Monday, 11 Sep 2017

Written Answers Nos. 185-204

Tax Code

Questions (185)

John Curran

Question:

185. Deputy John Curran asked the Minister for Finance his views on whether it is appropriate to charge VAT on carbon tax and the PSO levy; and if he will make a statement on the matter. [38188/17]

Written answers

Minister for Finance

VAT is governed by the EU VAT Directive, with which Irish VAT law must comply. Article 78 of the VAT Directive provides that the taxable amount shall include “taxes, duties, levies and charges, excluding the VAT itself”. The amount on which VAT is chargeable, in accordance with section 37(1) of the Value-Added Tax Consolidation Act 2010, is the total consideration receivable by the supplier, “including all taxes, commissions, costs and charges whatsoever” but not including the VAT itself. 

In this respect, in the case of a gas bill, which includes carbon tax, VAT law dictates that VAT should be calculated on the carbon tax element of the bill as well as the charge for the service. Similarly, where an electricity bill includes the PSO levy, VAT is charged on the full amount of the charge to the customer, which includes the PSO levy. The same situation applies in the case of other excises, including for example excises on petrol, auto-diesel, tobacco and alcohol products, where the VAT charged on these goods is also charged on the excise value.

Guidance in relation to the VAT treatment of the total consideration receivable by a supplier is set out in the VAT Guide. This publication is available on the Revenue website at www.revenue.ie.

Question No. 186 answered with Question No. 151.

Motor Insurance Costs

Questions (187)

John Curran

Question:

187. Deputy John Curran asked the Minister for Finance the steps he is taking to ensure that drivers will see significant motor insurance premiums reductions in view of the fact that motor insurance companies are currently returning profits and that motor insurance premiums have increased excessively particularly in the past three years; and if he will make a statement on the matter. [38200/17]

Written answers

Minister for Finance

At the outset, the Deputy should note that 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 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.  

In relation to the profit levels of companies providing motor insurance, the Deputy may wish to note that the profitability of the sector is discussed in Chapter 3 of the Report on the Cost of Motor Insurance, which was published by the Cost of Insurance Working Group in January 2017. The Report highlights that the industry made substantial profits between 2005 and 2008 (€2.2bn, of which approximately €1bn related to motor insurance). However, during the period from 2009 to 2015, there were underwriting losses of €1.3bn, with motor insurance accounting for €900m of this. It should also be noted that the low interest rate environment has materially affected the levels of interest or investment income which insurers can earn and has reduced their ability to compensate in part for their underwriting losses.  

Therefore, notwithstanding the recent return to profitability for certain companies in the sector, the issue of profitability has been problematic for the industry over the previous number of years, and was a contributory factor to the general price increases experienced by consumers during that time.

As you are aware, this problem of rising motor insurance premiums was the main impetus for the establishment of the Cost of Insurance Working Group in July 2016. The Report on the Cost of Motor Insurance makes 33 recommendations with 71 associated actions to be carried out in agreed timeframes, which are set out in an Action Plan. 

Work is ongoing on the implementation of the recommendations by the relevant Government Departments and Agencies and there is a commitment within the Report that the Working Group will prepare quarterly updates on its progress. The second such update was published on the Department's website on 21 July 2017 and shows the progress to date on the overall implementation of the recommendations, with a particular focus on the 17 action points which were due for completion in the second quarter of 2017. All 17 of these action points have been completed by their deadline.  Substantial work has also been undertaken in respect of the nine action points categorised as “ongoing”. The third quarterly update will issue in the coming weeks.

I believe that the implementation of the Report on the Cost of Motor Insurance will make a difference to the pricing of insurance premiums over the next 18 months.  It is envisaged that the implementation of all the recommendations cumulatively, with the appropriate levels of commitment and cooperation from all relevant stakeholders, will achieve the objective of delivering fairer premiums for consumers.  I also believe that the Setanta judgment, by finding that MIBI is not liable to meet third party claims, removes a major uncertainty from industry, which I would expect to be reflected in pricing in the short to medium term.

