Written Answers Nos. 152-170
152. Deputy Michael McGrath asked the Minister for Finance the process, and estimated timeline, for each of the stages involved in the preparation of budget 2016; and if he will make a statement on the matter. [29749/15]
View answerBudgetary preparation is a "whole-year" process and work has already commenced for Budget 2016. As part of its reform of the budgetary process, the Government this year published the Spring Economic Statement and established the National Economic Dialogue.
The Spring Economic Statement sets out the emerging economic and fiscal situation and the Government's medium-term fiscal strategy. The Statement draws on my Department's macroeconomic and fiscal forecasts as set out in the Stability Programme Update (SPU). In line with the arrangements introduced under the EU semester, the SPU was prepared and submitted to the European Commission last April.
The objective of the National Economic Dialogue, which will take place on 16-17 July, is to facilitate an open and inclusive exchange on the competing economic and social priorities facing the Government as we prepare for Budget 2016. A key aspect of the National Economic Dialogue will involve a public call for pre-budgetary submissions that will have regard to the issues arising in the Dialogue.
In the autumn, the Department of Finance will prepare tax policy papers, to be discussed in early September as part of the Tax Strategy Group process. These will feed into the tax measures considered as part of Budget 2016.
Both myself and my colleague Brendan Howlin, as the Minister for Public Expenditure and Reform, will work very closely in the compilation of Budget 2016. With regard to the expenditure allocations, the Estimates process is ongoing and will be published on Budget day.
As is the norm, the macroeconomic forecasts which underpin the Budget will be subject to endorsement by the Irish Fiscal Advisory Council (IFAC) in advance of publication. The endorsement process will begin soon after the publication of Q2 National Accounts data by the CSO in September. The timelines for this process are laid out in a Memorandum of Understanding between the Fiscal Advisory Council and the Department of Finance, which are available on both websites. Based on these macroeconomic projections, my Department will produce the fiscal and budgetary forecasts, taking into account the end-September Exchequer returns and any policy decisions made as part of Budget 2016.
In advance of each Budget, normally the Friday before publication, the White Paper on the Estimates of Receipts and Expenditure is published. As the Deputy will be aware, the White Paper sets out an Exchequer forecast for the forthcoming year based on a position of no policy change.
Budget 2016 will be published in conjunction with the publication of the Expenditure Report by my colleague, the Minister for Public Expenditure and Reform, Mr Brendan Howlin TD. The date for publication of Budget 2016 has yet to be confirmed, but will be no later than 15 October.
After publication of our national Budget, in line with European economic governance rules, a Draft Budgetary Plan for the forthcoming year is submitted to the European Commission, again, not later than 15 October.
The Finance Bill will be published shortly afterwards, to be enacted by 31st December. The publication of the Revised Estimates Volume is a matter for Minister Howlin, but will be published before the end of the year.
154. Deputy Michael McGrath asked the Minister for Finance the amount of vendor finance that has been provided by the National Asset Management Agency in 2015 to date; the number of projects financed; the number of housing units that will be provided by these projects; and if he will make a statement on the matter. [29752/15]
View answerI am advised by NAMA that it has to date advanced €373m in vendor finance across six transactions involving the sale of commercial property securing its loans. These transactions have involved the sale of completed office and retail accommodation and therefore the Deputy's reference to housing units does not arise.
As previously advised by NAMA, a number of positive market developments in the past year or so mean that vendor finance is not currently required as part of its market offering. These developments include the prevalence of international investors and international debt providers with ready access to capital, the introduction of Irish REITs as an alternative investment mechanism and a gradual increase in domestic bank lending to property. Vendor Finance was introduced by NAMA in 2012 in a very different market and financing context and was one of a range of measures introduced by NAMA to encourage investment in Irish property at a time when there were few transactions in the market and when there was limited finance available.
155. Deputy Michael McGrath asked the Minister for Finance if he will provide, in tabular form, the number of persons or mortgage accounts in receipt of tax relief at source, in each year from 2010 to 2014 and in 2015 to date; the projected cost of the scheme this year; and if he will make a statement on the matter. [29755/15]
View answer159. Deputy Michael McGrath asked the Minister for Finance the cost of increasing the rate of tax relief at source that applies in 2015 to 40% and 50% respectively from 30%, for those who took out a qualifying loan between 2004 and 2008; and if he will make a statement on the matter. [29769/15]
View answer160. Deputy Michael McGrath asked the Minister for Finance the cost of increasing the ceiling in 2015 of €3,000 interest for tax relief at source for those who took out a qualifying loan between 2004 and 2008, to €4,000 and €5,000 respectively; and if he will make a statement on the matter. [29770/15]
View answerI propose to take Questions Nos. 155, 159 and 160 together.
