Written Answers Nos. 242-269
242. Deputy David Cullinane asked the Minister for Finance if his attention has been drawn to the fact that the Comptroller and Auditor General does not have the resources that would allow it give the Committee of Public Accounts the reassurance that every public-private partnership project delivers value for money; and if he will make a statement on the matter. [24987/16]
View answerThe C&AG is statutorily charged with auditing Government expenditure through annual audits of accounts of government departments and public bodies. He may also examine services and programmes from a value for money perspective in accordance with Section 9 of the Comptroller and Auditor General (Amendment) Act 1993.
In undertaking this work he determines areas for examination at his discretion and bearing in mind the resources allocated to him to undertake this role. Under Section 8.1 of the Ministers and Secretaries Amendment Act 2011, the Minister for Public Expenditure and Reform determines the final allocation of resources to be presented to the Oireachtas for consideration in Voted Estimates.
Following a request from the Department of Public Expenditure and Reform, in relation to the formulation of expenditure proposals for the three year period 2017 2019, I understand that the C&AG has not sought an increase in resources for 2017. However, he has signalled, that an increase in resources thereafter may be required to meet the demands and challenges in relation to resourcing the Office's reporting programme. The C & AG expects to devise proposals for resources next year in the context of the comprehensive review of expenditure and considerations set out in the Office's recent strategy statement.
243. Deputy Pearse Doherty asked the Minister for Finance the effect on gross domestic product or likely effect of the move by a company (details supplied) to domicile here; and if he will make a statement on the matter. [24988/16]
View answer244. Deputy David Cullinane asked the Minister for Finance in view of the exceptional increase in gross domestic product, GDP, in 2015 due to asset transfers with no discernible impact on the real economy, the effect on GDP figures of the recent announcement by a company (details supplied) that it plans to shift €30 billion in assets to Ireland; if his Department expects any more announcements of multi-billion euro asset transfers to Ireland; if so, the effect his Department expects them to have on GDP and GNP figures; and if he will make a statement on the matter. [24992/16]
View answerI propose to take Questions Nos. 243 and 244 together.
I will not comment on company specific developments.
On the more general point, it is clear that Irish economic aggregates i.e. GDP and GNP, have been heavily influenced by corporate restructuring and a number of balance sheet reclassifications in recent years.
In particular, beginning in 2008 a number of large multinational corporations have re-located their corporate headquarters to Ireland. These companies are regularly referred to as "re-domiciled PLCs". Typically, this does not involve the shift of substantive activity to Ireland. However, it does mean that corporate profits on worldwide activity are recorded as an income inflow. This has the effect of increasing GNP/GNI and increasing the current account in the balance of payments. However, it has no impact on GDP.
On the other hand, if a multinational corporation chose to relocate its intangible assets to Ireland, the capital stock of the economy would increase. This would have a positive impact on headline GDP. However, this would not have a direct bearing on employment and wealth creation for Irish citizens unless the relocation was linked to an increase in substantive activity in Ireland.
It is important to stress that Irish GDP/GNP statistics are produced to meet required international standards and that these activities are correctly included in Ireland's National Accounts and Balance of Payments statistics under the standards set by the UN, the IMF, Eurostat and the ECB.
Finally, given the globalised nature of the Irish economy and the importance of multinational corporations, it is important to stress that Ireland's economy is highly complex and activity is more volatile than elsewhere. From a policy perspective, the best way to mitigate risks associated with this volatility and complexity is through prudent management of the public finances and by adopting competiveness-oriented policies. That is what the Government will continue to do.
245. Deputy David Cullinane asked the Minister for Finance the amount of the corporation tax overpayments announced to date in 2016 his Department expects will be reclaimed later in 2016; and if he will make a statement on the matter. [24993/16]
View answerAt the time of the publication of the 2016 Stability Programme Update (SPU), I indicated that around €300 million of the then over-performance recorded in corporation tax could be attributed to a number of large unexpected payments from a small number of companies. This was based on provisional information furnished to the Revenue Commissioners at the time of the SPU. I also pointed out that these payments may be repaid over the course of the year.
Overpayments of preliminary tax can result in subsequent repayments or alternatively in situations where the overpayments can be offset against future preliminary tax payments. Instances where companies may overpay preliminary tax can arise due to a broad range of reasons. However, the main reason for overpayments of preliminary tax is that companies must estimate their expected profits before the end of accounting period when calculating preliminary tax. For example, for companies with a tax liability not exceeding €200,000, in the previous accounting period, preliminary tax is payable in one instalment 31 days before the end of the accounting period. However, Finance (No.2) Act 2008 provides for the payment of preliminary tax by large companies with a tax liability of more than €200,000, in the previous accounting period, in two instalments, payable in the sixth month of the accounting period and in the eleventh month of the accounting period.
Profits may deviate from forecasts for a number of reasons, if for example trading conditions improve or a company's circumstances change.
Finally, I am informed by Revenue there is no basis on which to estimate the final amount by which corporation tax preliminary tax may be overpaid in the current year or when it may be reclaimed. On occasion, Revenue case managers become aware of issues that lead to repayments and this is shared, without revealing the identity of the particular companies affected, with my Department to assist with forecasting and Exchequer reporting.
246. Deputy Tom Neville asked the Minister for Finance the total service charge for the Revenue Commissioners on credit card payments, that is, persons who paid the Revenue Commissioners money due by using credit cards for 2012, 2014, 2015 and 2016 to date. [25004/16]
View answerSection 960EA of the 1997 Taxes consolidation Act provides for the payment of tax using certain prescribed payment methods, including credit cards. Section 960EA also stipulates that the transaction costs required by the necessary service providers, i.e. the merchant acquirer and the technical connection support, can be passed to the taxpayer. This is consistent with the approach adopted by other Revenue administrations.
