Written Answers Nos. 93-99
93. Deputy Pearse Doherty asked the Minister for Finance the savings that would accrue from moving the entire cost of regulation of the financial sector onto the industry, as opposed to the current 50%. [13886/16]
View answerThe Central Bank's total funding requirement for financial regulation activity is determined on an annual basis by the resources required to discharge its legal responsibilities under domestic and EU law. Section 32D and 32E of the Central Bank Act 1942, as amended, provide that the Central Bank Commission may make regulations relating to the imposition of levies and fees on the financial services sector in respect of the recoupment of the costs of financial regulation.
The financial services industry currently funds 50% of the costs incurred by the Central Bank for financial regulation with certain exceptions including the banks which had participated in the Eligible Liabilities Guarantee Scheme, AIB, Bank of Ireland and Permanent TSB, which are required to fund 100% of the Central Bank's regulatory costs. Credit Unions currently contribute approximately 8% to the cost of their regulation.
The current 50% funding arrangement translates into a corresponding reduction in the annual surplus remitted by the Central Bank to the Exchequer. I have been informed by the Central Bank that of the order of €69 million of the Central Bank's 2015 surplus income was redirected to make up for the difference between the costs of regulation and the funding received from the financial services industry.
My Department and the Central Bank last year issued a joint consultation paper to canvass views on the potential for changing the current funding model. My Department is presently working with the Bank on addressing the issues that arose from the 2015 Public Consultation, the results of which will feed into my overall deliberations on this matter.
94. Deputy Pearse Doherty asked the Minister for Finance the cost of dividing the capital gains tax categories into passive and active and applying a 40% rate to the passive tax activity, for example, buying shares, and the following 35% to active engagement, for example, selling on a business. [13888/16]
View answerI am advised by the Revenue Commissioners that as tax returns do not provide a basis for compiling estimates in relation to the amount of Capital Gains Tax liability separately associated with passive and active activity, there is no basis on which Revenue could provide the information requested by the Deputy.
95. Deputy Pearse Doherty asked the Minister for Finance the revenue generated by applying certain measures (details supplied). [13889/16]
View answerI am informed by the Revenue Commissioners that Betting Duty of 1% is levied on both traditional and online (remote) betting, with the latter being in place since 1st August 2015. As there is not yet a full year's data available for online betting, the value of a full year has been estimated and the expected yield is shown in the table below.
|
- |
Traditional Bet |
Remote Bet |
Total |
|
- |
€m |
€m |
€m |
|
Full Year @ 1% |
27.4 |
19.7 |
47.1 |
|
Full Year @ 3% |
82.3 |
59.0 |
141.3 |
|
Additional Yield |
54.9 |
39.3 |
94.2 |
The incidence of the Duty will be the same whether the duty is paid directly by the bookmaker or collected by the bookmaker from customers and paid to Revenue; as such it does not affect the costing and, regardless of how the duty is applied in law, it is borne in practice by consumers.
In relation to the level of increase in duty proposed by the Deputy, I would be reluctant to proceed with a 200% increase on the current rate because of the general compliance implications of an increase of this magnitude, and I think it is particularly important that taxation of remote betting, which commenced on 1 August last, is given a reasonable period in which to settle before considering such an increase.
96. Deputy Pearse Doherty asked the Minister for Finance how he will operate, when he will apply and the amount he will raise from the proposed tax on sugar sweetened drinks. [13890/16]
View answerThe Programme for a Partnership Government states that increased public spending and reductions in personal taxes will be funded through, among other things, a new tax on sugar sweetened drinks.
Details of the design of such a tax is a budgetary matter. In this regard, I would draw the Deputy's attention to the General Excise Duties Tax Strategy Group papers of 2014 and 2015 which examine issues surrounding a tax on sugar sweetened drinks. These papers are available on my Department's website.