It should be noted that the most recent CSO data (for August) indicates that private motor insurance premiums have reduced by 14% year-on-year.  While the CSO statistics indicate a greater degree of stability on an overall basis, these figures represent a broad average and therefore there are many people who may still be seeing increases. I am hopeful that greater stability in pricing will continue to occur, and that premiums will continue to fall from the very high level of last year.

Motor Tax

Questions (188)

Dara Calleary

Question:

188. Deputy Dara Calleary asked the Minister for Finance his plans to reduce the rate of VRT on motorhomes; and if he will make a statement on the matter. [38238/17]

Written answers

Minister for Finance

Motorhomes are classed as Category B vehicles and therefore are subject to a rate of VRT of 13.3% of their Open Market Selling Price (OMSP). This compares to Category A (passenger) vehicles which are charged at rates between 14% and 36% of their OMSP depending on the level of CO2 they emit.

There are a number of objectives of the Irish Vehicle Registration Tax (VRT) system. VRT is an important source of revenue for the State.  It also seeks to reflect the negative externalities caused by using the vehicle in the State. These externalities are the costs to society and to the environment that, without the tax, would not otherwise be reflected in the price of the vehicle and for which the consumer would not otherwise have to pay. 

In the case of motor vehicles, these include environment externalities such as air pollution, which is why one of the bases for imposing VRT is the vehicle's carbon emissions.  Other externalities which VRT seeks to reflect, include the costs to society of providing and maintaining the road infrastructure, traffic control, relevant emergency services, and vehicle registration and licensing.  The funds raised through VRT go towards compensating the Irish State for these significant costs. 

Bank Codes of Conduct

Questions (189)

Michael McGrath

Question:

189. Deputy Michael McGrath asked the Minister for Finance if it is Central Bank policy that the banks should record all telephone conversations between members of staff and the banks' customers; the current policy of banks (details supplied) in this regard; the length of time such recordings should be retained for; and if he will make a statement on the matter. [38248/17]

Written answers

Minister for Finance

The Code of Conduct on Mortgage Arrears Provides that "A lender must maintain recordings of all Arrears Support Unit telephone calls made to or from a borrower in relation to his/her arrears or pre-arrears." and that "All records required by, and demonstrating compliance with this Code, must be retained by the lender for six years. In addition, all records relating to a borrower must be retained for six years from the date the relationship with the borrower ends."

I understand that it is KBC Bank Ireland’s policy to record business transactions carried out on the telephone which create a verbal contract. Customers are advised that calls may be recorded for quality and training purposes. It is the Bank’s policy to provide customers with a copy of such voice recordings where requested.

I understand that calls between staff and customers at AIB are recorded in certain business areas depending on business need or business requirement (e.g. Call centres, dealing rooms) or where there is a regulatory requirement (for example under the Code of Conduct on Mortgage Arrears). In general and particularly where there is a regulatory requirement, calls are retained for six years and in some circumstances, for six years from the date the relationship with a borrower ends or if the provision of any product or service to the consumer concerned is ceased.

I have been informed by Bank of Ireland that it adheres to the Consumer Protection Code and the Code of Conduct on Mortgage Arrears which set out certain requirements for lenders – including Bank of Ireland – in relation to the recording of customer telephone calls.

Ulster Bank has informed me that where the bank records telephone conversations between its customers and the bank, these recordings are held for the period required under the relevant legislation (e.g. Data Protection, Codes of Conduct and Code of Conduct on Mortgage Arrears). The bank also informed me that not all calls are recorded, for example if a consumer calls an advisor on their mobile, the call is not recorded.

Permanent TSB have informed me that the bank has policies in place to ensure that their regulatory obligations (e.g. Consumer Protection Code/Code of Conduct on Mortgage Arrears) requiring the recording of telephone conversations with certain customers are met.  The Bank may record conversations with customers for training and quality purposes. Telephone recordings are primarily focused on areas of the bank where service through face to face customer contact is not available. These areas include Permanent TSB’s Telephone Banking Service and its Arrears Support Unit.

I should also add that the Financial Services Ombudsman has informed me that recordings of telephone conversations relevant to a dispute between a customer and their financial service provider can provide very useful, objective contemporaneous evidence for him when investigating and adjudicating complaints.