Revenue currently applies a transaction fee of 1.1% to all tax payments made by credit card. The fee was until very recently (July 2016) administered under the terms of a Local Government Management Agency (LGMA) agreement with service providers in respect of Public Sector payments (not just Revenue payments). The fee covers the service providers' costs only and Revenue does not gain any financial advantage from the charge. The terms of the LGMA's agreement with the service providers allowed for a reduction in cost depending on the volume and value of transactions processed. This facilitated a reduction in fees from 1.49% to 1.1% in October 2014.
Since July 2016 Revenue is operating its credit card payment option under the terms of a new Public Service level contract, which was negotiated with the relevant service providers by the Office of Government Procurement. The new contract also facilitates reductions in transaction fees based on value and volume and Revenue is optimistic that further reductions to the 1.1% rate can be achieved in the short to medium term.
The following table sets out the total number of credit card payments and transaction charges for 2012 to 2016 (year to date).
|
Year |
Transactions |
Charges |
|
2012 |
9,084 |
€166,447.95 |
|
2013 |
301,674 |
€1,006,805.14 |
|
2014 |
119,096 |
€635,721.58 |
|
2015 |
120,682 |
€605,099.20 |
|
2016(YTD) |
63,147 |
€301,209.37 |
|
Total |
613,683 |
€2,715,283.24 |
247. Deputy Pearse Doherty asked the Minister for Finance the number of persons availing of mortgage interest relief in each of the following categories and the number of persons who exceed the ceilings in each of the categories: single person, first-time buyer who bought in the years 2004 to 2009; single person, first-time buyer who bought in the years 2010 to 2012; and single person, non-first time buyers; and if he will make a statement on the matter. [25054/16]
View answer248. Deputy Pearse Doherty asked the Minister for Finance the number of persons availing of mortgage interest relief in each of the following categories: and the number of persons who exceed the ceilings in each of the categories: married/in a civil partnership/ widowed/surviving civil partner person, first time buyer who bought in the years 2004 to 2009, married/in a civil partnership/ widowed/surviving civil partner person, first time buyer who bought in the years 2010 to 2012, and married/in a civil partnership/ widowed/surviving civil partner person, non-first time buyers [25055/16]
View answerI propose to take Questions Nos. 247 and 248 together.
I am advised by the Revenue Commissioners that the following tables provide the number of persons availing of mortgage interest relief in the various categories requested by the Deputy. The total number of persons is 520,841 (based on 334,709 loan accounts). The first time buyer figures refer to those who were first time buyers in the year they bought the properties.
|
|
First Time Buyers |
First Time Buyers |
Non-First Time Buyers |
|
Mortgage Interest Relief |
Purchase Year |
Purchase Year |
Purchase Year |
|
|
2004-2009 |
2010-2012 |
2004-2012 |
|
Single person |
148,465 |
22,938 |
49,143 |
|
Single person, who exceed the ceilings |
59,624 |
2,139 |
26,367 |
|
Married/Civil Partnership |
103,345 |
14,710 |
163,192 |
|
Married/Civil Partnership, who exceed the ceilings |
29,291 |
1,527 |
47,363 |
|
|
|
|
|
|
Widowed/ Surviving Civil Partner |
603 |
69 |
1,096 |
|
Widowed/ Surviving Civil Partner, who exceed the ceilings |
81 |
6 |
193 |
|
|
|
|
|
|
Separated/Divorced or Dissolved Civil Partnership |
5,178 |
583 |
11,519 |
|
Separated/Divorced or Dissolved Civil Partnership, who exceed the ceilings |
1,676 |
59 |
4,510 |
Mortgage interest relief has expired for qualifying mortgages taken out prior to 2004, and no new mortgages taken out since January 2013 have qualified for the relief.
249. Deputy Peadar Tóibín asked the Minister for Finance the amount of tax earned from the taxation of pensioners' Christmas bonuses each year. [25063/16]
View answerI am advised by the Revenue Commissioners that the information from income tax returns is not recorded in such a way to provide an estimate of the separate amount of income tax collected from the taxation of pensioners' Christmas bonuses. It should be noted that where an individual's sole income is derived from a pension payable by the Depeartment of Social Protection, he or she would not normally be liable to pay income tax or USC.
250. Deputy Michael McGrath asked the Minister for Finance the position in relation to ability of financial institutions to provide credit to a person who is in an insolvency arrangement; if banks have discretion in this matter; if it makes any difference if the person has reached a settlement and is now out of an insolvency arrangement; and if he will make a statement on the matter. [25081/16]
View answerUnder the Personal Insolvency Acts 2012 to 2015, it is an offence for a person who is subject to a Debt Relief Notice ("DRN"), a Debt Settlement Arrangement ("DSA") or a Personal Insolvency Arrangement ("PIA") to seek to obtain credit of more than €650 without informing the creditor that they are a specified debtor. The Act does not prohibit the granting of credit to such persons.
However, the granting of credit to a person in an insolvency arrangement or who has completed one, is a commercial decision for each lender institution concerned. This decision must also safeguard the interests of the borrower and the Deputy will be aware that there are a number of legislative provisions in place to ensure that a lender properly assesses the ability of the borrower to repay the debt.
The person concerned may wish to make a formal complaint regarding this matter to the bank in question and the Central Bank's Consumer Protection Code 2012 sets out timeframes within which a regulated entity must respond to complaints. If a customer has made a formal complaint to the financial service provider in question and is not satisfied with the outcome, I would suggest that they make a complaint to the Financial Services Ombudsman who may investigate a failure or refusal to provide a service. Investigations by the Financial Services Ombudsman are free of charge to the customer.
If the person is a business, the Credit Review Office may be able to assist. The Office helps SME or farm borrowers who have had an application for credit of up to €3 million declined or reduced by the main banks, and who feel that they have a viable business proposition. They also examine cases where borrowers feel that the terms and conditions of their existing loan, or a new loan offer, are unfairly onerous or have been unreasonably changed to their detriment. This is a strictly confidential process between the business, the Credit Review Office and the bank. The Credit Reviewer and his team have overturned more than 50% of the refusals that have been appealed to the Office. Further details are available at www.creditreview.ie.
