Terence Flanagan
Question:184. Deputy Terence Flanagan asked the Minister for Finance the status of sports clubs (details supplied); and if he will make a statement on the matter. [46605/15]
View answerTax Exemptions
Questions (184)
Written answers
I am advised by Revenue that Section 2 of the Charities Act 2009 defines the criteria of a charitable organisation and also defines bodies that are excluded from the qualifying definition. Revenue has also advised me that the granting of charitable status is a question for the Charity Regulator since October 2014.
The 'exclusion' includes 'approved bodies of persons' (such as sports bodies) as defined by Section 235 of the Taxes Consolidation Act (TCA) 1997. For this reason, a sports body is not within the definition of a charitable organisation and cannot be granted a charitable tax exemption. However, Section 235 and various other Sections and Acts provide for certain tax exemptions for approved sports bodies, for example, Income Tax, Corporation Tax, Dividend Withholding Tax (Sec 172C(2)(f)TCA) and Stamp Duty (Sec 82B(1) Stamp Duties Consolidation Act 1999).
The VAT treatment of goods and services in the State is subject to the requirements of EU VAT law. The EU VAT Directive (Council Directive 2006/112/EC) provides that the standard rate of VAT (23%) must be applied to various supplies such as sports gear. The Directive also provides that the VAT rate is determined by the nature of the supply rather than the status of the recipient of the supply.
Stability and Growth Pact
Questions (185, 186)
Mary Lou McDonald
Question:185. Deputy Mary Lou McDonald asked the Minister for Finance if under European Union fiscal rules the required annual structural budget balance improvement for Ireland from 2016 must be at least 0.5% each year and that the higher levels of adjustment contained in the Government's fiscal plan for each year from 2016 to 2021 is a policy choice made by Government rather than a requirement under the fiscal rules. [46703/15]
View answerMary Lou McDonald
Question:186. Deputy Mary Lou McDonald asked the Minister for Finance the gross and net fiscal space available to the Government for each year from 2016 to 2021 if the structural balance improvement is maintained at 0.5% per year from 2016 to 2021. [46704/15]
View answerWritten answers
I propose to take Questions Nos. 185 and 186 together.
Under the Stability and Growth Pact (SGP), Ireland is obliged to be at or make rapid progress towards its Medium Term Objective (MTO) of a balanced budget in structural terms. This obligation also stems from the Fiscal Compact, to which Ireland acceded following the referendum in 2012, and has also been enshrined in domestic legislation through the Fiscal Responsibility Act 2012.
As Ireland is not yet at its MTO, it must improve its structural balance by more than 0.5% of GDP per annum until the MTO is reached. In the Country Specific Recommendations (CSRs) adopted by the Council on 14th July 2015 an improvement of 0.6% was stipulated for 2016. The forecasts in the Budget for subsequent years were based on a minimum annual structural improvement consistent with the table below.
The required adjustment for 2017 will be set in the CSRs to be adopted by the Council next July on the basis of a European Commission recommendation. The Commission has clarified over the last year the basis on which it will make its recommendation for an appropriate improvement in the structural balance for each Member State. Its analysis takes account of the debt-to-GDP ratio, the size and sign of the output gap and whether the economy is growing faster than potential. The matrix describing the required structural adjustment based on these criteria has been published by the Commission and is outlined below. The rationale for the differentiated approach is to better align the required fiscal adjustment with the prevailing economic environment.
Matrix for specifying the annual fiscal adjustment towards the Medium-Term Objective (MTO)
|
- |
|
Required annual fiscal adjustment* |
|
|
% GDP |
Condition |
Debt below 60 and no sustainability risk |
Debt above 60 or sustainability risk |
|
Exceptionally bad times |
Real growth < 0 or output gap < -4 |
No adjustment needed |
|
|
Very bad times |
-4 output gap < -3 |
0 |
0.25 |
|
Bad times |
-3 output gap < -1.5 |
0 if growth below potential, 0.25 if growth above potential |
0.25 if growth below potential, 0.5 if growth above potential |
|
Normal times |
-1.5 output gap < 1.5 |
0.5 |
> 0.5 |
|
Good times |
output gap 1.5 |
> 0.5 if growth below potential, 0.75 if growth above potential |
0.75 if growth below potential, 1 if growth above potential |
Accordingly the minimum level of the required improvement in the structural balance is set for each Member State in the CSRs addressed to them by the Commission and Council in accordance with the above matrix of requirements.
