Wednesday, 26 Jul 2017

Written Answers Nos. 188 - 208

Motor Insurance Data

Questions (188)

Richard Boyd Barrett

Question:

188. Deputy Richard Boyd Barrett asked the Minister for Finance the amount paid out annually in motor insurance claims from all insurance companies. [36332/17]

Written answers

Minister for Finance

The Central Bank has advised me that under Solvency I it published Insurance Statistics annually and the latest data available is for 2015. 

In this regard, it has provided me with the following information on claims paid for total motor vehicle business for financial years 2011-2015 inclusive, which is detailed in Table 22 of the Insurance Statistics annual publication. This data covers all insurers established in Ireland and those writing business on a freedom of establishment basis i.e. branches. 

Year	Gross Claims Paid €'m
2015	1,103
2014	1,073
2013	1,051
2012	1,124
2011	1,623

It should be noted that Solvency II came into force from 1 January 2016 with the first annual reporting under Solvency II received on 20 May 2017. This data is currently being analysed and verified by the Central Bank.

VAT Rate Increases

Questions (189)

Richard Boyd Barrett

Question:

189. Deputy Richard Boyd Barrett asked the Minister for Finance the amount that would be collected if the State increased the 9% VAT rate in the hospitality sector to its previous level. [36333/17]

Written answers

Minister for Finance

I am advised by the Revenue Commissioners that the most recent estimate for reverting the reduced 9% VAT rate back to 13.5% is that it would result in extra revenue in the region of €491 million.

Information on estimated costs of changes to all of the VAT rates can be found in the Pre-Budget 2018 Ready Reckoner on the Revenue Statistics webpage: http://www.revenue.ie/en/corporate/documents/statistics/ready-reckoner.pdf

Tax Data

Questions (190)

Richard Boyd Barrett

Question:

190. Deputy Richard Boyd Barrett asked the Minister for Finance the amount that a sugar tax of 10% would yield in 2018. [36334/17]

Written answers

Minister for Finance

It is my intention to introduce a tax on sugar-sweetened drinks in April 2018, to coincide with the introduction of a similar tax in the UK at that time.  This tax will be imposed as a volumetric tax as a specific amount per litre of product, as opposed to an ad valorem rate imposed on the final retail price of product. This is to ensure that the tax is applied to sugar content of the product regardless of the retail price.

The 2016 Tax Strategy papers estimated potential yields from a tax on sugar sweetened drinks based on total soft drink sales in Ireland of 685.4 million litres per annum.  The TSG papers estimated that the tax would apply to 60% of these sales.  Once introduced, it is expected that the tax will apply to much less than 60% of these sales as the soft drinks industry continue to reformulate their products, reducing sugar content.  Therefore, it is difficult to estimate exactly the tax yield.  However, it can be estimated that a tax on sugar sweetened beverages, levied at 10c on a 330ml can, would yield in the region of €40m in a full year.

I have not yet finalised the structure, scope or rate of the tax, so estimates are preliminary and subject to change.  It is expected that the underpinning legislation will be introduced in this year's Finance Act. 

Tax Reliefs Data

Questions (191)

Richard Boyd Barrett

Question:

191. Deputy Richard Boyd Barrett asked the Minister for Finance the annual cost in each of the years 2008 to 2016 and to date in 2017 of tax reliefs and exemptions available to residential landlords. [36335/17]

Written answers

Minister for Finance

I am advised that, until recently, Revenue did 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 annual cost in each of the years 2008 to 2016, and to date in 2017, of tax reliefs and exemptions available to residential landlords as sought by the Deputy. However, tax returns for the 2016 year of assessment onwards have separate data fields for residential property rental income and non-residential property rental income. The relevant information will become available in due course.

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

As the Deputy may be aware, a working group was established in early 2017 to examine and report on the tax treatment of landlords (or rental accommodation providers) and to put forward options, where appropriate, for amendments to such treatment. The establishment of this group was one of the commitments contained in the ‘Strategy for the Rental Sector’ which was published by the Department of Housing, Planning, Community and Local Government in December 2016. The working group is chaired by the Department of Finance and its membership consists of officials from the Department of Finance; the Revenue Commissioners; the Department of Housing, Planning, Community and Local Government; and the Residential Tenancies Board.