251. Deputy Paul Murphy asked the Minister for Finance if he will consider a review of regulations regarding motor insurance in view of the practice of many motor insurance companies denying coverage to cars over ten years or older; and if he will make a statement on the matter. [25118/16]
View answer282. Deputy Jan O'Sullivan asked the Minister for Finance the actions he proposes to take to stop the spiralling cost of motor insurance here; and if he will make a statement on the matter. [25438/16]
View answerI propose to take Questions Nos. 251 and 282 together.
The Cost of Insurance Working Group, chaired by Minister of State Eoghan Murphy TD, is undertaking a review of the factors which are influencing the increased cost of motor insurance. This review will include the issue of insurance companies denying coverage to cars over 10 years or older.
The Working Group brings together all the relevant Departments and Offices involved with the process. Its objective is to identify immediate and longer term measures which can address increasing costs, while bearing in mind the need to maintain a stable insurance sector.
The core areas to be examined by the Working Group in this first phase are:
- The motor insurance sector generally, at present and in recent years
- The effects of legal costs and litigation processes on insurance costs
- The current claims compensation arrangements and the cost of claims
- Insurance data and information
- The impact of accident rates
- The impact of unlawful activity on the insurance sector, and
- Other market issues
A number of additional issues which impact upon consumers and the business sector in relation to motor insurance are also being considered. These include:
- The lack of a link between the National Car Test and the availability of insurance,
- Insurance costs for young drivers, and those over 65,
- The case for rural dwellers with no public transport to have car insurance at a reasonable cost,
- The issue of returning immigrants having difficulty obtaining car insurance,
- The cost of insurance to taxi drivers, hackneys and hauliers.
- The issue of insurance companies denying coverage to cars over 10 years or older.
Because the issue of the cost of insurance is complex and in order to get to the heart of these issues as soon as possible, Minister of State Eoghan Murphy has established four sub-groups to review them in detail. Chairs have been appointed to these sub-groups and work has already commenced. The sub-groups will be holding their second meeting in the coming days and it is proposed that they meet regularly. The outputs of these sub-groups will feed into the meetings of the Working Group.
The Working Group has held two meetings to date, on 20th July and 1st September. It will hold its third meeting on 15th September. Further meetings are scheduled for every two to three weeks to the end of 2016.
The consultation process has commenced. Minister of State Murphy has had informal meetings with representatives from a number of key stakeholders including: Insurance Ireland, AA Ireland, the Irish Brokers Association, the Injuries Board, IBEC, FBD Insurance, and the Central Bank of Ireland.
The Working Group and the four sub-groups will also meet with the relevant stakeholders. At its meeting this week, the Working Group will meet with representatives from the Law Society, AA Ireland, and possibly a couple of other relevant stakeholders depending on their availability. In addition, submissions received from all interested parties will be considered as part of the process.
By the end of October, the Working Group will provide me with an update report which will set out the priority actions required. From November to December, the Working Group will put develop an action plan to enable the relevant Government Departments and Offices to commence the implementation of these priority actions. In this regard, the Chair will be consulting regularly with Government colleagues.
252. Deputy Pearse Doherty asked the Minister for Finance his views on whether the EU Commission should adopt a four-year potential output forecast horizon for reasons outlined in documents (details supplied); if Ireland has given any view on this issue at ECOFIN or any other EU institutional meeting; and if he will make a statement on the matter. [25161/16]
View answerWork is continuing at European level to improve the predictability and stability of the agreed methodology used to calculate potential output. As part of this, the merit of extending the forecast horizon applied by the European Commission when implementing this methodology, from two years, as current practice dictates, to four years, is currently under review. At present, the three and four year ahead forecasts are determined soley by mechanical rules. Effectively, this proposal places greater weight on judgemental as opposed to such purely mechanical estimates for three and four-year ahead forecasts.
Discussion on this issue are continuing at technical level in the Output Gap Working Group, which is a sub-group of the Economic Policy Committee. At this stage, consensus across a range of technical aspects remains to be achieved.
At a technical level my Department is broadly in favour of the proposal. Adopting this proposal would ensure consistency across Member States' application of the methodology. As a result, greater ex-ante certainty around the evaluation of public finances could be achieved. In this context, it should be noted that my Department's three and four year-ahead forecasts are in line with the current practice approach used by the Commission. Consequently, differences in estimates of the structural balance due to horizon mismatch between my Department and the Commission has not arisen. In contrast, a discrepancy between how other Ministries and the Commission apply this methodology motivated the 8 signatories of the 18 March letter addressed to Vice President Dombrovskis and Commissioner Moscovici.
An extension of the forecast horizon used by the Commission would also have the added benefit of improving how structural reforms are assessed. However, there are also drawbacks to a longer time horizon. These warrant careful consideration and include difficulties associated with producing accurate economic forecasts at longer time-horizons, and the increased scope for introducing bias into the forecasts.
My officials continue to engage at technical level along the above lines on these important issues. Furthermore, the Chief Economist of my Department is chair of the Output Gap Working Group where these technical discussions are taking place.
My Department will continue to advocate for improvements in the harmonised methodology and will continue to engage constructively in ongoing discussions on this and other relevant technical issues.
253. Deputy Pearse Doherty asked the Minister for Finance the State's policy regarding the remaining bailout funds and the possibility of exchanging or rolling these debts over to maximise the advantage of the current very low interest rates; and if he will make a statement on the matter. [25206/16]
View answerThere is limited scope for additional interest savings resulting from further early repayment of EU-IMF programme loans.
Unlike in the case of the early IMF repayment of late 2014 and early 2015, Ireland would be subject to a break-cost charge were it to repay some of the other loan facilities early. These charges could negate any potential savings arising from a potential early repayment.
