Written Answers Nos. 318-335
318. Deputy Brendan Smith asked the Minister for Finance his plans to amend the criteria in respect of the primary medical certificate; if he is aware that the Ombudsman referred to the need to change these criteria; and if he will make a statement on the matter. [37918/15]
View answerI am aware that the Ombudsman wrote to the Secretary General of my Department and made comments regarding the eligibility criteria of the Disabled Driver and Disabled Passengers Scheme. The Ombudsman stated that, in his opinion, the criteria were narrowly focused and prescriptive.
The Scheme and qualifying criteria were designed specifically for those with severe physical disabilities and are, therefore, necessarily precise.
The Scheme represents a significant tax expenditure. Between the Vehicle Registration Tax and VAT foregone, and the assistance with fuel costs used by members of the Scheme, based on provisional figures the Scheme represented a cost of €48.6 million to the Exchequer in 2014, an increase of €5.1 million on the 2013 cost. This figure does not include the revenue foregone to the Local Government Fund in respect of the relief from Motor Tax provided to members of the Scheme.
I recognise the important role the Scheme plays in expanding the mobility of citizens with disabilities. 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 those currently provided for in the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994.
319. Deputy Pearse Doherty asked the Minister for Finance his plans to regulate the importation of alcohol for direct sale, that is, by online sale to the home; and the measures that are in place to ensure duty is paid on such imports. [37933/15]
View answerThe importation of alcohol into the State is subject to tight regulation and it is illegal under excise law to supply alcohol products in Ireland on which the appropriate excise duty has not been paid. This includes alcohol products sold online to Irish consumers.
I am informed by the Revenue Commissioner that traders who import alcohol products into Ireland must be authorised by Revenue to do so and must pay excise duty on the products at the time they are released for consumption in the State. A supplier located in another member state who sells alcohol products directly to consumers in Ireland must pay excise duty on the products concerned and is required to appoint a person to act as his or her representative in the State for that purpose. The alcohol products supplied by traders who do not comply with these requirements are liable to seizure and any person concerned in the supply may be prosecuted for the offence of evading or attempting to evade payment of excise duty.
The sale of intoxicating liquor to consumers is regulated under the Liquor Licensing laws and the Minister for Justice and Equality has set out the position in replies to earlier Parliamentary Questions on online sales and direct delivery of alcohol product to consumers.
320. Deputy Pearse Doherty asked the Minister for Finance his position on the introduction of the common consolidated corporate tax base; if this issue was ever discussed with the troika; if any commitment was entered into; and if he will make a statement on the matter. [37934/15]
View answerIn June 2015 as part of its 'Action Plan on Corporate Taxation', the European Commission announced that it intends to re-launch its Common Consolidated Corporate Tax Base (CCCTB) proposal sometime in 2016.
Member States have yet to see the specific details of the re-launched CCCTB proposal, and will not see them until the proposal is published in 2016.
On Budget Day, I published an update on Ireland's International Tax Strategy which sets out how Ireland will engage with the EU agenda on tax. Ireland will constructively engage in discussions on the CCCTB proposal to ensure that Ireland's perspective is fully heard but we will maintain our position that taxation remains an area for unanimous decision making at Council, as laid out in the Treaties.
I can inform the Deputy that, while meetings with the Troika are frequently wide ranging and cover a wide variety of subjects, no commitment in relation to the CCCTB proposal was entered into by Ireland, nor was the issue a focus of discussions with the Troika.
321. Deputy Peadar Tóibín asked the Minister for Finance the number of additional workers who would be removed from the universal social charge if the exemption rate was increased from €13,000 to €19,572. [37964/15]
View answerI am advised by the Revenue Commissioners that the number of income earners that would be additionally exempted from the Universal Social Charge (USC) by increasing the USC threshold from €13,000 to €19,572 is estimated to be in the order of 277,000.
These figures are estimates from the Revenue tax forecasting model using latest actual data for 2013, the latest year for which data is available, adjusted as necessary for income, self-employment and employment trends in the interim. They are estimated by reference to 2016 incomes and are provisional and may be revised.
322. Deputy Pearse Doherty asked the Minister for Finance if he will include Longboat Quay and other residential buildings, with major fire safety or other structural issues, in a scheme to exempt the residents from payment of the Local Property Tax; and if he will make a statement on the matter. [37965/15]
View answerThe Finance (Local Property Tax) Act 2012 (as amended) provides that any property that is in use as, or that is suitable for use as, a dwelling house, is liable to the local property tax (LPT). Therefore, the condition of a property is not relevant where the property is actually occupied as a dwelling house.