As part of the group’s work, a public consultation lasting for four weeks was conducted from March to April 2017 which received almost 70 written submissions from a wide range of interested parties, including individual landlords, representative bodies and charitable organisations.  A summary paper on the issues considered has been prepared for discussion by the Tax Strategy Group this month and the final report of the working group is due to be completed shortly thereafter, to allow for consideration of any options put forward as part of my deliberations for Budget 2018.

Tax Reliefs Costs

Questions (192, 193, 194)

Richard Boyd Barrett

Question:

192. Deputy Richard Boyd Barrett asked the Minister for Finance the annual cost in each of the years 2008 to 2016 and to date in 2017 of tax reliefs and exemptions available to property developers. [36336/17]

Richard Boyd Barrett

Question:

193. Deputy Richard Boyd Barrett asked the Minister for Finance the annual cost in each of the years 2008 to 2016 and to date in 2017 of the tax reliefs and exemptions available to property owners. [36337/17]

Richard Boyd Barrett

Question:

194. Deputy Richard Boyd Barrett asked the Minister for Finance the annual cost in each of the years 2008 to 2016 and to date in 2017 of the tax reliefs and exemptions available to land owners. [36338/17]

Written answers

Minister for Finance

I propose to take Questions Nos. 192 to 194, inclusive, 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 as information for later years become available.

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

- Help to Buy Scheme available at: http://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/htb.aspx

-Local Property Tax exemption and deferral statistics for 2013 to 2015 available at http://www.revenue.ie/en/corporate/documents/statistics/lpt/lpt-stats-2013-2015.pdf and 2016 statistics available at http://www.revenue.ie/en/corporate/documents/statistics/lpt/local-property-tax-2016.pdf

Tax Data

Questions (195)

Richard Boyd Barrett

Question:

195. Deputy Richard Boyd Barrett asked the Minister for Finance the 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. [36339/17]

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% of this 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.

Question No. 196 answered with Question No. 174.

Irish Strategic Investment Fund

Questions (197)

Richard Boyd Barrett

Question:

197. Deputy Richard Boyd Barrett asked the Minister for Finance the number of jobs created by the Irish Strategic Investment Fund in its commercial partnerships; and the locations in which these jobs were created by companies obtaining such investment. [36341/17]

Written answers

Minister for Finance

I can inform the Deputy that the Ireland Strategic Investment Fund (ISIF) recently published an update on its economic impact and details of its investments in 140 Irish companies and projects. Detailed information relating to the Deputy’s request is publicly available on the ISIF website, http://isif.ie/wp-content/uploads/2017/07/Economic-Impact-Report-FY-2016.pdf . 

The report includes a breakdown of employment for Dublin and also by province and covers the period up to end-December 2016. The companies supported by ISIF's investment activity employed 21,930 people, directly or indirectly, which is a 22 percent increase on end-2015 and of these jobs, 49% are located outside of Dublin.

Table 1 provides a breakdown of the employment supported by ISIF's investment activities split between Dublin and the remaining four provinces.

As shown by the report, and outlined in the table, the regional impact of ISIF’s investments is in line with the national spread of economic activity as measured by Gross Value Added (GVA).  GVA is a standard measure of economic activity with GDP comprising the aggregate of GVA at enterprise level across the economy.

The legislation which provided for the establishment of ISIF, the NTMA (Amendment) Act 2014, requires ISIF to include an assessment of its impact on economic activity and employment and the distribution of its investments on a regional basis in its reporting.  Information on the economic impact of ISIF's investment, including employment, is, with the exception of Dublin, reported on a province basis in order to avoid inadvertently identifying commercially sensitive information of underlying investees.

Table 1. ISIF employment levels as at end-2016

-	Jobs	ISIF Capital Deployed	GVA
Dublin	51%	57%	49%
Leinster ex Dublin	15%	13%	20%
Munster	27%	18%	23%
Connacht	5%	8%	5%
Ulster	2%	4%	3%

NAMA Expenditure

Questions (198)

Richard Boyd Barrett

Question:

198. Deputy Richard Boyd Barrett asked the Minister for Finance the amount NAMA paid out to developers for repair and maintenance of properties it once owned. [36342/17]

Written answers

Minister for Finance

I am advised that NAMA does not own properties. Rather its role is as a secured lender and the properties remain under the control of the debtor, or where enforcement has taken place, the appointed receiver/administrator.