On the issue more generally, the Central Bank has informed me that the Bank’s Consumer Protection Code 2012 does not require regulated entities, including banks, to record all telephone calls with customers.  However, Provision 3.44 of the Code provides that when making telephone contact in accordance with the Code, the representative of a regulated entity must inform the consumer that the telephone contact is being recorded, if this is the case.  Chapter 11 of the Code sets out the record keeping requirements regulated entities must comply with in respect of regulated activities within the scope of the Code.

Provision 11.5 states that a regulated entity must maintain up-to-date records containing “all correspondence with the consumer and details of any other information provided to the consumer in relation to the product or service”.  The Code defines “record” as “any document, file or information (whether stored electronically or otherwise) and which is capable of being reproduced in a legible form.” Therefore, while a regulated entity is not required by the Code to record telephone calls to comply with Provision 11.5, if the firm does choose to record calls, the Central Bank’s view is that the call recordings would constitute ‘records’ under the definition outlined above and must be retained.  If the regulated entity does not record calls, the Central Bank expects that they would document that a telephone call was made and a summary of the conversation, and that this would be retained. Provision 11.6 of the Code requires regulated entities to retain details of individual transactions for six years after the date on which the particular transaction is discontinued or completed, but must retain all other records for six years from the date on which the regulated entity ceased to provide any product or service to the consumer concerned. The Central Bank’s Code of Conduct on Mortgage Arrears 2013 (the CCMA) applies to the mortgage loan of a borrower which is secured by his/her primary residence, and sets out how mortgage lenders must treat borrowers in arrears or pre-arrears.  Provisions 61 to 65 of the CCMA set out the records and compliance requirements. The CCMA requires a lender to maintain recordings of all Arrears Support Unit telephone calls made to or from a borrower in relation to his/her arrears or pre-arrears.  All records required by the CCMA, including call recordings, must be retained by the lender for six years.  In addition, all records relating to a borrower must be retained for six years from the date the relationship with the borrower ends.  

Strategic Banking Corporation of Ireland Data

Questions (190)

Niall Collins

Question:

190. Deputy Niall Collins asked the Minister for Finance the lending targets the SBCI set for lending to SMEs in 2017. [38299/17]

Written answers

Minister for Finance

The Strategic Banking Corporation of Ireland (SBCI) is Ireland’s National Promotional Institution for SMEs and its strategic mission is to deliver effective financial supports to Irish SMEs that address failures in the Irish credit market, while driving competition and innovation and ensuring the efficient use of available EU resources. The SBCI achieves this aim through the provision of low cost liquidity and risk sharing activities supporting the provision of appropriately priced, flexible funding to SMEs.

The SBCI does not lend directly. Rather, the SBCI provides appropriately priced, flexible funding to SMEs via its partner finance providers, known as on-lenders, through the provision of low cost liquidity and risk sharing activities. The SBCI currently has three bank and four non-bank on-lenders: AIB; Bank of Ireland; Ulster Bank; First Citizen Finance; Finance Ireland; Bibby Financial Services Ireland and FEXCO Asset Finance.  

The SBCI began lending in March 2015; to the end of June 2017, the SBCI has supported loans totalling €855 million to 21,132 Irish SMEs employing 106,728 people. I am pleased to note that this represents an increase of 57% in SBCI lending since the end of December 2016. It is also very encouraging to note that the interest rate on SBCI loans is, on average, 1.15% lower than the average market interest rate on loans to SMEs and that 85.1% of SBCI loans are to SMEs based outside of Dublin. 

The SBCI expects to announce further on-lenders in 2017. It also intends to build further on the risk-sharing aspect of its business model, allowing it to improve the risk appetite of partner finance providers and address new market failures in the SME finance market. The SBCI will do this through its operation and management of the Credit Guarantee Scheme and through the use of European financial instruments

The SBCI’s lending to SMEs is largely driven by market demands and needs that are not fully met by the private sector. The Deputy can rest assured that the SBCI is working to develop a more diverse range of on-lenders and innovative products. This will enable it to broaden its distribution capability and market coverage, meet the evolving requirements of the SME finance market and contribute to a sustainable and competitive economy. 