Where a property is not occupied and is in such bad condition that it is not suitable for occupation as a dwelling house, it is not liable to LPT. I am advised by the Revenue Commissioners that it is not possible to provide a prescriptive set of criteria that a property must meet to be treated as not suitable for occupation as a dwelling house. As LPT is a self-assessment tax, it is up to a property owner to assess whether a property is liable or not, and to assess the chargeable value of the property where it is liable. In cases where the property owner assesses a property as non-liable due to its being unsuitable for use as a dwelling or assesses a property at a reduced value because of fire safety or other structural issues, Revenue will consider the facts and circumstances of the particular case.
323. Deputy Thomas P. Broughan asked the Minister for Finance if he has requested the Central Bank of Ireland, as regulator of the insurance industry, to report to his Department and the Houses of the Oireachtas on the massive increase in car and other insurance costs during 2015; and if he will make a statement on the matter. [38016/15]
View answerAs Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. The Central Bank of Ireland, as regulator, is responsible for prudential supervision of insurance companies.
It is important to note that the provision of insurance cover and the price at which it is offered is a commercial matter for insurance companies and is based on an assessment of the risks they are willing to accept and adequate provisioning to meet those risks.
Under the Central Bank Act 1942 (as amended), the Central Bank of Ireland is accountable to the Oireachtas in the exercise of its regulatory functions and is required to prepare an annual statement for the Oireachtas relating to its performance in regulating financial services. As Minister for Finance, I do not have the power to direct the Central Bank to report to the Oireachtas.
Section 6A of the 1942 Act provides that the Minister for Finance may, from time to time, request to consult with the Governor of the Central Bank, in relation to a range of matters, including the stability of the financial system. In July this year, I wrote to the Governor of the Central Bank under Section 6A of the Act seeking a report setting out his assessment as to the outlook for the insurance industry generally, both international and domestic.
In response to my request, the Governor responded to me with:
1. A letter setting out an overview of the non-life insurance sector and the Central Bank's 2015 specific supervisory engagement with loss-making firms within it, while abiding by the relevant provisions under statute that prohibit the Central Bank from disclosing confidential information other than in summary or collective form.
2. Section 3.3 of the Central Bank's 2015 Macro-Financial Review which provides a review of insurance in Ireland, the challenges faced by its sub-sectors and the interplay of insurance with financial stability.
3. A note on changes taking place in Ireland that are making the claims environment volatile.
4. Some suggested areas of domestic policy which could bring greater stability to the operating environment of general insurance in Ireland and reinforce the Central Bank's ability to supervise insurance firms.
A number of issues are widely reported to be contributing to the increasing cost of insurance in Ireland and some of these were raised by the Governor in his letter. This has in turn coincided with the introduction of Solvency II in January 2016 leading to a necessity for insurance companies to increase their capital reserves. The Central Bank has stated publicly that insurance companies may need to increase their premiums in order to do this.
This is an important issue, but also a complex one involving a number of different parties, including Government Departments, State bodies and private sector entities. My officials are examining the points raised by the Governor and those raised by other interested parties in this area. A process is underway to examine them in detail and to determine what actions may need to be taken.
324. Deputy Clare Daly asked the Minister for Finance the criteria under which a teacher is entitled to claim flat rate expenses; and if this payment is open to, teachers in English language schools and teachers who teach adults. [38035/15]
View answerLegislation governing the deductibility of expenses incurred in employment is contained in section 114 of the Taxes Consolidation Act 1997. It provides that, for an expense to qualify as a deduction against income from an office or employment, the expense must be wholly, exclusively and necessarily incurred in the performance of the duties of the office or employment.
For ease of administration, where a large number of employees incur such expenses which are not reimbursed by their employer, the Revenue Commissioners provide a facility whereby a flat rate expense allowance may be claimed. This regime has been developed over many years following negotiations between Revenue and representative bodies of individual sectors/groups of employees e.g. trade unions, employee associations, etc.
The agreed deduction may then be applied to all employees of the class or group in question. This ensures each individual is granted the same amount and ensures uniformity of approach in Revenue offices around the country. In addition, it reduces the need for individual claims to be submitted annually to Revenue. This is not to say that an individual cannot make a claim over and above the agreed amount in respect of the actual amount deductible where this amount exceeds the flat rate.
Following submissions from the INTO, ASTI and TUI on behalf of teachers in primary, post-primary and third level education, Revenue agreed flat rate expenses which are published on their website at http://www.revenue.ie/en/tax/it/leaflets/flat-rate-expenses.xls.
These amounts are in respect of expenditure incurred which is not recouped from the school or the Department of Education and Skills.