Projections in Budget 2016 provide for the cost of demographic pressures and the public capital plan over the period to 2021, together with the cost of the Lansdowne Road agreement to 2018. The implied pace of structural adjustment, consistent with these assumptions is set out in the Budget document. Were Ireland to pursue an annual structural adjustment below the level stated in the Budget, in terms of a broad order of magnitude each 0.1% would translate into about €67 million of fiscal space in terms of additional permitted spending each year under the expenditure benchmark. It should be borne in mind, however, that any additional fiscal stimulus would have an economic impact, which would in turn, impact the level of fiscal space available.
Flood Risk Insurance Cover Provision
Questions (187)
Thomas P. Broughan
Question:187. Deputy Thomas P. Broughan asked the Minister for Finance if updated flood insurance policies will be applied to homes and businesses previously refused flood insurance; and if he will make a statement on the matter. [1397/16]
View answerWritten answers
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. In my role as Minister for Finance, I have responsibility for the development of the legal framework governing financial regulation. Neither I, nor the Central Bank of Ireland, can interfere in the provision or pricing of insurance products or have the power to direct insurance companies to provide flood cover to specific individuals.
The Government policy in relation to flooding is focused on the development of a sustainable, planned and risk-based approach to dealing with flooding problems, with a view to addressing the increased availability of flood insurance. To achieve this aim, there is a focus on prioritising spending on flood relief measures, development and implementation of plans by the Office of Public Works (OPW) to implement flood relief schemes and the transfer of data in relation to completed flood defence schemes to the insurance industry by the OPW.
The current flooding crisis has raised issues in relation to insurance and flooding. The Taoiseach and some other of my colleagues in Government met the insurance industry yesterday to discuss the industry role in providing flood insurance. The Taoiseach has asked the insurance industry to revert back within two weeks on the provision of insurance in areas where demountable defences are in place, along with details on the availability of insurance in areas with flood defences. I would also note that my own officials are undertaking a comparative analysis of the different approaches to flood insurance in other countries.
Disabled Drivers Grant Appeals
Questions (188)
Pat Breen
Question:188. Deputy Pat Breen asked the Minister for Finance the status of an application by a person (details supplied) in County Clare; and if he will make a statement on the matter. [1546/16]
View answerWritten answers
The Disabled Drivers Medical Board of Appeal has informed me that the person concerned has an appointment for an appeal hearing at 2PM on 3 March 2016.
Regulation 6(1)(e) of the Disabled Drivers and Disabled Passengers (Tax Concession) Regulations 1994 (S.I. 353 of 1994) mandates that the Medical Board of Appeal is independent in the exercise of its functions.
Customs and Excise Staff
Questions (189)
Tony McLoughlin
Question:189. Deputy Tony McLoughlin asked the Minister for Finance further to Parliamentary Question No. 161 of 8 December 2015, if he is satisfied with the resources deployed by the Customs and Excise Service in the detection of drugs, given the significant decrease in the detection of drugs in the midlands-west region since 2009 as alluded to in his earlier reply; and if he will make a statement on the matter. [46452/15]
View answerWritten answers
I am satisfied that Revenue is very active in the area of targeting and combatting drugs smuggling and is committed to playing an active role, in conjunction with other relevant agencies, in working against this criminal activity and those responsible for it. The Deputy will be aware from my reply to his previous Question in this matter that Revenue has an enforcement presence at all key airports and ports and at other strategic locations throughout the country, including the Border, Midlands, West Region. Revenue place particular emphasis on developing an intelligence-based focus at both national and regional level, deploying resources to areas of highest risk. Enforcement strength is augmented with additional personnel on a risk-assessment basis, or when particular operations are taking place against illegal activity.
I am advised by Revenue that variations in the detection of drugs must be considered against, inter alia, changes in arrangements and locations of post and parcels arriving into the State in recent years and also in the pattern of direct flights into particular locations in the State from areas that might be regarded as higher risk.
Customs and Excise Controls
Questions (190, 191)
Tony McLoughlin
Question:190. Deputy Tony McLoughlin asked the Minister for Finance the details of the tests that are being carried out by customs officers at airports and shipping ports on passengers suspected of having ingested narcotics prior to arrival in the State; and if he will make a statement on the matter. [46453/15]
View answerTony McLoughlin
Question:191. Deputy Tony McLoughlin asked the Minister for Finance further to his reply to Parliamentary Question No. 159 of 8 December 2015, the date of the two Supreme Court rulings mentioned that relate to the right to due process for persons detained; and if he will make a statement on the matter. [46454/15]
View answerWritten answers
I propose to take Questions Nos. 190 and 191 together.
