Thursday, 13 Jul 2017

Written Answers Nos. 209-228

Tax Yield

Questions (209)

Ruth Coppinger

Question:

209. Deputy Ruth Coppinger asked the Minister for Finance the estimated amount that could be raised by increasing stamp duty on commercial property to 6%. [34518/17]

Written answers

Minister for Finance

I am informed by Revenue that the estimated amount that could be raised by increasing stamp duty on commercial property to 6% is €372 million.

Tax Yield

Questions (210)

Ruth Coppinger

Question:

210. Deputy Ruth Coppinger asked the Minister for Finance the estimated amount that could be raised by introducing a financial transactions tax of 0.1% on securities and 0.01% on derivatives as recommended by the European Commission. [34519/17]

Written answers

Minister for Finance

It is not possible from Revenue data to accurately estimate the yield from introducing a financial transactions tax of 0.1% on securities and 0.01% on derivatives. However, the Deputy may be interested to note that the yield from a 0.1% increase in stamp duty transactions on all shares would be in the region of €43 million.

Universal Social Charge Data

Questions (211, 212, 213, 214, 226, 227, 228)

Ruth Coppinger

Question:

211. Deputy Ruth Coppinger asked the Minister for Finance 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 the estimated amounts likely to accrue from each in 2017 and 2018, in tabular form. [34520/17]

Ruth Coppinger

Question:

212. Deputy Ruth Coppinger asked the Minister for Finance the estimated full year cost of abolishing the USC in 2018. [34521/17]

Ruth Coppinger

Question:

213. Deputy Ruth Coppinger asked the Minister for Finance the estimated full year cost of abolishing the USC on employee wages in 2018. [34522/17]

Ruth Coppinger

Question:

214. Deputy Ruth Coppinger asked the Minister for Finance the estimated full year cost of abolishing the USC on single employee wages under €100,000 in 2017 and on couples earning less than €150,000. [34523/17]

Ruth Coppinger

Question:

226. Deputy Ruth Coppinger asked the Minister for Finance the estimated amount it would cost to abolish the universal social charge for all incomes under €100,000 and maintain it as it is for those on over €100,000. [34535/17]

Ruth Coppinger

Question:

227. Deputy Ruth Coppinger asked the Minister for Finance the net effect for the State of the abolition of the universal social charge in circumstances (details supplied) [34536/17]

Ruth Coppinger

Question:

228. Deputy Ruth Coppinger asked the Minister for Finance the estimated net cost and revenue from abolishing the universal social charge and simultaneously introducing a high earners social charge comprised of levying the current rates of universal social charge on the first €100,000 of income and introducing an additional higher marginal rate of income tax (details supplied) [34537/17]

Written answers

Minister for Finance

I propose to take Questions Nos. 211 to 214, inclusive and Nos. 226 to 228, inclusive, together.

I am advised by the Revenue Commissioners that the amount of Universal Social Charge (USC) collected annually since its introduction in 2011 to 2016, from both PAYE and Schedule D (self-assessed) income earners, is as set out in the following table. It should be noted that the breakdown (being either PAYE income or Schedule D) is classified based on a taxpayer's primary income source. Schedule D income includes both self-employed income and sources of unearned income including rental income, taxable under Schedule D Case V.  Data are not available to enable a breakdown of USC collected at the level of detail requested by the Deputy beyond that shown in the following table.

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
2016	3,287	681

As the Deputy will be aware, a significant USC package was introduced in Budget 2017, which will reduce the expected USC receipts in 2017 to approximately €3,725 million. In relation to 2018, an indicative forecast on a no-policy-change basis would imply a projection in the order of €4.0 billion in respect of USC (around €3.5 billion and €0.5 billion for USC PAYE and USC Schedule D respectively). The €4.0 billion includes the carryover effect from Budget 2017 measures.

On this basis, the estimated full year cost of abolishing the USC on PAYE income in 2018 is in the order of €3.5 billion

Following clarification of the Deputy’s question with regard to the abolition of the USC on single employee wages under €100,000 in 2017, I am advised by the Revenue Commissioners that the estimated first and full year cost to the Exchequer from abolishing USC on all income under €100,000, with USC at current rates as set out in Budget 2017 to apply on the portion of income above €100,000 where relevant, is in the order of €2,320 million and €2,721 million respectively. As USC is an individualised tax the total income of a jointly assessed couple is not relevant to the calculation of USC liabilities and therefore a cost for the abolition of USC on income of a couple earning less than €150,000 cannot be provided.

I am advised by the Revenue Commissioners that the estimated first and full year cost to the Exchequer from abolishing USC for all incomes under €100,000 and maintaining it as it is for those on over €100,000, is in the order of €1,894 million and €2,199 million respectively. It should be noted that this would create a significant step effect whereby an additional USC liability of €5,189 would arise where income exceeds €100,000.