While the teachers referred to by the Deputy have not sought a flat rate expense allowance, and therefore there is no such allowance in place, it is open to any representative body to make a submission to Revenue on their behalf to seek to agree such an allowance.
325. Deputy Michael McGrath asked the Minister for Finance if he will address an issue regarding income tax raised by a person (details supplied) in County Waterford; and if he will make a statement on the matter. [38104/15]
View answerAs the Deputy will be aware, the State pension, including an increase for a qualifying adult dependent, is chargeable to income tax. Where an individual is entitled to the State pension and such pension is increased by virtue of that individual having a qualifying adult dependant, it remains one pension for tax purposes.
This position was not changed by Finance (No.2) Act 2013 which inserted Section 126 (2B) into the Taxes Consolidation Act 1997 in order to reaffirm the position that any increase in the amount of such a pension in respect of a qualifying adult is treated as if it arises to and is payable to the beneficiary of the pension i.e. the person who qualifies for the pension. It is, therefore, that person's obligation to declare the pension, including any amount paid in respect of a qualifying adult dependent as part of his or her income.
With regard to the effective tax rates suggested in the details supplied, I am advised by the Revenue Commissioners that, as only the individual in receipt of the State pension is liable to income tax on it, and as any such element of their income is only taxed once, there is no basis for the effective rates suggested. It is also worth pointing out that all social welfare payments are exempt from USC.
I would point out that the changes to the income tax system included in Budget 2015 mean that individuals who paid Income Tax and or USC in 2014 are seeing a reduction in their tax bill in 2015 where incomes are equal. This process is continuing with the Budget 2016 changes, which will lead to a further reduction in the tax burden on low and middle income earners from next year.
326. Deputy Jack Wall asked the Minister for Finance if a person in County Kildare (details attached ) is due a tax refund; and if he will make a statement on the matter. [38113/15]
View answerIn accordance with Section 865 of the Taxes Consolidation Act 1997, any claim for repayment of tax must be made within four years after the end of the year to which the claim relates. In those circumstances, therefore, it is not possible to review matters for the years concerned.
328. Deputy Tony McLoughlin asked the Minister for Finance further to Question No. 347 of 20 October 2015, and to the contents of the Finance Bill 2016 published on 22 October 2015, if he will outline the conditions that farmers whose land will be compulsorily acquired must meet to qualify for the 13% relief on capital gains tax; and if he will make a statement on the matter. [38121/15]
View answerI am advised by the Revenue Commissioners that gains in respect of land acquired by way of compulsory purchase order are chargeable to capital gains tax (CGT) at the rate of 33%.
However, as I previously advised, a revised relief for entrepreneurs has been introduced in section 33 of Finance Bill 2015, which was published on 22 October. The revised relief provides that a reduced rate of CGT of 20% will apply in respect of chargeable gains on disposals of chargeable business assets made by an individual on or after 1 January 2016 up to a lifetime limit of €1 million.
On the basis of the Finance Bill provision as published, a farmer whose land has been compulsorily acquired will qualify for the reduced rate relief of 20% if the following conditions are met:
1. The compensation payment under the compulsory purchase order is received on or after 1 January 2016;
2. The land in question was owned by the individual for a minimum period of 3 years prior to the compulsory acquisition; and
3. The land in question was used by the individual for the purposes of a farming business prior to the compulsory acquisition.
It should be noted that the reduced rate of 20% will apply only to the first €1 million of chargeable gains accruing to the individual on the disposal of chargeable business assets on or after 1 January 2016.
329. Deputy Derek Keating asked the Minister for Finance if he has considered the introduction of tax relief for child care costs (details supplied). [38132/15]
View answerAs the Deputy may be aware, an Inter-Departmental Working Group was established by the Minister for Children and Youth Affairs to identify and assess policies and future options for increasing the quality, accessibility (including supply) and affordability of early years and school-age care and education services. The group published its report in July 2015 and a copy of the report is available on the website of the Department of Children and Youth Affairs at www.dcya.gov.ie/documents/earlyyears/20150722IDGReportonEarlyYrsInvestmentReport.pdf.
In that report, while tax credits and/or fee subsidies were ranked very highly by parents as a key measure to improving affordability of child care, the group recommended that direct subsidies would be a more effective way of targeting scarce Government resources. Among the many arguments against the introduction of tax relief was the fact that tax relief is only of benefit to those in the tax net and it is estimated that in 2016, 36% of income earners will be exempt from income tax altogether. It was also argued that any tax relief would most likely be absorbed by child care providers in the form of higher prices. Whilst a credit based on a range of take-up and eligibility assumptions was considered (with tentative costings in the range of €290 million to €592 million per annum), pursuit of this option was not recommended.