In addition, the early repayment of programme loans to the IMF, EFSF, EFSM, United Kingdom, Sweden or Denmark would also trigger automatic mandatory proportional early repayments to each of the other programme funding partners unless, as was the case with the IMF early repayment, the other lenders agreed to waive the mandatory proportional early repayment clause. A condition of the agreement to waive this clause in the case of the early IMF repayment was that Ireland retains a significant element of IMF funding in order to maintain the IMF's participation in post-programme monitoring for the duration initially envisaged, which is out to 2021.
It is important to point out that, while Ireland along with other euro area countries, is currently experiencing historically low interest rates on new borrowings, the vast majority of our EU-IMF borrowings are either at fixed interest rates or are less expensive on a like-for-like basis. Therefore, there would be no immediate saving notwithstanding the points raised earlier in this answer. For example, the two main lenders, EFSF and EFSM have higher credit ratings than Ireland which means they can borrow at less expensive interests rates compared to Ireland. We receive these monies at cost.
My Department, in conjunction with the National Treasury Management Agency (NTMA), will always seek to avail of any appropriate opportunity for savings on the cost of our EU-IMF programme loans and the matter is being kept under ongoing review.
254. Deputy Sean Fleming asked the Minister for Finance the risk assessment process that was carried out prior to section 110 of the Tax Consolidation Acts being introduced and establishing the level of assessment that was carried out regarding the potential use of section 110 and the consequent reduction of revenue to the State; and if he will make a statement on the matter. [25209/16]
View answerThe securitisation regime was introduced as part of the IFSC regime in 1999. The Section 110 regime in its current form was inserted by Section 48 Finance Act 2003 and applies to all transactions entered into on or after the 6th February 2003. Section 110 was introduced primarily to facilitate the securitisation of loan books by banks. Therefore, section 110 was designed to provide a tax neutral vehicle for the securitisation of mortgages.
In terms of the level of risk assessment undertaken, a Tax Strategy Group paper was prepared for the Tax Strategy Group Meeting in 2002 prior to the insertion of section 110 into the Taxes Consolidation Act 1997 in its current form.
The Tax Strategy Group is an interdepartmental committee chaired by the Department of Finance, with membership comprising senior officials and advisors from the Departments of Finance, Taoiseach, Jobs, Enterprise and Innovation, Social Protection and the Revenue Commissioners. Papers on various options for the Budget and for the medium and longer term are prepared for the Tax Strategy Group. Its terms of reference are as follows:
To examine and develop proposals for measures in the areas of taxation, PRSI and levies, for Budget and Finance Bill within agreed Government parameters for the overall Budget position and in the context of the framework of a medium term and longer term strategy set out in the Government's programme; and
To examine the strategic approach for a general social welfare package and to assess the interaction of income tax/PRSI/levies proposals with social welfare proposals including child income support, and in particular the impact of this interaction on the labour market and income distribution.
It was in this context that the formal introduction of section 110 in its current form would have been discussed and evaluated at that time.
255. Deputy Michael Healy-Rae asked the Minister for Finance his views on a matter (details supplied) regarding the Disability Federation of Ireland pre-budget submission; and if he will make a statement on the matter. [25242/16]
View answer302. Deputy Michael Healy-Rae asked the Minister for Finance the status of a pre-budget submission (details supplied); and if he will make a statement on the matter. [25714/16]
View answerI propose to take Questions Nos. 255 and 302 together.
My Department has so far received in the order of 200 Pre-Budget Submissions from a wide range of groups and individuals. These are being considered by the relevant officials in the context of Budget and Finance Bill preparation. I can confirm that a submission from the Disability Federation of Ireland has been received. However, as the Deputy will be aware, it is not the practice of the Minister for Finance to discuss the details of measures which may be under consideration as part of the Budget and Finance Bill.
256. Deputy Pearse Doherty asked the Minister for Finance if he will provide a comparative table showing tax take, expenditure and investment that is capital spend as a percentage of gross domestic product, GDP, before the most recent GDP figures as published by the Central Statistics Office and after; and if he will make a statement on the matter. [25264/16]
View answerThe 2015 National Income and Expenditure data published in July 2016 by the CSO revised Ireland's 2015 GDP level from €214,623m (Quarterly National Accounts March 2016) to €255,815m. Estimates of tax take, public expenditure and public capital investment are taken from the CSO Government Income & Expenditure release July 2016. The data requested by the Deputy are in tabular form below.
|
Details |
Taxes |
Total expenditure |
Gross domestic fixed capital formation* |
|
|
€million |
€million |
€million |
|
Government Income & Expenditure 2015 |
50,736 |
75,243 |
4,346 |
|
2015 Gross Domestic Product - March 2016 |
214,623 |
214,623 |
214,623 |
|
% of GDP March 2016 |
23.6% |
35.1% |
2.0% |
|
2015 Gross Domestic Product - July 2016 |
255,815 |
255,815 |
255,815 |
|
% of GDP July 2016 |
19.8% |
29.4% |
1.7% |
Source: Central Statistics Office
* Gross domestic fixed capital formation does not include approximately €690m of Voted Capital expenditure such as Capital Grants that are not considered government investment in National Accounts. €690m represents c.0.32% of 2015 GDP (March 2016) or c.0.27% of 2015 GDP (July 2016).
257. Deputy Pearse Doherty asked the Minister for Finance if he will provide for each bank the State has a share in, the number of cases being investigated by the bank as part of its review into the sale of tracker mortgages; when each bank will conclude its investigation; and if he will make a statement on the matter. [25272/16]
View answer258. Deputy Pearse Doherty asked the Minister for Finance with regard to the tracker mortgage investigations being undertaken by banks if he will provide, for each State-backed bank, the number of cases where the bank has admitted it was at fault; the number of these cases where the bank has made a redress arrangement with the mortgage owner; the number of legal cases being taken overall per bank; the number within those who have availed of a redress scheme where legal action against the bank has begun or concluded; and if he will make a statement on the matter. [25273/16]
View answerI propose to take Questions Nos. 257 and 258 together.