With regard to the Deputy’s request for a cost of abolishing USC in the following manner outlined by the Deputy: for all income under €100,000; the maintenance of it as is for those between €100,000 and €150,000; introducing two new bands of USC of 10% for income between €150,001 and €200,000; and a 12% rate for all income over €200,000, I am advised by the Revenue Commissioners that the first and full year cost to the Exchequer is in the order of €2,145 million and €2,481 million respectively. This estimate is premised on the retention of the 3% surcharge on self-employed income in excess of €100,000.

I am advised by the Revenue Commissioners that the estimated first and full year cost to the Exchequer from abolishing USC for individuals earning under €100,000, maintaining the current USC rates for those earning over €100,000 and simultaneously introducing additional higher marginal rates of income tax for certain taxpayers in the manner outlined by the Deputy, i.e. earnings between €100,000-€140,000 at a 50% marginal rate, earnings between €140,000-€180,000 at a 55% marginal rate, earnings between €180,000-€250,000 at a 60% marginal rate and earnings above €250,000 at 65% is in the order of €695 million and €619 million, respectively.

Where relevant, the figures provided in response to these 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.

Tax Yield

Questions (215, 216, 217, 218)

Ruth Coppinger

Question:

215. Deputy Ruth Coppinger asked the Minister for Finance the estimated 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. [34524/17]

Ruth Coppinger

Question:

216. Deputy Ruth Coppinger asked the Minister for Finance the estimated amount that could be raised by doubling the rate of corporation tax to 25% for 2018. [34525/17]

Ruth Coppinger

Question:

217. Deputy Ruth Coppinger asked the Minister for Finance the estimated amount that could be raised by doubling the rate of corporation tax to 25% on profits in excess of €800,000 for 2018. [34526/17]

Ruth Coppinger

Question:

218. Deputy Ruth Coppinger asked the Minister for Finance the estimated amount that could be raised by doubling the rate of corporation tax to 25%, for companies liable for over €100,000 in corporation tax for 2018. [34527/17]

Written answers

Minister for Finance

I propose to take Questions Nos. 215 to 218, inclusive, together.

I am advised by Revenue 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 25% or to 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 presently in respect of profits taxable at the 12.5% rate alone.

The Deputy may wish to note the published statistics regarding corporation tax receipts available on the Revenue website at http://www.revenue.ie/en/corporate/information-about-revenue/statistics/receipts/receipts-taxhead.aspx. The Deputy may also wish to note that an analysis of the Corporation Tax payments in 2014 and 2015 has been published and is available at http://www.revenue.ie/en/about/publications/corporation-tax-receipts-2014-2015.pdf, and an analysis of 2015 Corporation Tax returns and 2016 payments is available at http://www.revenue.ie/en/corporate/documents/research/corporation-tax-returns-2016.pdf. Further information on corporate profits, before allowing credits and reliefs are published at http://www.revenue.ie/en/corporate/information-about-revenue/statistics/income-distributions/ct-calculation.aspx.

Tax Yield

Questions (219)

Ruth Coppinger

Question:

219. Deputy Ruth Coppinger asked the Minister for Finance the estimated amount that could be raised by increasing capital gains tax to 40%. [34528/17]

Written answers

Minister for Finance

I am advised by Revenue that the full year yield to the Exchequer from increasing the capital gains tax rate from 33% to 40% could be in the region of €207 million. This figure includes the gain from increasing the tax rate on corporate gains. This estimate assumes no behavioural changes on the part of taxpayers, and increases in rates may have a significant behavioural impact and may not produce a corresponding increase in tax yield.

Tax Reliefs Costs

Questions (220, 223)

Ruth Coppinger

Question:

220. Deputy Ruth Coppinger asked the Minister for Finance the annual cost since 2008 of the tax reliefs and exemptions available to landlords on commercial and residential rental income, broken down into commercial and residential rental income. [34529/17]

Ruth Coppinger

Question:

223. Deputy Ruth Coppinger asked the Minister for Finance the annual cost since 2008 of the tax reliefs and exemptions available to property developers, property owners and land owners. [34532/17]

Written answers

Minister for Finance

I propose to take Questions Nos. 220 and 223 together.

I am advised by Revenue that within the tax code there are a number of tax reliefs associated with property and land but not specifically for use by property developers or land owners.  The available statistics in relation to annual costs are on the Revenue website at http://www.revenue.ie/en/corporate/information-about-revenue/statistics. Updates will be published in due course.

Of particular interest to the Deputy are likely to be:

- Tax expenditures and reliefs table, detailing the cost of interest paid loans relating to principal private residence, relief for expenditure on significant buildings and gardens and the  rent a room scheme, is available at http://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/costs-expenditures.aspx

- Property incentives statistics available at http://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/property-reliefs.aspx;

- Home Renovation Incentive Scheme available at http://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/hri/hri-yearly.aspx for 2013 - 2016, and http://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/hri/hri-monthly.aspx for this year thus far

The Deputy may wish to note that a commercial and residential split of tax reliefs and exemptions is not available.

