputy Michael McGrath asked the Minister for Finance the value of the discretionary portfolio, including cash balances, held by the National Pensions Reserve Fund; when he expects the portfolio to be liquidated; and if he will make a statement on the matter. [29746/15]

Written answers

Minister for Finance

Following the commencement of the relevant section of the National Treasury Management Agency (Amendment) Act 2014 on 22 December 2014 the assets of the National Pensions Reserve Fund (NPRF) became the assets of the Ireland Strategic Investment Fund (ISIF).

The National Treasury Management Agency (NTMA) has advised that €7.146 billion represents both the final valuation of the Discretionary Portfolio at the termination of the NPRF's investment mandate and the opening valuation of the ISIF's Discretionary Portfolio. Cash & Cash Equivalents amounted to €2.423 billion or 34% of the value of the Discretionary Portfolio. The most recently published value of the ISIF's Discretionary Portfolio is €7.407 billion as at 31 March 2015. This includes Cash balances of €2.316 billion.

The ISIF recently published its Investment Strategy which outlines the transition from the National Pensions Reserve Fund global assets over a 3-5 year period to a Fund focused exclusively on Ireland, subject to commercial investment opportunities being available.

http://www.ntma.ie/business-areas/ireland-strategic-investment-fund/.

State Claims Agency

Questions (150)

Michael McGrath

Question:

150. Deputy Michael McGrath asked the Minister for Finance his views on the operation of the State Claims Agency, its success in limiting costs arising from personal injury and property damage claims against the State; and if he will make a statement on the matter. [29747/15]

Written answers

Minister for Finance

The State Claims Agency's (SCA) claims management objective is to manage claims efficiently and conscientiously. This has the following practical implications:

- In cases where the State is considered liable or which involve an apportionment of liability, the SCA's approach is to settle such claims expeditiously, in so far as it is possible to do so, and on fair and reasonable terms; and

- In cases where liability is fully disputed by the State, all necessary resources are applied in the defence of such claims.

The SCA manages claims from their initial notification through to final resolution. Claims are investigated in a thorough and timely fashion, in order to facilitate early decision-making in relation to liability and strategy.

Recoveries and Costs Saving Initiatives

The SCA has advised that it vigorously pursues all available money recoveries in accordance with best claim practices and as permitted by law. One such example is the recovery of moneys by means of third party/co-defendant contributions. Whether by adjudication of the court or agreement with the third party/co-defendant, a specified percentage contribution in relation to a particular claim may be paid by a third party/co-defendant to the SCA. Additionally, in certain cases, an indemnity in full may be received from a third party/co-defendant.

Recoveries and Third Party Contributions by Year Transacted

-	2010	2011	2012	2013	2014
Total Recoveries	€6.1m	€15.1m	€3.8m	€1.8m	€2.8m

The level of legal costs paid to plaintiffs' legal representatives is carefully examined and, wherever possible and by means of negotiations, the SCA seeks to achieve the maximum possible reduction in legal costs. If the SCA cannot successfully agree the level of legal costs to be paid to plaintiffs' legal representatives, the matter is determined by a Taxing Master.  

The following table sets out, by calendar year, the legal cost savings achieved by the SCA for the individual years:

Negotiated Legal Cost Savings by year claim finalised

-	2010	2011	2012	2013	2014
Total Negotiated Savings	€5.7m	€6.6m	€7.8m	€8.6m	€10m

The SCA has advised that it has, in an initiative designed to reduce barristers' fees, invited barristers to tender competitively for its services and barristers' panels were put in place in January 2014. During 2014, this initiative yielded legal costs savings of 22 per cent. A similar initiative was conducted to reduce the SCA's panels' solicitor fees in June 2011 which yielded savings in respect of solicitor fees, in 2014, of 19%.

Alongside the SCA's cost saving initiatives, its Risk Management unit assists and advises State Authorities and Healthcare enterprises on measures to be taken to prevent the occurrence, or to reduce the incidence, of acts or omissions that may give rise to personal injury, property damage or medical negligence adverse events that could subsequently result in claims.

These examples illustrate the proactive and successful actions of the State Claims Agency to limit costs and claims against the State.  I am confident that the recently established Board of the National Treasury Management Agency will fulfil its role of supporting and driving the SCA in making further savings for the State.

IMF Loan

Questions (151)

Michael McGrath

Question:

151. Deputy Michael McGrath asked the Minister for Finance the funding commitment to the International Monetary Fund; and if he will make a statement on the matter. [29748/15]

Written answers

Minister for Finance

The International Monetary Fund (IMF) is a Quota-based institution. Each member is assigned a Quota, broadly based on its size relative to the world economy. A member's Quota determines its maximum financial commitment to the IMF, as well as its voting power, and has a bearing on its access to IMF financing. Quotas are denominated in Special Drawing Rights (SDRs), the IMF's unit of account. This is based on a weighted mix of the following major world currencies: US Dollars, the Euro, the Japanese Yen and the UK Pound Sterling. Ireland's IMF quota is currently SDR 1,257.6 million, or 0.528% of the total Quota share of the IMF. This has been the case since 4 March, 2011, when the 2008 Quota Review came into force. At 31 December, 2014, the amount of SDR 1,257.6 million was made up of SDR 998,897,520 held in Ireland's IMF General Resources Account and a further SDR 258,702,480 which is held in Ireland's Reserve Tranche Position at the IMF. In addition to Quota, Ireland has committed other funding via a separate process to the IMF known as SDR holdings. SDR holdings were put in place by agreement of the members of the IMF predominantly in order to ensure that the IMF had sufficient resources to tackle the recent Global Financial Crisis. Ireland has committed SDR 775.4 million in SDR holdings to the IMF as at 31 December, 2014.

In summary, Ireland's funds committed as at 31 December, 2014 to the IMF is represented by SDR 1,257.6 million in Quota and SDR 775.4 million in SDR holdings for a total of SDR 2,033 million. At the most recent exchange rates available (14 July, 2015) that equates to approximately €2,578 million.