As the deputy is aware, the Central Bank of Ireland announced in October 2015 that it would conduct a detailed review of Tracker Mortgage portfolios with all the banks under its supervision. The Central Bank sought to conduct a broad examination of tracker mortgage-related issues covering, among other things, transparency of communications with and contractual rights of tracker mortgage borrowers.
This review is now underway, and the Central Bank is working with the banks to conduct a comprehensive examination of customer mortgage accounts with regard to tracker rates, including any instances where banks may have failed to deliver on their obligations to customers. Such instances may include cases where the bank was not sufficiently clear with customers on their terms and conditions, or where they have failed to honour contractual commitments.
The Central Bank has laid out a detailed and rigorous process for each institution to follow. The identification of affected customers, implementation of any appropriate rectification actions, as well as the calculation of any appropriate interest redress or compensation, are all processes currently being worked through by the banks. The review also involves oversight of each bank's work by an independent third party, and the establishment of an independent appeals process. Further, the Central Bank continues to review and monitor each institution's progress at every stage. It is possible that different banks will progress through the review process at different speeds.
I expect that the Central Bank, and each of the institutions involved, will provide information periodically on steps taken and progress made. The tracker mortgage review is an ongoing process involving the banks, their regulator and any affected customers; I have no direct role in its implementation. It is therefore not possible, nor appropriate, for me to speculate at this time on the number of customers that may be affected.
For completeness, I have requested a brief update from each of the banks in which the State is a shareholder:
AIB
"AIB is conducting a comprehensive review of customer mortgage accounts with regard to tracker rates. AIB s review which is progressing, has found the bank fell short on its obligations to some customers. In order to prevent further detriment for the customers identified to date, AIB has in the first instance begun correcting interest rates on these accounts and writing to customers to outline their new interest rates and repayment amounts.
As the review progresses, AIB will later in the year commence refunding customers who overpaid interest and will also pay compensation. At that point, details of a set payment towards the cost of independent professional advice will also be made available to customers and the bank will have established an independent appeals process. An independent third party, KPMG, will review key aspects of AIB s work. These steps are in line with the principles outlined by the Central Bank.
The overall review will take some time to complete and other customers may be identified through this ongoing process. AIB has put in place a customer Freephone Helpline 1800 235 460 (Mon-Fri, 8:00am-7:00pm) to assist with any queries its customers may have."
PTSB
"Permanent TSB is co-operating fully with the industry-wide review of Tracker Mortgages initiated by the Central Bank of Ireland.
The bank has established a special project team to undertake this exercise and appropriate external advisers to support the project and to provide independent oversight of the project.
At this stage it is premature to speculate on the potential number of cases which may be identified through this exercise or what action might be required in respect of these cases.
This CBI led review is separate to the Mortgage Redress Programme undertaken by Permanent TSB in 2015, the results of which have been widely reported and discussed in previous PQs."
BOI"In 2015 the Central Bank of Ireland announced that it would conduct a Tracker Mortgage Examination with all lenders in Ireland. This examination is underway, and Bank of Ireland is co-operating fully with it."
259. Deputy Michael Healy-Rae asked the Minister for Finance his views on a matter (details supplied) regarding reports of future equalising of fuel here; and if he will make a statement on the matter. [25297/16]
View answerThe current rates of excise duty applying to auto-diesel is 47.9c per litre and to petrol is 58.7c per litre.
Tax Strategy Group papers are prepared by Department of Finance officials in advance of the group meeting to discuss various options with regard to tax. The papers provide information and background on the various tax heads together with revenues, trends and relevant topics of interest. The papers also present various options for the Budget and for the medium and longer term, for consideration.
One of the options included in the energy and environmental taxes paper this year was an option to equalise the excise duty rates applied to petrol and diesel. The paper outlined the background and rationale for such an option together with potential yields and other pros and cons. This is a normal part of the annual Tax Strategy Group process. However, it must be noted that all options are only presented by officials for discussion at the Group and are not, and do not purport to be, agreed Government policy.
It is a long standing practice that the Minister for Finance does not comment on measures which may or may not be included as part of the Budget.
260. Deputy Jim Daly asked the Minister for Finance if he will confirm all categories of industry, business and arts that are exempt from Income Tax. [25303/16]
View answerI am informed by the Revenue Commissioners that the Schedule set out below identifies those categories of persons who are entitled to an exemption from income tax and lists the corresponding legislative provision which provides for that exemption. It should be noted that there are limits to certain of the exemptions listed.