I am informed by Revenue that the number of mortgage accounts in receipt of tax relief at source in respect of mortgage interest in each year from 2010 to 2015 (to date), is as set out in the following table. The projected cost of mortgage interest relief in 2015 is estimated to be in the order of €275 million.
|
Year |
Number of Mortgage Accounts |
|
2010 |
349,500 |
|
2011 |
352,800 |
|
2012 |
355,400 |
|
2013 |
351,200 |
|
2014 |
331,200 |
|
2015 (to date) |
323,500 |
The cost of increasing the rate of tax relief at source that applies in 2015 to 40% and 50%, for those that took out a qualifying loan between 2004 and 2008, is tentatively estimated at €49m and €98m per annum respectively.
Finally, I am further informed by Revenue that the cost of increasing the ceiling in 2015 of €3,000 interest for tax relief at source, for those that took out a qualifying loan between 2004 and 2008, to €4,000 and €5,000 is tentatively estimated at €22m and €38m per annum respectively. These estimates take into account commensurate increases in the €6,000 ceiling applicable to married couples and civil partners.
156. Deputy Michael McGrath asked the Minister for Finance the taxation provisions in legislation that are due to expire at the end of 2015; and if he will make a statement on the matter. [29764/15]
View answerThe Deputy previously asked this question on 12 February this year, Parliamentary Question No. 87 (PQ 6542/15) and in my reply of 12 February, I set out the legislative provisions that are due to expire on 31 December 2015. There have been no changes since my earlier reply.
The following provisions are due to expire at the end of 2015:
|
Legislative Provision |
Brief Description |
|
Section 486C of the Taxes Consolidation Act (TCA) 1997
|
This section provides relief from corporation tax for a company that commences a new qualifying trade, and the relief is available where the total corporation tax payable for an accounting period does not exceed €40,000. Marginal relief is available where the corporation tax payable is between €40,000 and €60,000. The value of the relief is linked to the amount of employer PRSI paid by a company, in order to link the scheme with the creation of jobs. The relief was due to expire at the end of 2014, and was extended by section 39, Finance Act 2014 to companies which commence a new qualifying trade in 2015. |
|
Sections 666, 667B and 667C of the Taxes Consolidation Act (TCA) 1997 |
The stock relief for farmers provided under section 666 is due to expire on 31 December 2015. The enhanced stock relief available to qualifying farmers under section 667B, and to registered farm partnerships under section 667C, in respect of increases in stock values, will also expire on 31 December 2015. |
|
Section 477B of the Taxes Consolidation Act (TCA) 1997 |
The Home Renovation Incentive in section 477B provides for tax relief on qualifying expenditure incurred by homeowners on the repair, renovation or improvement of their main home, and by landlords on the repair, renovation or improvement of rental properties. Homeowners who incur qualifying expenditure in the period from 25 October 2013 to 31 December 2015 may claim the relief. Landlords who incur qualifying expenditure in the period from 15 October 2014 to 31 December 2015, may also claim the relief. |
|
Section 825B of the Taxes Consolidation Act (TCA) 1997 |
This section, which provides for the repayment of tax where earnings are not remitted to the State, was closed off with effect from 1 January 2012. However, any individual who was first entitled to claim the relief in 2011, will continue to qualify for the relief up until 31 December 2015. |
|
Paragraph (5) of Schedule 1 to the Stamp Duties Consolidation Act (SDCA) 1999 |
This legislation provides for consanguinity relief in respect of stamp duty on transfers or conveyances of farmland, on or prior to 31 December 2015, by a person of any age. From 1 January 2016 to 31 December 2017, the relief is continued in relation to transfers or conveyances of farmland but only where the individual transferring or conveying the farmland has not reached the age of 67 at the date of transfer or conveyance. |
|
Section 125B of the Stamp Duties Consolidation Act (SDCA) 1999 |
This section relates to the levy on pension schemes, which is to expire in 2015. The final payment (0.15% of the aggregate market value of assets) is to be made on 25 September 2015. |
157. Deputy Michael McGrath asked the Minister for Finance the up-to-date position for 2014 in relation to the Revenue Commissioner audits of self-employed contractors; and if he will make a statement on the matter. [29766/15]
View answerI believe the Deputy is referring to Revenue's National Contractors Project, which started in July 2013. In the period 1 July 2013 to 25 June 2015, 686 audits of contracting companies and a further 494 audits of the directors of those companies were concluded giving rise to additional tax interest and penalties of €17,020,605. A further €179,997 is the subject of enforcement action to recover the amounts due. The remaining cases are being actively progressed with the expectation that most of these will be finalised by the end of this year.