I am advised that from inception to May 2017, NAMA has spent over €73m on remediation works on property securing its loans. This funding has had the effect of preserving and increasing the value of these assets, resulting in an increased return to NAMA when they are ultimately sold.

Works which have been carried out as part of this funding include remediation works to unfinished estates, ensuring completion of properties and site works and bringing developments into compliance with all planning and housing legislation. I am advised that a number of former unfinished estates are now being utilised for social housing purposes through the mechanism of NAMA’s social housing vehicle, NARPS.

Question No. 199 answered with Question No. 130.

NAMA Operations

Questions (200)

Richard Boyd Barrett

Question:

200. Deputy Richard Boyd Barrett asked the Minister for Finance the amount NAMA has made available to developers in loan facilities to complete projects by year. [36344/17]

Written answers

Minister for Finance

The information sought by the Deputy, regarding funding for capital and current expenditure that has been advanced by NAMA to its debtors and receivers, is set out in the following table provided by NAMA for the period from 2010 to date.

FUNDING BY YEAR

Year	2010	2011	2012	2013	2014	2015	2016	2017
€'m	240	304	278	328	624	854	640	132

Motor Insurance

Questions (201)

Niamh Smyth

Question:

201. Deputy Niamh Smyth asked the Minister for Finance the options that are open to a person if he or she is of the view that he or she is being discriminated against when it comes to obtaining motor insurance; and if he will make a statement on the matter. [36417/17]

Written answers

Minister for Finance

The provisions of the Equal Status Acts 2000-2015 prohibit discrimination in the provision of goods and services, including insurance, on any of the nine main grounds listed in the Acts.  I am unable to comment further in respect of the applicability or otherwise of this legislation, which falls under the remit of the Minister for Justice and Equality, in respect of any particular case(s).

As Minister for Finance, I am responsible for the development of the legal framework governing financial regulation.  Neither I, nor the Central Bank of Ireland, have the power to direct insurance companies on the pricing or provision of insurance products.  Indeed, 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 insurance products.  The provision of insurance cover and the price at which it is offered is a commercial matter for insurance companies and is based on an assessment of the risks they are willing to accept and adequate provisioning to meet those risks.  These are considered by insurance companies on a case-by-case basis.  

Motor insurers use a combination of rating factors in making their individual decisions on whether to offer cover and what terms to apply.  My understanding is that the factors include those such as the age and type of the car, the age of the driver, the claims record, driving experience, the 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.  Insurance companies also price in accordance with their own past claims experience.

Finally, it may be of interest to you that Insurance Ireland operates a free Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance.  Insurance Ireland can be contacted at [e-mail] or 01-6761914.

Tracker Mortgage Examination

Questions (202)

Pearse Doherty

Question:

202. Deputy Pearse Doherty asked the Minister for Finance the steps persons can take when they are of the view they should be entitled to redress and compensation through the Central Bank's tracker mortgage review but who cannot access the scheme because their bank has unilaterally decided they do not qualify; and if he will make a statement on the matter. [36419/17]

Written answers

Minister for Finance

The Central Bank has advised me that its Framework for conducting the Examination of Tracker mortgage related issues sets out requirements for lenders in terms of the ongoing query/complaints handling mechanism that should be put in place for customers i.e.,

- the lender is to establish a dedicated unit to deal with any queries, complaints, and/or concerns that customers may have during the course of the Examination (excluding Appeals to the Appeals Panel);

- adequate resources are to be allocated to the unit to deal with such queries, complaints and concerns and must continue to be available for at least six months after the four phases of the Examination have been completed and until all complaints have been adjudicated on.

Where a customer is not satisfied with the outcome of his/her lender’s complaints process, he/she may refer the matter to the Financial Services Ombudsman who is the statutory competent authority to deal with individual customer complaints. 

In terms of the outcomes of the reviews being carried out by lenders, the assurance work by lenders’ appointed external independent parties, together with the assurance work undertaken by the Central Bank, is designed to challenge lenders in respect of the adequacy and robustness of their plans to ensure that their reviews are being carried out in line with the requirements of the Framework for conducting the Examination and that the outcomes of the Examination are comprehensive and accurate.