|
Description of persons entitled to income tax exemption |
Section of Taxes Consolidation Act 1997 |
|
Artists, writers, composers and sculptors in relation to profits or gains arising from certain original and creative works. |
Section 195 |
|
Qualifying trusts where the trust funds were raised by public subscriptions solely on behalf of individuals who are permanently and totally incapacitated from maintaining themselves. |
Section 189A |
|
Bodies established for charitable purposes in respect of certain income applied solely for charitable purposes, and the Charities Regulatory Authority. |
Section 207, 207A, 208 |
|
Any body of persons having consultative status with the United Nations Organisation or the Council of Europe with the sole or main object of promoting human rights, and which is precluded by its rules or constitution from providing any gifts or benefits, directly or indirectly, to any of its members. |
Section 209 |
|
The trustees of 'The Great Book of Ireland Trust' in respect of income arising to the trustees from the sale of the Great Book of Ireland; and related payments by the trustees to Clashganna Mills Trust Ltd or Poetry Ireland Ltd. |
Section 210 |
|
Certain friendly societies. |
Section 211 |
|
Registered trade unions meeting certain conditions in respect of certain interest and dividends applied solely for the purpose of paying provident benefits. |
Section 213 |
|
Local authorities, the Health Service Executive, vocational education boards and committees of agriculture. |
Section 214 |
|
A lottery licensed under the Gaming and Lotteries Act, 1956 in respect of the profits from any lottery. |
Section 216 |
|
Individuals in receipt of sums in respect of the letting, for residential purposes, of a room or rooms in their sole or main residence up to a specified limit. |
Section 216A |
|
Individuals in Gaeltacht areas in receipt of income in respect of students attending Irish colleges in those areas who are temporarily resident with such individuals. |
Section 216B |
|
Individuals in receipt of sums in respect of childminding services provided in their sole or main residence up to a specified limit. |
Section 216C |
|
The non-commercial state-sponsored bodies listed in Appendix 1 set out below in relation to income otherwise taxable under Schedule D Cases III, IV or V. |
Section 227 |
|
A body designated under section 4(1) of the Securitisation (Proceeds of Certain Mortgages) Act, 1995. |
Section 228 |
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Harbour authorities situate within the State in respect of income arising from the provision of harbour facilities and accommodation for vessels, goods and passengers. |
Section 229 |
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Persons to whom profits or gains arise from the occupation of woodlands in the State managed on a commercial basis. |
Section 232 |
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Any approved body of persons established for the sole purpose of promoting athletic or amateur games or sports in respect of all income that is or will be applied for such purposes. |
Section 235 |
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Certain long-term unemployed individuals who commence a new business in respect of profits or gains of the new business. |
Section 472AA |
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Investment undertakings in respect of its relevant income and gains. |
Section 739C |
Appendix 1
List of specified non-commercial state sponsored bodies for purpose of exemption from certain tax provisions
1. Agency for Personal Service Overseas;
2. Beaumont Hospital Board;
3. Blood Transfusion Service Board;
4. Board for Employment of the Blind;
5. An Bord Altranais;
6. An Bord Bia The Irish Food Board;
7. The National Tourism Development Authority;
8. An Bord Glas;
9. An Bord Iascaigh Mhara;
10. Bord na Gaeilge;
11. Bord na Leabhar Gaeilge;
12. Bord na Radharcmhastóirí;
13. An Bord Pleanála;
14. Bord Scoláireachtaí Comalairte;
15. An Bord Tráchtála The Irish Trade Board;
16. An Bord Uchtála;
17. Building Regulations Advisory Body;
18A. The Courts Service;
19. CERT Limited;
20. The Chester Beatty Library;
21. An Chomhairle Ealaíon;
22. An Chomhairle Leabharlanna;
22A. An Chomhairle Oidhreachta The Heritage Council;
23. Coiste An Asgard;
24. Combat Poverty Agency;
25. Comhairle na Nimheanna;
26. The Health Service Executive;
26A. Commission for Communications Regulation;
27. Cork Hospitals Board;
27A. A County Enterprise Board;
27B. The Credit Union Restructuring Board;
28. Criminal Injuries Compensation Tribunal;
29. Dental Council;
30. Drug Treatment Centre Board;
31. Dublin Dental Hospital Board;
32. Dublin Institute for Advanced Studies;
34. Economic and Social Research Institute;
35. Employment Equality Agency;
36. Environmental Protection Agency An Ghníomhaireacht um Chaomhnú Comhshaoil;
37. Eolas The Irish Science and Technology Agency;
38. Federated Dublin Voluntary Hospitals;
39. Fire Services Council;
39A. The Food Safety Authority of Ireland;
40. An Foras Áiseanna Saothair;
41. Forbairt;
42. Forfás;
43. The Foyle Fisheries Commission;
44. Garda Síochána Appeal Board;
45. Garda Síochána Complaints Board;
47. Health Research Board An Bord Taighde Sláinte;
47A. The Health and Social Care Professionals Council;
48. Higher Education Authority;
50. Hospitals Trust Board;
51. The Independent Radio and Television Commission An Coimisiún um Raidio agus Teilifís Neamhspleách;
52. The Industrial Development Agency (Ireland);
53. The Industrial Development Authority;
53A. The Institute of Public Health in Ireland Limited;
53AB. Inland Fisheries Ireland;
54. Institiúid Teangeolaíochta Éireann;
55. Institute of Public Administration;
55A. The Irish Auditing and Accounting Supervisory Authority;
56. The Irish Film Board;
57. The Irish Medicines Board;
57A. The Irish Sports Council;
58. The Labour Relations Commission;
59. Law Reform Commission;
60. The Legal Aid Board;
61. Leopardstown Park Hospital Board;
62. Local Government Computer Services Board An Bord Seirbhísí Ríomhaire Rialtais Áitiúil;
63. Local Government Staff Negotiations Board An Bord Comhchaibidlí Foirne Rialtais Áitiúil;
64. The Marine Institute;
65. Medical Bureau of Road Safety An Lia-Bhiúró um Shábháilteacht ar Bhóithre;
66. The Medical Council;
67. The National Authority for Occupational Safety and Health An tÚdarás Náisiúnta um Shábháilteachta agus Sláinte Ceirde;
68. National Cancer Registry;
69. The National Concert Hall Company Limited An Ceoláras Náisiúnta;
69A. National Consultative Committee on Racism and Interculturalism;
70. National Council for Educational Awards;
71. National Council for the Elderly;
72. The National Economic and Social Council;
73. The National Economic and Social Forum;
74. National Health Council;
74A. The National Milk Agency;
74AB National Qualifications Authority of Ireland;
76. National Rehabilitation Board;
77. The National Roads Authority An tÚdarás um Bóithre Náisiúnta;
78. National Safety Council Comhairle Sábháilteacht Náisiúnta;
79. National Social Services Board;
81A. Occupational Safety and Health Institute of Ireland;
82. Office of the Data Protection Commissioner;
83. The Pensions Board;
83A. The Personal Injuries Assessment Board;
83B The Pharmaceutical Society of Ireland;
84. Postgraduate Medical and Dental Board;
84A. The Private Residential Tenancies Board;
85. The Radiological Protection Institute of Ireland;
86. The Refugee Agency;
87. Rent Tribunal;
88. Royal Hospital Kilmainham Company;
89. Saint James's Hospital Board;
90. Saint Luke's and St Anne's Hospital Board;
91. Salmon Research Agency of Ireland Incorporated;
91A Science Foundation Ireland;
92. Shannon Free Airport Development Company Limited;
92A. The Sustainable Energy Authority of Ireland;
96. Tallaght Hospital Board;
96A. The Teaching Council;
97. Teagasc;
98. Temple Bar Renewal Limited;
98A. Tourism Ireland Limited;
99. Údarás na Gaeltachta.