158. Deputy Michael McGrath asked the Minister for Finance if Ireland has prepared an application to the European Stability Mechanism for retrospective recapitalisation of the banks; and if he will make a statement on the matter. [29767/15]
View answerAs you will be aware, the Euro-area Heads of State or Government (HoSG) agreed in June 2012 that "it is imperative to break the vicious circle between banks and sovereigns" and that when a Single Supervisory Mechanism, involving the ECB, is in place and operational, the European Stability Mechanism (ESM) could recapitalise banks directly.
On 8 December 2014, the ESM Board of Governors approved the creation of the Direct Recapitalisation Instrument (DRI) in accordance with Article 19 of the ESM Treaty. The operational framework for the DRI, approved on the same date, includes a specific provision in relation to the retroactive application of the instrument. The guideline states that the potential application of the instrument for this purpose should be decided on a case-by-case basis and by mutual agreement.
However, unlike back in 2012, the ESM is no longer the only option open to us to recover the money provided to recapitalise our banks. Investors are now willing to support Irish banks again and the market value of our investments has improved accordingly. My overall objective in relation to the State's investment in the banks is to maximise the return to the Irish taxpayer over time.
In line with this objective my Department is working with AIB, the institution where €20.8 billion has been invested, on reconfiguring the capital structure and looking at a range of options available to recoup value from the bank. I have appointed Goldman Sachs International from our panel of financial advisers to provide financial advice in this regard. The focus will be on ensuring that the best decisions are made regarding potential capital restructuring options and sequencing in order to maximise the return of cash to the State from our AIB investments over time. While this is just the start of the process, it is an essential first step on the road to recovering value for the taxpayer. All options remain on the table and it is too early to specify what steps will be taken next or indeed to put a timeline on decisions.
In relation to Bank of Ireland, the Deputy will be aware that we have already made a net positive cash return from our investment in, and support for, the bank. In addition, we continue to hold a valuable equity stake in BOI which, at the current share price, is worth c. €1.7 billion. Lastly in relation to ptsb, the situation there is that the company has recently completed a €525 million capital raise from private investors, this comprised of €400 million equity and €125 million AT1 (debt instrument). As part of the transaction the State sold €98 million worth of shares to enable the Company to meet the 25% Free Float requirements of the Irish and London stock exchanges. As a result of the Capital Raise, the State's holding has been diluted from 99.2% to 74.9% leaving the state with a valuable equity investment of circa €1.6 billion. The remaining 25% shareholding is held by institutional and retail investors.
163. Deputy Michael McGrath asked the Minister for Finance the yield that would be raised by increasing the price of cigarettes by €0.25; and by €0.50, and by these amounts across other tobacco products; and if he will make a statement on the matter. [29780/15]
View answerI am informed by the Revenue Commissioners that the estimated yield that could be raised in a full year through increasing the tax on cigarettes by 25 cent and 50 cent, with a pro rata increase in duty on other tobacco products, is in the region of €30m and €60m respectively, assuming no change in consumer behaviour.
164. Deputy Michael McGrath asked the Minister for Finance if he expects to achieve the €100 million in value added tax from changes to how it is applied for cross-border European Union telecommunications broadcasting and electronically supplied services, as set out in budget 2015; and if he will make a statement on the matter. [29785/15]
View answerI am advised that at present there is no change to the estimate as set out in Budget 2015 in relation to the impact on receipts from changes to how VAT is applied for Cross-border EU telecommunications broadcasting and electronically supplied services.
On 1 January 2015, new EU VAT rules came into effect changing the place where VAT is chargeable in respect of all supplies of telecommunications, broadcasting and e-services to consumers. VAT on these services is now chargeable where the consumer is located instead of where the supplier is located. This ensures that the VAT goes to the Member State in which the services are used. The estimate of €100 million in respect of these changes was based on two specific and immediate VAT inflows into the Irish Exchequer directly resulting from the new rules. The 1st element was the VAT revenue shifting from Luxembourg in respect of services bought by Irish consumers from Luxembourg-based suppliers. The 2nd was VAT revenue shifting from the UK Exchequer in respect of TV broadcasting services currently provided from the UK to Irish consumers. The estimate of €100 million was a combination of these two elements and I am advised by the Revenue Commissioners that these projections were very accurate.
However, there is a very welcome additional source of revenue that we were unable to estimate at the time. As a result of the change, businesses are required to register and account for VAT in every Member State in which they supply such services to consumers or, alternatively, to avail of the optional special scheme known as the Mini One Stop Shop (MOSS). The MOSS scheme is a simplification scheme which allows a business engaged in those supplies to register in a single Member State, to file a single quarterly return and pay its VAT liability for all Member States through a web portal in the Member State of registration. The return details and payments are transferred by the Member State of registration to the relevant Member States of consumption with the Member State of registration retaining a percentage of the VAT collected. The percentage retained is 30% during 2015/6 and 15% during 2017/8.
I am advised that the total VAT received from other Member States through the MOSS scheme in relation to supplies to consumers in Ireland for Q1 2015 along with VAT retained by Revenue amounted to €32.3 million in Q1 2015.