Departmental Staff Data

Questions (191, 192)

Mary Lou McDonald

Question:

191. Deputy Mary Lou McDonald asked the Minister for Finance the annual percentage of female non-commercial State sponsored bodies staff under the remit of his Department in each of the years 2010 to 2016, inclusive, and to date in 2017, in tabular form. [38363/17]

Mary Lou McDonald

Question:

192. Deputy Mary Lou McDonald asked the Minister for Finance the annual percentage of public service staff who were women under the remit of his Department in each of the years 2010 to 2016, inclusive, and to date in 2017, in tabular form. [38386/17]

Written answers

Minister for Finance

I propose to take Questions Nos. 191 and 192 together.

The annual percentage of female public service staff in my Department in each of the years 2010 to 2016 and to date in 2017 is set out in the following table:

Year	Percentage of female public service staff
2010	49.76%
2011	48.19%
2012	49.10%
2013	49.44%
2014	50.30%
2015	46.88%
2016	45.70%
2017 (to 31/08/2017)

With respect to the eighteen non-commercial bodies under the aegis of my Department, I am advised that six do not employ public service staff. These are the Credit Union Advisory Committee, the Credit Union Restructuring Board, the Disabled Drivers Medical Board of Appeal, the Financial Services Ombudsman Council, the Irish Financial Services Appeals Tribunal and the Social Finance Foundation. One further body under the aegis of my Department, the Irish Bank Resolution Corporation, is not part of the public service.

The remaining eleven bodies have provided the information sought and this is set out in the following table.

Body	Percentage of female public service staff
Comptroller and Audit General	2010 = 44% 2011 = 46% 2012 = 45% 2013 = 48% 2014 = 50% 2015 = 50% 2016 = 47% 2017 = 48%
Central Bank	2010 = 49% 2011 = 48% 2012 = 48% 2013 = 49% 2014 = 49% 2015 = 49% 2016 = 49% 2017 = 50%
Credit Review Office	2010 = 33% 2011 = 33% 2012 = 33% 2013 = 33% 2014 = 33% 2015 = 33% 2016 = 33% 2017 = 67%
Financial Services Ombudsman Bureau	2010 = 52% 2011 = 50% 2012 = 59% 2013 = 61% 2014 = 59% 2015 = 71% 2016 = 67% 2017 = 69%
Investor Compensation CompanyLimited	2010 = 46% 2011 = 43% 2012 = 44% 2013 = 44% 2014 = 56% 2015 = 50% 2016 = 33% 2017 = 38 %
Irish Fiscal Advisory Council	(IFAC was established on an interim basis in July 2011 and put on a statutory footing in 2012) 2011 = N/A 2012 = 67% 2013 = 40% 2014 = 29% 2015 = 11% 2016 = 29% 2017 = 44%
National Asset Management Agency	2010 = 24% 2011 = 33% 2012 = 34% 2013 = 40% 2014 = 43% 2015 = 45% 2016 = 46% 2017 = 48%
National Treasury Management Agency	2010 = 48% 2011 = 50% 2012 = 47% 2013 = 46% 2014 = 47% 2015 = 48% 2016 = 47% 2017 = 48%
Office of the Revenue Commissioners	(Temporary Clerical Officers are not included) 2010 = 61.3% 2011 = 61.6% 2012 = 61.9% 2013 = 62.3% 2014 = 62.8% 2015 = 62.8% 2016 = 62.8% 2017= 62.9%
Strategic Banking Corporation of Ireland	(SBCI was established in 2014) 2014 = 33% 2015 = 33% 2016 = 44% 2017 = 44%
Tax Appeals Commission	2010 = 40% 2011 = 40% 2012 = 40% 2013 = 50% 2014 = 50% 2015 = 50% 2016 = 57% 2017 = 60% (The Tax Appeals Commission was established on the 21st March 2016 to replace the Office of the Appeal Commissioners. The above figures include those for the Office of the Appeal Commissioners)

Banking Sector

Questions (193)

Gerry Adams

Question:

193. Deputy Gerry Adams asked the Minister for Finance when he expects to finalise his consideration of the merits of local public banks. [38436/17]

Written answers

Minister for Finance

As the Deputy is aware, the Programme for Government commits the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs (DAHRRGA) and the Department of Finance to investigate the German Sparkassen model for the development of local public banks that operate within well-defined regions. Responsibility for this commitment has now moved from the DAHRRGA to the Department of Rural and Community Development. 