Tax Data

Questions (203)

Thomas P. Broughan

Question:

203. Deputy Thomas P. Broughan asked the Minister for Finance if he will report on recent research available to his Department on the relative annual direct or indirect tax burden on each household and member of the labour force and the trends in that burden since 2007 to 2008; and if he will make a statement on the matter. [36449/17]

Written answers

Minister for Finance

My Department engages in research on a wide variety of taxation-related topics and makes use of a variety of sources. As part of the Tax Strategy Group process, papers on various options for tax policy changes are prepared annually, these papers discuss options and issues to be considered in the Budgetary process. In line with the Government’s commitment to Budgetary reform, including greater engagement with the Oireachtas, the Tax Strategy Group papers are now published well in advance of the Budget to facilitate informed discussion. It is intended that the papers for 2017 will be published on my Department’s website by the end of July. Those for 2016, and indeed previous years, are already available there.

Some points that may be of particular interest to the Deputy include:

- My Department uses the ESRI’s tax-benefit model, SWITCH, in order to analyse the changes in the direct taxation burden for different household categories that arise from Budget policies (an example of this analysis is available in the annex to TSG 2016/05 paper and will be available again shortly in the 2017 equivalent), www.finance.gov.ie/sites/default/files/160714-TSG%2016-05%20-Income%20Tax%20and%20USC%20paper.pdf

- In the context of direct taxation, Annex B from Budget Book 2017 provides a discussion of progressivity and the income tax system. It includes a chart (B.28) which examines the average tax rate at different gross income levels and in different years from 1997 to 2016. It demonstrates that, in any given year, the tax burden increases as incomes increase www.budget.gov.ie/Budgets/2017/Documents/Budget%202017%20-%20Full%20document.pdf

- My officials regularly review and consider publications on the tax burden on labour e.g. the OECD Taxing Wages publication. They also regularly review the tax burden for other taxes using publications from, amongst others, the OECD and the European Commission.

Finally, the Deputy may also wish to note that Revenue’s distribution tables www.revenue.ie/en/corporate/information-about-revenue/statistics/income-distributions/it-ct-distributions.aspx were used recently by my Department in an ESRI joint research paper on tax volatility, www.esri.ie/pubs/RS59.pdf. These tables show how much income tax or USC is paid annually in a given income band for different taxpayer categories.

Economic Statements

Questions (204)

Thomas P. Broughan

Question:

204. Deputy Thomas P. Broughan asked the Minister for Finance the way in which the figures for the reference rate and convergence margin were arrived at in each of the years 2018 to 2021 in the recent summer economic statement 2017 published by his Department; and if he will make a statement on the matter. [36450/17]

Written answers

Minister for Finance

The reference rate and convergence margin for next year were set by the European Commission in its Spring forecast published in May of this year.

The process by which these figures are arrived at are detailed in the 2017 Edition of the Vade Mecum on the Stability and Growth Pact as well as the documentation published by my Department (table A7) in October last year as part of the Budget for this year. 

The reference rate is a ten-year average of the potential growth rate of the economy, comprising backward- and forward-looking elements. 

The convergence margin is calculated on a country-specific basis for countries who have not yet reached their Medium Term Budgetary Objective (MTO). It is designed to ensure that the MTO is achieved in a suitable manner, and takes into account the share of Government Primary Expenditure in GDP.

VAT Rate Increases

Questions (205)

Thomas P. Broughan

Question:

205. Deputy Thomas P. Broughan asked the Minister for Finance the impact on budget 2018 if the 9% VAT rate for the hospitality industry were increased to 10%, 11%, 12% and 13.5%; the estimated additional yield at each rate; and if he will make a statement on the matter. [36451/17]

Written answers

Minister for Finance

I am advised by the Revenue Commissioners that information on estimated costs of changes to all of the VAT rates can be found in the Pre-Budget 2018 Ready Reckoner on the Revenue Statistics webpage: http://www.revenue.ie/en/corporate/documents/statistics/ready-reckoner.pdf

The Revenue Reckoner details that the full-year cost of increasing the 9% VAT rate by 1% is estimated to be €109 million. Further increases can be estimated on a straight line basis assuming nothing else changes.

Tax Yield

Questions (206)

Thomas P. Broughan

Question:

206. Deputy Thomas P. Broughan asked the Minister for Finance the projections on additional tax yield if excise duties on petrol and diesel were equalised; and if he will make a statement on the matter. [36452/17]

Written answers

Minister for Finance

I am informed by Revenue that the full year tax yield from equalising the tax on diesel with the tax on petrol is estimated at €337 million assuming no change in behaviour.

Questions Nos. 207 and 208 answered with Question No. 148.