Written Answers Nos. 80 - 85
80. Deputy Seamus Healy asked the Minister for Finance to amend the regulations on eligibility under the primary medical certificate scheme, given that they are excessively prohibitive; and if he will make a statement on the matter. [16139/16]
View answerThe Disabled Drivers and Disabled Passengers (Tax Concessions) Scheme provides relief from VAT and VRT (up to a certain limit) on the purchase of an adapted car for transport of a person with specific severe and permanent physical disabilities, payment of a fuel grant, and an exemption from Motor Tax.
To qualify for the Scheme an applicant must be in possession of a Primary Medical Certificate. To qualify for a Primary Medical Certificate, an applicant must be permanently and severely disabled within the terms of the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994 and satisfy one of the following conditions:
- be wholly or almost wholly without the use of both legs;
- be wholly without the use of one leg and almost wholly without the use of the other leg such that the applicant is severely restricted as to movement of the lower limbs;
- be without both hands or without both arms;
- be without one or both legs;
- be wholly or almost wholly without the use of both hands or arms and wholly or almost wholly without the use of one leg;
- have the medical condition of dwarfism and have serious difficulties of movement of the lower limbs.
The Senior Medical Officer for the relevant local Health Service Executive administrative area makes a professional clinical determination as to whether an individual applicant satisfies the medical criteria. A successful applicant is provided with a Primary Medical Certificate, which is required under the Regulations to claim the reliefs provided for in the Scheme. An unsuccessful applicant can appeal the decision of the Senior Medical Officer to the Disabled Drivers Medical Board of Appeal, which makes a new clinical determination in respect of the individual. The Regulations mandate that the Medical Board of Appeal is independent in the exercise of its functions to ensure the integrity of its clinical determinations. After six months a citizen can reapply if there is a deterioration in their condition.
The Scheme represents a significant tax expenditure. Between the Vehicle Registration Tax and VAT foregone, and the repayment of excise on fuel used by members of the Scheme, the Scheme represented a cost of €50.3 million to the Exchequer in 2015, an increase from €48.6 million in 2014. These figures do not include the revenue forgone to the Local Government Fund in the respect of the relief from Motor Tax provided to members of the Scheme.
I understand that there are sympathetic cases of individuals that do not come within the remit of the Scheme. Furthermore I recognise the important role that the Scheme plays in expanding the mobility of citizens with disabilities. I have managed to maintain the relief at current levels throughout the crisis despite the requirement for significant fiscal consolidation. Unfortunately, the current context is still one of constrained resources. I have no plans to expand the medical criteria beyond the six currently provided for in the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994.
81. Deputy Bernard J. Durkan asked the Minister for Finance if Irish interests in the manufacturing and services sectors are adequately safeguarded through the mechanism of the Irish knowledge development box; and if he will make a statement on the matter. [16318/16]
View answerThe purpose of the Knowledge Development Box is to encourage companies to develop intellectual property and thereby engage in substantive R&D operations that have a positive impact on the Irish economy.
It is recognised internationally that investment and growth in OECD economies is increasingly driven by knowledge-based investment, which is related to research and development and intellectual property. Putting in place an attractive tax offering for developing and commercially exploiting intellectual property is therefore important to encourage companies to develop their knowledge-based capital in Ireland, and for our continued success in attracting foreign direct investment into Ireland.
The Knowledge Development Box is the first incentive of its kind in the world to meet the OECD's 'modified nexus' standard. These rules were agreed as part of the BEPS (or Base Erosion and Profit Shifting) Project and were subsequently approved by the EU. They seek to align taxing rights with the location of substantive operations which is consistent with the overall approach to corporation tax in Ireland, as we seek to attract both foreign direct investment, and also support indigenous Irish companies.
I am confident that the Knowledge Development Box legislation strikes the appropriate balance between ensuring Ireland's corporation tax policy remains competitive while complying with accepted international principles, and that this puts Ireland in a unique position to offer long-term certainty to innovative industries who are planning their research and development investments.
I therefore view the Knowledge Development Box as a potentially positive measure for all sectors in Ireland.
82. Deputy Bernard J. Durkan asked the Minister for Finance his plans to ensure the protection of jobs and job opportunities through a 12.5% corporation profit tax or equivalent; and if he will make a statement on the matter. [16319/16]
View answerAt 12.5%, Ireland has one of the most competitive headline corporate tax rates in the OECD. This rate is applied to a broad base, a policy which is endorsed by the likes of the OECD as it is good for growth in our economy.
Our competitive rate of corporation tax has been an important part of our industrial policy since the 1950s, and has attracted real and substantive operations to Ireland since then. Ireland has not been and will never be a brass-plate location. We only have and want real substantive FDI, the kind that brings real jobs and investment into Ireland.