Tax Yield

Questions (221)

Ruth Coppinger

Question:

221. Deputy Ruth Coppinger asked the Minister for Finance the estimated amount that could be raised from imposing a 2% public health levy on the profits of private human health and pharmaceutical companies here, including nursing homes and home care agencies. [34530/17]

Written answers

Minister for Finance

I am advised by Revenue that on the basis of information included in the Corporation Tax returns filed for the tax year 2015, the potential yield from imposing a 2% levy on the profits of private human health and pharmaceutical companies, including nursing homes and home care agencies, is tentatively estimated to be in the region of €200 million, with over 99% from the pharmaceutical companies.

This yield is based on the industry code assigned to companies on Revenue records and does not include any yield associated with subsidiaries of these companies not primarily involved in the sectors mentioned in the question.  It has been assumed that the levy would apply to the taxable profits of pharmaceutical companies, nursing homes and home care agencies but would not apply to medical practices or private hospitals. Additionally the potential yield assumes no significant behavioural change on the part of these companies that could cause the expected levy yield to fall below expectations and could also cause a decrease in Corporation Tax receipts.

Tax Yield

Questions (222)

Ruth Coppinger

Question:

222. Deputy Ruth Coppinger asked the Minister for Finance the estimated amount that could be raised by applying a financial activities tax as proposed by the IMF. [34531/17]

Written answers

Minister for Finance

I take it the Deputy is referring to proposals made by the IMF in 2010.

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. I am unaware of any state which has adopted the FAT as 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 was €424.13 million in 2015 and €391.94 million in 2016. 

The Financial Institutions Levy 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, with an estimated annual yield of €150 million.

The entire banking system has been underpinned by the strong Government support provided both here and abroad and it is appropriate therefore that the banking sector should make a contribution to the State's economic recovery. Accordingly, my predecessor announced in Budget 2017 an extension of 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.

The levy was previously calculated on DIRT payments made in 2011. Following a review of the calculation methodology, the levy will now be based on DIRT payments made in a base year which will change every two years.  

* 2015 will be the base year for 2017 and 2018,                                   

* 2017 will be the base year for 2019 and 2020

* 2019 will be the base year for 2021. 

The introduction of the rolling two-year series of base years has a twofold effect. Firstly, it ensures that financial institutions entering the market over the five further years for which the levy will apply will be subject to the levy and financial institutions exiting the market will cease to be subject to the levy. Secondly, it will help to correct, on an ongoing basis, any anomalies for individual institutions thrown up by prevailing market conditions, such as the interest rate offering, in any one year.

In order to maintain the annual yield from the levy at €150 million, the rate at which the levy is charged will increase from 35% to 59% for 2017. This is because the assessable amount, DIRT payments in 2015, have reduced significantly since 2011. This new rate, combined with the new 2015 base year, will preserve the existing contribution of €150 million paid annually by the affected financial institutions. That rate will be subject to review to ensure that the yield from the levy is not impacted from changes in interest rates and/or DIRT rates.

Question No. 223 answered with Question No. 220.

National Debt Servicing

Questions (224, 225)

Ruth Coppinger

Question:

224. Deputy Ruth Coppinger asked the Minister for Finance the estimated amount that will be paid in interest and in repayment of the principal on the national debt in each of the years 2017 to 2021. [34533/17]

Ruth Coppinger

Question:

225. Deputy Ruth Coppinger asked the Minister for Finance the estimated amount that will be paid in interest and in repayment of the principal on the general government debt in each of the years 2017 to 2021. [34534/17]

Written answers

Minister for Finance

I propose to take Questions Nos. 224 and 225 together.

General Government Debt (GGD) is a measure of the total gross consolidated debt of the State compiled by the Central Statistics Office (CSO) and is the measure used for comparative purposes across the European Union.

National Debt is effectively a domestic measure as it is the net debt incurred by the Exchequer after taking account of cash balances and other financial assets.

Gross National Debt is the principal component of GGD. GGD also includes the debt of central and local government bodies. GGD is reported on a gross basis and does not net off outstanding cash balances and other related assets.

The most recent estimates of interest on General Government Debt and interest on National Debt for the years 2017-2021 were published in the Stability Programme Update 2017 (Table A3, page 51) and are reproduced for the Deputy’s convenience. It is important to note that there are differences between the two measures of interest. For example, National Debt interest is reported on a cash basis whereas interest on GGD is an accrual based measure.

The "repayment of the principal" figures have been provided by the National Treasury Management Agency (NTMA). They reflect Government bonds and EU/IMF Programme loans only.

-	Interest on GGD (€ billions)	Interest on National Debt (€ billions)	Principal Repayments* (€ billions)
2017	6.0	6.2	6.3
2018	6.0	6.3	8.8**
2019	5.8	6.1	15.7
2020	5.6	5.9	21.6
2021	5.3	5.2	3.6**

Sources: Department of Finance, NTMA

* Reflects Government Bond and EU/IMF Programme loan maturities as at end-June 2017. Figures include the effect of currency hedging transactions which are reflected in the National Debt.

** Excludes €3.9 billion of EFSM maturities in 2018 and €3 billion of EFSM maturities in 2021 as these loans are due to be extended following the maturity extensions granted in mid-2013. 

Questions Nos. 226 to 228, inclusive, answered with Question No. 211.