261. Deputy Ruth Coppinger asked the Minister for Finance the amount that could be raised by applying the standard rate of VAT of 23% to financial services. [25340/16]
View answerThe supply of financial services is VAT exempt across all EU member countries in accordance with Article 135 of the EU VAT Directive. In order to impose VAT on financial services, this would require a change to the VAT Directive applicable to all Member States. Ireland could not make such a decision unilaterally.
I am informed by the Revenue Commissioners that the information provided to them on tax returns does not require a customer to split their turnover across different economic sectors or provide information on the types of transactions or activities provided to different sectors. Therefore it is not possible at present to identify the supplies that would potentially be liable to VAT on financial services or to estimate the potential for net yield if such services were charged to VAT at 23%.
262. Deputy Ruth Coppinger asked the Minister for Finance the amount that could be raised by applying a financial Activities Tax as proposed by the IMF. [25341/16]
View answerI take it the Deputy is referring to proposals made by the IMF in 2010.
In 2009 G20 Leaders requested the IMF to prepare a report on how the financial sector might contribute to meeting the costs associated with government interventions to repair the sector. The IMF's subsequent report proposed two forms of contribution from the financial sector, serving distinct purposes. The first of these was a "Financial Stability Contribution" (FSC) linked to a credible and effective resolution mechanism. The main component of the FSC would be a levy to pay for the fiscal cost of any future government support to the sector. In relation to any further desired contribution from the financial sector the IMF said it should be raised by a "Financial Activities Tax" (FAT) levied on the sum of the profits and remuneration of financial institutions, and paid to general revenue.
In its 2010 report to the G-20 the IMF suggested three forms of FAT. The IMF considered that the revenue potential of the various forms of FAT would differ across countries, depending on the relative size, profitability and wage structures of their financial sectors, and would be constrained by the need to apply low rates where the impact on competitiveness or the risk of avoidance were of concern. The IMF report indicated very broad orders of magnitude for the potential tax base of the suggested forms of FAT for the pre-crisis year 2006. In respect of Ireland, the broad orders of magnitude estimated for the base were 8.4% of GDP, 5.7% of GDP and 1.8% of GDP respectively for the three different forms of FAT in 2010 but the base is likely to be different now. The potential yield would of course depend on the tax rate applied. In the absence of further detailed work it would not be possible to estimate the amount to be raised by a FAT. There is no evidence that any state has adopted the FAT proposed by the IMF.
In Ireland we have a tax on financial transactions in the form of a Stamp Duty on transfers of shares in Irish incorporated companies. This currently stands at 1%. The yield from this charge in 2015 was €424.13 million and is estimated to yield €498 million in 2016.
The Financial Institutions Levy I announced as part of Budget 2014 is a revenue raising measure which provides for a contribution from the banking sector to Ireland's economic recovery. The levy is in place for the years 2014 to 2016 inclusive with an anticipated annual yield of €150 million. As the levy is a percentage of an institution's DIRT liability in 2011, liability to the levy relates to the size of an institution's Irish operation. The entire banking system has been underpinned by the strong Government support provided both here and abroad and I believe it is appropriate therefore that the banking sector should make a contribution to the State's economic recovery. Accordingly, I announced in my Budget 2016 statement that I propose to extend the levy out to 2021. This will bring in an additional €750 million over the period, which is a very significant additional contribution to the Exchequer.
263. Deputy Ruth Coppinger asked the Minister for Finance if he will provide a breakdown of the amount of USC that was raised annually for each year since its introduction from employees' wages, self-employed income, and unearned income such as rent, respectively and estimate the amounts likely to accrue from each in 2017, in tabular form. [25342/16]
View answer274. Deputy Ruth Coppinger asked the Minister for Finance the full year cost of abolishing the universal social charge in 2017. [25353/16]
View answer275. Deputy Ruth Coppinger asked the Minister for Finance the full year cost of abolishing the USC on employee wages in 2017. [25354/16]
View answer276. Deputy Ruth Coppinger asked the Minister for Finance the full year cost of abolishing the USC on single employee wages under €90,000 in 2017 and on couples earning less than €150,000. [25355/16]
View answerI propose to take Questions Nos. 263, 274, 275 and 276 together.
I am advised by the Revenue Commissioners that the amount of Universal Social Charge (USC) collected annually since its introduction in 2011 to 2015, from both PAYE and Schedule D Income Earners, is set out in the following table. It should also be noted that information on USC is classified based on a taxpayer's primary income source, being either PAYE income or Schedule D. Schedule D income includes both self-employed income and many sources of unearned income including rental income taxable under Schedule D Case V. Data is therefore not available in such a manner that enables a breakdown to be provided for the USC collected in the level of detail requested by the Deputy beyond the PAYE / Schedule D split as shown in the table below.
|
Year |
PAYE €M |
Schedule D €M |
|
2011 |
2,744 |
370 |
|
2012 |
3,367 |
423 |
|
2013 |
3,447 |
483 |
|
2014 |
3,171 |
476 |
|
2015 |
3,640 |
534 |
The estimated yield from USC for 2016 and 2017 is set out in the following table:
|
Year |
PAYE €M |
Schedule D €M |
|
2016 |
3,540 |
500 |
|
2017* |
3,485 |
445 |
*This estimate is based on current USC rates and bands, and does not take into account any changes to USC which may be made in Budget 2017. It should also be noted that it is expected that €220 million of USC receipts for 2017 may be delayed into 2018 due to Single Euro Payments Area (SEPA) requirements.
In relation to abolishing the USC for all Income Earners, I am advised by Revenue that the estimated first and full year cost to the Exchequer would be in the order of €3,330 million and €4,040 million respectively.