In 2014 the Department of Finance published the Economic Impact Assessment of Ireland's Corporation Tax Policy. This contained the results of extensive research which was carried out and commissioned by the Department of Finance which sought to quantify the effect of corporation tax policy on the Irish economy.
As part of this project, the Economic and Social Research Institute ('ESRI') were commissioned to carry out a study into the impact that the corporation tax rate has on the decision of firms to invest in Ireland. This independent research found if the rate had been higher over the period of their sample then the number of new foreign investments into Ireland would have been lower.
Another paper, titled Literature Review of the Economic impacts of Corporation Tax highlighted research by the OECD and others that point to the importance of low corporate tax rates to encourage economic growth.
The maintenance of the standard 12.5% rate of corporation tax is therefore extremely important for Ireland's economy. Ireland, like other smaller member states, is geographically and historically a peripheral country in Europe. A competitive corporate tax rate is a tool to address the economic limitations that come with being a peripheral country, as compared to larger core countries. Ireland's 12.5% corporation tax rate plays an important role in attracting FDI to Ireland and thereby increasing employment here.
This evidence underpins the Government's continued commitment to the 12.5% rate.
83. Deputy Michael McGrath asked the Minister for Finance if there is flexibility in terms of the value added tax charged to the end consumer in the case where a retailer is selling age appropriate clothes for children but of a size that is beyond the threshold for zero rating; the clothes size thresholds that apply for zero rating; and if he will make a statement on the matter. [16161/16]
View answerThe VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. The zero rate of VAT applies to the supply of articles of children's personal clothing not exceeding the size appropriate to children of average build of 10 years of age. Certain items of children's clothing are excluded from the application of the zero rate and remain taxable at the standard rate of VAT.
In the practical administration of the measure, the zero rating applies to children's clothing of sizes up to and including 32" chest or 26" waist. Where the size thresholds are exceeded, the zero rating cannot be applied to the clothes. These sizes were determined in 1984 after consultation with clothing and footwear trade interests at both manufacturing and distribution levels.
Ireland's application of the zero rate of VAT to children's clothing derives from the derogation under Article 110 of the EU VAT Directive. Under that provision Ireland may retain the zero rate on goods and services which were in place on 1 January 1991. EU VAT law precludes Ireland from extending the zero rate to new goods or services as this would increase the divergence of VAT rates among the Member States. It is not therefore possible to extend the application of the zero rate by raising the age limit of children to whom the zero rate could apply in respect of articles of clothing.
However, if there were satisfactory evidence that average clothing sizes for 10 year olds has changed since 1984, then Revenue could review the matter and adjust them if warranted.
84. Deputy Jackie Cahill asked the Minister for Finance the number of vacancies in the Office of the Revenue Commissioners in Nenagh, County Tipperary, by grade; his plans to fill these vacancies; if he will engage in a recruitment programme; when he will provide the details; and if he will make a statement on the matter. [16268/16]
View answerThe deployment of Revenue staff is a matter for the Revenue Commissioners.
Revenue reviews its business and staff resource requirements in all locations on an on-going basis as part of its workforce planning. This is an iterative process that looks to identify and address critical posts that may require to be filled in the future.
I am advised by Revenue that the range of duties and responsibilities carried out in the Nenagh office have undergone some changes in the last six months. One of the purposes of the changes is to increase the range of job types to increase the opportunities for overall staff development across the range of tax and customs duties.
There are currently 255 whole time equivalents representing 282 staff serving in the Nenagh office. This is in line with the numbers serving over the last number of years.
The overall numbers in any Revenue location are subject to on-going fluctuations due to retirements, promotions and transfers. I am informed that there are no significant levels of vacancies in Nenagh other than those that arise in the normal way and there are no plans to run a Nenagh specific recruitment campaign.
85. Deputy Jim Daly asked the Minister for Finance to clarify an issue (details supplied) on the late payment of the local property tax; and if he will make a statement on the matter. [16284/16]
View answerSection 38 of the Finance (Local Property Tax) Act 2012 (as amended) provides for a 10% surcharge (penalty) on self-assessed Income Tax/Capital Gains Tax liabilities where there is non-compliance with LPT filing and payment obligations. The surcharge is in addition to the actual LPT liability but will be reduced to equal the LPT liability where the property owner files the return and pays the amount due. The surcharge does not apply to employees or pension recipients as any arrears of LPT are automatically deducted from their payments over the course of the year in question.
Having regard to the particular circumstances of the case in question, including the relatively small amount involved and the fact that the person is now fully compliant with his LPT obligations, Revenue has confirmed that the surcharge in question will be removed.