97. Deputy Pearse Doherty asked the Minister for Finance the cost of increasing the self-employed tax credit to €800; €900; €1,000; €1,100; €1,200; €1,300; €1,400; €1,500 and €1,650 and tapering out the increase in the credit, for example, €800 minus €550 equals €250 for first taper, from income in excess of €80,000, by 5% per €1,000, for gross income between €80,000 and €100,000, and a second taper on the credit value before the increase credit, €550 from income in excess of €100,000, a reduced credit, by 5% per €1,000, for gross income between €100,000 and €120,000. [13891/16]
View answerI am advised by Revenue that the following table sets out the estimated full year costs to the Exchequer from increasing the earned income tax credit of €550 as set out in Budget 2016 to the various levels as suggested by the Deputy, with the increase in the credit to taper out at income levels between €80,000 and €100,000. These costs also include the estimated yield to the Exchequer that would result in the tapering out of the existing €550 credit by five per cent per €1,000 for those who have incomes in excess of €100,000.
|
Earned Income Credit |
€m |
|
€800 |
23 |
|
€900 |
33 |
|
€1,000 |
43 |
|
€1,100 |
53 |
|
€1,200 |
64 |
|
€1,300 |
74 |
|
€1,400 |
84 |
|
€1,500 |
95 |
|
€1,650 |
105 |
98. Deputy Clare Daly asked the Minister for Finance to engage in consultation with Insurance Ireland regarding the potential for car insurers to offer discounts to motorists who have had dashcams fitted in their cars. [13912/16]
View answerAs Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. Neither I, nor the Central Bank of Ireland, may interfere in the provision of insurance products. The EU framework for insurance expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing, or terms and conditions of an insurance product.
The provision of insurance cover and the price at which it is offered, including the granting of discounts, 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.
I would add that my Department is currently conducting a Review of Policy in the Insurance Sector in consultation with the Central Bank and Government Departments, Agencies and other stakeholders, including the insurance industry.
This Review will include an examination of the factors contributing to the cost and availability of insurance. Work on the Review will continue over the coming months.
99. Deputy Clare Daly asked the Minister for Finance his views on a car insurance company discriminating on grounds of profession relating to charges for annual insurance cover. [13913/16]
View answerAs Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. The ability of the Government to influence insurance pricing is limited as insurance companies are required under European law to price in accordance with risk and neither I, nor the Central Bank of Ireland, have the power to direct insurance companies on the pricing or the provision of insurance products.
The EU framework for insurance expressly prohibits Member States adopting rules which require the prior approval or systematic notification of certain matters, including general and special policy conditions and scales of premiums. Furthermore, the EU framework provides non-life insurers with the freedom to set premiums.
Insurance companies consider a number of risks when determining the premium for a proposed insurance policy, whether that is a general insurance policy such as motor or home insurance, or a life assurance policy. A premium is based on the actuarial calculation of risk.
Insurance Ireland has informed me that motor insurers make their own individual decisions on whether to offer cover and what terms to apply. They use a combination of rating factors in doing this, such as the age of the driver, the type of car, claims record, driving experience, number of drivers, how the car is used, etc. Insurers do not all use the same combination of rating factors, prices vary across the market and consumers are free to choose.
As stated earlier the ability of the Government to influence insurance pricing is limited but, that does not preclude the Government from introducing measures that may, in the longer term, lead to a better claims environment that would facilitate a reduction in claims costs.
My Department has embarked on a review of the insurance sector which is being undertaken in consultation with the Central Bank and other Departments and Agencies. The objective of the Review is to recommend measures to improve the functioning and regulation of the insurance sector.
The Review of Policy in the Insurance Sector will continue over the coming months and is expected to be completed by the end of this year.
Finally, in the event that a person is unable to obtain a quotation for motor insurance or feels that the premium proposed or the terms are so excessive that it amounts to a refusal to give them motor insurance, they should contact Insurance Ireland (telephone 01 6761820) quoting the Declined Cases Agreement. Under this Agreement, the Declined Cases Committee of Insurance Ireland deals with cases of difficulty in obtaining motor insurance.