I am advised by Revenue that suspicion of ingestion would be informed by interview with the passenger, intelligence, passenger behaviour and/or other checks by way, for example, of detector dogs, baggage x-ray or search of the person. The question of invasive tests or examinations based on biological samples (urine, saliva, etc.) arises only where there is a strong suspicion of ingestion. Such tests would be confirmatory tests and would not assist in the initial identification of suspects. Any evidence collected would be likely to form grounds for arrest and detention, and part of a prosecution case.
The Supreme Court Judgments referred to in the reply to the previous question (DPP v Gormley and DPP v White, judgments delivered together on 6 March 2014 by Mr Justice Clarke, Supreme Court record numbers 107/11 and 92/12) significantly clarified the rights of suspects both in interrogation after arrest, and in the taking of samples after arrest. Revenue reviewed the judgments, and considered that the practice which best ensured the safety of a prosecution while protecting the rights of the individual was to have any samples taken or detention carried out under specific legal authority after arrest. The Gardaí possess such powers and detention facilities, and Revenue has accordingly agreed procedures for the referral of such cases to the Gardaí.
Tax Reliefs Availability
Questions (192)
Seán Fleming
Question:192. Deputy Sean Fleming asked the Minister for Finance to provide a tax break for low-paid workers who must pay for annual rail commuter tickets to get to and from work, given that the cost of the annual ticket from Portarlington to Dublin is €3,540 and employees on a reasonably high income can get a tax break whereas employees on low incomes can get no tax break, if he will correct this unfair situation; and if he will make a statement on the matter. [46476/15]
View answerWritten answers
I understand the Deputy to be referring to the Travel Pass scheme. The scheme operates on the basis that an employer pays for the Travel Pass on behalf of an employee at the start of the year and the payment is deducted from the employee's emoluments over the course of the year. The incentive operates on the basis that, although such a payment out of an employee's income should be made out of after-tax income, section 118B of the Taxes Consolidation Act 1997 provides that the remuneration foregone shall be exempt from tax. This has the effect of reducing the cost of the Travel Pass to the employee by the amount of tax that would have been paid on the equivalent amount of income at the employee's marginal rate (the highest rate of tax at which the employee is paying tax). In this way the employee, over the course of a year, only suffers the net cost of the Travel Pass, deducted on a weekly, fortnightly or monthly basis, with the total initial cost met by his or her employer.
Where an employer provides a Travel Pass without charge to an employee, section 118(5A) of the Taxes Consolidation Act 1997 provides that there is no benefit-in-kind charge on the employee in relation to cost of the Pass.
It should be noted that where an individual's employer does not participate in the Travel Pass scheme, any benefits that could arise under the scheme will not be available to any employees of that employer. Also, where an employee's income is exempt from income tax, no benefit will arise.
In general, employees do not pay income tax on the first €16,500 of their income because of the PAYE and personal tax credits, and in some cases, depending on eligibility for additional credits, they may be exempt from income tax at even higher levels of income.
In addition, individuals can earn up to €18,304 without becoming liable to PRSI. Furthermore, as a result of the changes introduced in Budget 2016, a further 40,000 low earners will be exempt from the charge to USC from next year and the remainder within the scope of USC will have their liability reduced through the reductions in the three lowest rates of USC which have taken effect from 1 January.
Budget 2016 also introduced a new PRSI credit, available only to lower earners, in order to address the PRSI step effect which could act as a dis-incentive for low earners to earn additional income within a band of earnings at around €18,000 to €19,000 per year.
For the second Budget in a row, taxpayers within the charge to income tax and/or USC on their earnings should see a reduction in their tax liability in 2016, where income remains the same.
Tax Code
Questions (193)
Terence Flanagan
Question:193. Deputy Terence Flanagan asked the Minister for Finance to deal with a matter (details supplied) regarding interest paid on mortgages; and if he will make a statement on the matter. [46555/15]
View answerWritten answers
This question relates to the restriction applying to residential lettings, whereby the deductibility of interest in computing taxable rental income from residential property (insofar as it would otherwise be allowable) is limited to 75% of such interest. The restriction was introduced in the April 2009 supplementary budget in respect of all residential lettings as part of an urgent revenue-raising package aimed at stabilising the public finances.
I am informed by the Revenue Commissioners that for the year 2013, the latest year for which relevant information is available, and making certain assumptions about the data available to Revenue, it is estimated that the cost of increasing the deduction which individuals can take when calculating rental income for tax purposes from 75% to 100% of interest paid, could be in the order of €80 million. This is based on the assumption that tax relief is allowed at the top income tax rate of 40% and the figures provided could be regarded as the maximum Exchequer cost.
In the recent Finance Act I provided for a full 100% interest deduction where the landlord undertakes, for a period of at least three years, to provide accommodation to tenants in receipt of social housing supports and registers such undertakings with the Private Residential Tenancies Board within certain time limits.