As regards abolishing USC for all PAYE Income Earners, I am advised by Revenue that the estimated first and full year cost to the Exchequer would be in the order of €2,885 million and €3,240 million respectively.
Following clarification of the final question with the Deputy's office, I am advised by Revenue that the estimated first and full year cost to the Exchequer from abolishing USC on all income under €90,000, with USC at current rates as set out in Budget 2016 to apply on the portion of income above €90,000 where relevant, is in the order of €2,580 million and €3,020 million respectively.
These figures provided in response to the second, third and fourth questions are estimates from the Revenue tax forecasting model using latest actual data for the year 2014, adjusted as necessary for income, self-employment and employment trends in the interim. They are estimated by reference to 2017 incomes and are provisional and may be revised.
264. Deputy Ruth Coppinger asked the Minister for Finance the amount that could be raised by increasing Corporation Tax to 20%, the standard rate of PAYE for workers. [25343/16]
View answer265. Deputy Ruth Coppinger asked the Minister for Finance the amount that could be raised by increasing the effective rate of corporation tax to the effective rate of income taxation, PAYE and USC, for workers on the median wage. [25344/16]
View answerI propose to take Questions Nos. 264 and 265 together.
I am advised by the Revenue Commissioners that it is not possible to accurately estimate the additional revenue that may be brought in from increasing the 12.5% corporation tax rate to either the standard rate of income tax or the effective rate of tax for workers on the median wage. This would require ex ante knowledge of any behavioural changes on the part of taxpayers as a consequence. In terms of any increase in the 12.5% rate, the negative impacts of behavioural effects on the corporation tax yield are likely to be relatively significant. Additionally, due to the interaction of reliefs and allowances after the calculation of gross tax at the various corporation tax rates, it is not possible to identify the amount of receipts that are in respect of profits taxable at the 12.5% rate alone. However, I am advised by Revenue that the vast majority of the net receipts are from the 12.5% rate of tax.
The Deputy may wish to note the published statistics regarding corporation tax receipts available on the Revenue website at http://www.revenue.ie/en/about/statistics/net-receipts.pdf. The Deputy may also wish to note that an analysis of the Corporation Tax payments in 2014 and 2015 has been published via the following link http://www.revenue.ie/en/about/publications/corporation-tax-receipts-2014-2015.pdf and further information on corporate profits, before allowing credits and reliefs are published at http://www.revenue.ie/en/about/statistics/corporation-tax-calculation.pdf.
In 2014 the Department of Finance carried out and commissioned extensive research which sought to quantify the effect of corporation tax policy on the Irish economy. The comprehensive Economic Impact Assessment of Ireland's Corporation Tax Policy was published on the Department's website on Budget day. 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 that if Ireland had increased the 12.5% corporation tax rate it would have considerably reduced the amount of Foreign Direct Investment ('FDI') into Ireland.
The maintenance of the standard 12.5% rate of corporation tax is therefore 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 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.
266. Deputy Ruth Coppinger asked the Minister for Finance the amount that could be raised by imposing a 5% wealth tax on the top 1% wealthiest households. [25345/16]
View answer267. Deputy Ruth Coppinger asked the Minister for Finance the amount that could be raised by imposing a 2% wealth tax on the top 5% wealthiest households.; and if he will make a statement on the matter. [25346/16]
View answer329. Deputy Thomas P. Broughan asked the Minister for Finance the estimated yield to the Exchequer from the introduction of a wealth tax of 0.6% on the wealthiest 5% of households here; and if he will make a statement on the matter. [26116/16]
View answerI propose to take Questions Nos. 266, 267 and 329 together.
There is currently no statistical basis for Revenue to compile estimates in relation to a potential wealth tax. Although an individual's assets and liabilities are declared to the Revenue in a number of specific circumstances (for example, after a death), this information is not a complete measure of financial assets in the State, nor is it recorded in a manner that would allow analysis of the implications of an overarching wealth based tax.
As part of the research programme agreed between the Department of Finance and the ESRI covering macroeconomic and taxation issues, a research project involving detailed analysis of wealth distribution and taxation has been included. Officials from both institutions are currently analysing the components of the wealth held by Irish households, using data available from the CSO's Household Finance and Consumption Survey (HFCS) which was collected in 2013 and which the CSO made available to my department earlier this year. The research will enhance understanding of the distribution and composition of wealth in Ireland and will explore various wealth tax scenarios for the purposes of better-informed policy making. The research project is ongoing and it is intended that the results will be ready for presentation at the Department's annual Tax Policy Conference in November 2016.
268. Deputy Ruth Coppinger asked the Minister for Finance the amount of revenue that has been raised from taxation of residential rental income for each year since 2011. [25347/16]
View answer269. Deputy Ruth Coppinger asked the Minister for Finance if he will provide a breakdown of the annual cost since 2008 of the tax reliefs and exemptions available to residential landlords. [25348/16]
View answer273. Deputy Ruth Coppinger asked the Minister for Finance the amount that could be raised by applying a 75% rate of income tax on the rental profits of the third and subsequent rental units owned by large residential landlords. [25352/16]
View answerI propose to take Questions Nos. 268, 269 and 273 together.
I am advised that Revenue do not require rental income to be returned in a manner that would enable residential rental accommodation income to be separately identified from rental income in respect of other types of property, such as commercial rental property. It is not therefore possible to provide the amount of revenue raised from the taxation of residential rental income, the annual cost since 2008 of tax relief and exemptions availed of by residential landlords or the amount that could be raised by applying a 75% rate of Income Tax on the rental profits of particular classes of residential landlords as sought by the Deputy.
However, the Deputy may wish to note that the 2013 Report of the Comptroller and Auditor General contains, in Chapter 16, a detailed review of the taxation of rental income and expenses deductible therefrom. This report is available on the website of the Comptroller and Auditor General and can be accessed via the following link: http://audgen.gov.ie/documents/annualreports/2013/report/en/Chap16.pdf.