The Deputy will also be aware of measures that were announced in Budget 2016 in relation to child care, which are set out below for his information.
The Early Childhood Care and Education Scheme has been extended to provide that children will be eligible for free child care from three years of age up until they are five and a half, or until they start primary school. In addition, over €15 million in new funding has been provided to facilitate the full participation of children with disabilities in the scheme.
To support parents in low paid employment, or in training and education, 8,000 places have been created through the Community Childcare Subvention Programme. To assist with after school care, €3 million has been allocated to develop after school services in school buildings. Child Benefit has been increased by €5 a month and a commitment has been given to introduce statutory paternity leave of two weeks from September 2016.
330. Deputy Seán Kenny asked the Minister for Finance the amount of excise duty collected in 2014; and if he will make a statement on the matter. [38196/15]
View answerThe amount of excise duty collected in 2014 was €5,134 million.
331. Deputy Clare Daly asked the Minister for Finance the steps he has taken regarding allegations by whistleblowers of wrongdoing, whereby they conducted audits for the Central Bank of Ireland and were subsequently dismissed from their employment as a result of refusing to doctor figures. [38259/15]
View answerAs the Deputy has not provided specific details of the allegations to which she refers, I cannot provide a full response to this question.
The Protected Disclosures Act 2014 provides for redress for individuals who are penalised for making a protected disclosure. If a person believes that they have been penalised for such a disclosure, they are entitled to make a complaint to the Rights Commissioner.
Furthermore, in the case of the Central Bank, the Governor is required to provide a report to the Central Bank Commission at least annually on any action taken or not taken in response to protected disclosures.
332. Deputy Eamonn Maloney asked the Minister for Finance if the final 0.15% pension fund levy expires at the end of 2015, when the enabling relevant legislation will be deleted from the Statute Book; and if he will make a statement on the matter. [38280/15]
View answerThe 0.15% stamp duty levy on pension funds will, as I have previously confirmed, cease at the end of 2015. As the relevant legislation - sections 125B (2) and 125B(3) of the Stamp Duties Consolidation Act 1999 - is time limited, it will expire automatically and no deletion will be necessary to effect the end of the levy.
334. Deputy Pearse Doherty asked the Minister for Finance what specifically the agenda point media plans for senior persons for his meeting with AIB in September 2015 related to; and if he will report on the discussions on the point. [38335/15]
View answerFirstly, as the Deputy knows, I have taken steps to ensure the banks provide options for mortgage holders to reduce their monthly repayments.
Last May, I met the six main mortgage lenders, including AIB, and outlined my view that the standard variable rate being charged to Irish customers was too high. The banks agreed to review their rates and products and, by the beginning of July, to have simple options to reduce monthly mortgage payments for SVR customers.
I then conducted a follow-up series of meetings with these banks in September to discuss various issues and review the progress that had been made in relation to mortgage interest rates. I met senior management of AIB on 14 September 2015.
In advance of this meeting, a suggested agenda was circulated internally. The item in relation to media plans was a standard point which referred to asking the banks about their media plans to advertise rate changes, options for mortgage customers or switching opportunities, for example.
At these meetings, the banks updated me on general issues and outlined where they had put options in place to allow borrowers reduce their repayments. These options range from lower variable rates to new suites of variable rates based on loan to value and reductions in fixed rates. The banks also discussed any media campaigns which they were undertaking in relation to these initiatives.
I have since encouraged borrowers to contact their banks to see what is available to them in their circumstances or consider moving to another bank, where possible, if the offer is not satisfactory.
335. Deputy Pearse Doherty asked the Minister for Finance to report on his discussions with Allied Irish Banks on the macroprudential rules introduced by the Central Bank; and if he will make a statement on the matter. [38336/15]
View answerAs the Deputy is aware, I met AIB and the other main Irish banks last September. The primary purpose of these meetings was in relation to mortgage rates, but some other banking-related issues, including the Central Bank macroprudential measures for residential mortgage lending, were also raised. In that regard, AIB provided me with an update on the roll out by it of the new macro prudential rules. As the new rules only came into effect in February, it was still at a very early stage in the operation of the new framework. Nevertheless, AIB did confirm that it was both willing and in a position to provide mortgage finance to credit worthy borrowers for house purchases. It also indicated that it will continue to liaise and work closely with the Central Bank on the operation and practicalities of the new macroprudential framework and that if any issue arose it would raise the matter with the Central Bank.