165. Deputy Michael McGrath asked the Minister for Finance the number of interest paying accounts on which deposit interest retention tax was paid in each year from 2011 to 2014; and if he will make a statement on the matter. [29786/15]
View answer166. Deputy Michael McGrath asked the Minister for Finance the average payment of deposit interest retention tax per eligible account in which such a tax liability arose, in each year from 2011 to 2014; and if he will make a statement on the matter. [29787/15]
View answer168. Deputy Michael McGrath asked the Minister for Finance the tax forgone as a result of the Deposit Interest Retention Tax Exemption Scheme in the years 2012 to 2014; and if he will make a statement on the matter. [29789/15]
View answer169. Deputy Michael McGrath asked the Minister for Finance the number of deposit savings accounts which in 2014 yielded up to €10,000; and from €10,001 to €25,000; €25,001 to €50,000; €50,001 to €100,000; €100,001 to €200,000; €200,001 to €300,000; €300,001 to €400,000; €400,001 to €500,000; €500,001 to €600,000; €600,001 to €700,000; €700,001 to €800,000; €800,001 to €900,000; €900,001 to €1,000,000; and €1 million plus, in deposit interest retention tax; and if he will make a statement on the matter. [29790/15]
View answerI propose to take Questions Nos. 165, 166, 168 and 169 together.
I am informed by Revenue that the amount of Deposit Interest Retention Tax (DIRT) collected in 2011 to 2014 is available in the "Net Receipts" section of the Revenue's Statistics webpage: http://www.revenue.ie/en/about/statistics/index.html.
I am further informed by Revenue that DIRT on interest bearing deposits is declared and paid on a four-times yearly basis by financial institutions: in April, July and October of the tax year in question and in the following January. Returns for each year are due by 15 January of the following year and the total value of DIRT due and paid is reported to Revenue on the January returns at institutional level. Sufficiently detailed figures are not required in these returns to identify the numbers of accounts on which DIRT was paid, the average DIRT payment per account or the tax forgone resulting from DIRT exemptions.
However, the Deputy may be interested to note that, separately, under regulations as provided for in Section 891B of the Taxes Consolidation Act 1997, certain financial institutions, such as banks and credit unions, are required to make automatic annual returns at account level electronically to Revenue. The primary purpose of this Section is to provide information for use in risk analysis by Revenue and therefore the requirement to report interest focuses on account holders in receipt of larger payments.
The information under S891B is provided where the payment of interest is greater than €635 in a year and in all instances of a first interest payment on newly opened accounts irrespective of amount. These returns include DIRT exempt accounts.
Returns for 2011, 2012, 2013, & 2014 were due by the end of March 2012, 2013, 2014 and 2015 respectively. It is important to note the information received under Section 891B is not limited to individuals but also includes interest payments on accounts held by corporations and other entities. It should also be noted that the reporting threshold was reduced from €635 to €300 from 2014 onwards. To assist financial institutions with the change, the filing deadline for 2014 returns was extended to 30th June 2015. As a result, 2014 figures should be considered as preliminary.
The number of interest bearing deposit accounts reported under the S891B regulations for 2011, 2012, 2013 & 2014 is 1.43 million, 1.22 million, 1.21 million and 1.31 million respectively. The total value of interest paid to these accounts for 2011, 2012, 2013 & 2014 is €2.42 billion, €2.10 billion, €1.97 billion and €1.38 billion respectively. Financial institutions reported that DIRT was not deducted on around 190,100, 197,000, 201,300 and 162,600 of these accounts for 2011, 2012, 2013 & 2014 respectively but data on the amount of DIRT forgone in respect of such accounts are not available. These figures are provisional and may be subject to revision.
I am advised that a breakdown of the interest payments by range is not readily available.
167. Deputy Michael McGrath asked the Minister for Finance the amount raised to date from the bank levy introduced in budget 2014; the number of institutions to which the levy was applied; and if he will make a statement on the matter. [29788/15]
View answerI am advised by Revenue that data relating to the net receipts for Stamp Duty are available from the statistics webpage of the Revenue website at http://www.revenue.ie/en/about/statistics/index.html. In particular, the data which the Deputy seeks are available at http://www.revenue.ie/en/about/statistics/stamp-duty-receipts.pdf. The bank levy, which was introduced in Finance (No. 2) Act 2013, was received from 10 financial institutions.
170. Deputy Michael McGrath asked the Minister for Finance his plans to appoint an additional public interest director to the board of the Bank of Ireland; and if he will make a statement on the matter. [29792/15]
View answerI can confirm for the Deputy that I have notified Bank of Ireland that my current intention is to appoint a replacement director in due course to the board of Bank of Ireland, following the sad loss of Mr. Joe Walsh.