A project team with officials from both departments was assembled in early 2017 to investigate the Sparkassen model and other models of local public banking and bring forward a report to both the Minister for Rural and Community Development, Michael Ring T.D., and myself. I understand that this report is near completion and will be published in due course. It will set out the Irish banking context as well as analysing the responses to the consultation on public banking and its applicability in Ireland. It will then set out the findings and conclusions of the investigation of the Sparkassen model and other models of local public banking.

Tax Code

Questions (194)

Jackie Cahill

Question:

194. Deputy Jackie Cahill asked the Minister for Finance the position regarding a case in which an inheritance is used to purchase an agricultural asset (details supplied); and if he will make a statement on the matter. [38543/17]

Written answers

Minister for Finance

I am advised by Revenue that the tax treatment to be applied in the case supplied by the Deputy would depend on the conditions attached to the inheritance of the cash benefit, if any, by the disponer and on whether the inheritance also consisted of agricultural property.

Section 89 of the Capital Acquisitions Tax Consolidation Act (CATCA) 2003 provides for agricultural relief. The relief takes the form of a 90% reduction in the taxable market value of gifted or inherited agricultural property. To qualify for the relief, the person taking the gift or inheritance (the 'beneficiary') of the agricultural property must first qualify as a 'farmer' for the purpose of section 89 CATCA 2003. This means that a beneficiary's agricultural property must comprise at least 80% by gross market value of the beneficiary's total property at a particular date.

Section 89 allows that where an inheritance of a benefit has been made conditional on it being invested in agricultural property, then that inheritance will be considered agricultural property for the purposes of the 80% test provided the investment in agricultural property takes place within 2 years of the date of the inheritance. If the cash benefit has been bequeathed without this condition then it will not be treated as agricultural property for the purposes of the 80% test and depending on the value of any other property which would qualify as agricultural property within the same inheritance, it may affect his or her entitlement to agricultural relief. 

If the cash benefit does not qualify for agricultural relief, then the inheritance is taxed in the standard way. For the purposes of CAT, the relationship between the disponer and the beneficiary determines the life-time tax-free threshold – known as the “Group threshold” – below which gift or inheritance tax does not arise. Where a person receives gifts or inheritances in excess of their relevant tax free threshold, CAT at a rate of 33% applies on the excess over the tax free threshold.

Currency Exchange

Questions (195, 200, 201, 216)

Brendan Smith

Question:

195. Deputy Brendan Smith asked the Minister for Finance what measures he plans to implement to assist the retail sector due to the difficulties that have arisen from the weakening of the value of sterling; and if he will make a statement on the matter. [38597/17]

Joan Burton

Question:

200. Deputy Joan Burton asked the Minister for Finance the way in which he plans to deal with the impact in the fall of the value of sterling for retailers; and if he will make a statement on the matter. [38614/17]

Joan Burton

Question:

201. Deputy Joan Burton asked the Minister for Finance his plans to protect exporters and importers from the substantial fall in the value of sterling; and if he will make a statement on the matter. [38615/17]

Stephen Donnelly

Question:

216. Deputy Stephen S. Donnelly asked the Minister for Finance his plans to support businesses and sectors which are particularly exposed to the decline in the value of sterling; and if he will make a statement on the matter. [38664/17]

Written answers

Minister for Finance

I propose to take Questions Nos. 195, 200, 201 and 216 together.

At the outset, let me say that sectoral issues are a matter for the relevant Departments and Ministers. 

It must be acknowledged that exchange rate movements over the past year have caused difficulties, particularly for the labour-intensive indigenous sectors. Euro-sterling exchange rate developments have been largely driven by the uncertainty associated with Brexit over the last year or so.  There was a notable appreciation of the bilateral rate in the months leading up to the vote and a further sharp appreciation following the outcome of the referendum.  Since the vote, the euro has appreciated by approximately 20 per cent against sterling and is currently trading at around €1 = stg£0.91.

As we cannot control the international environment or exchange rate developments, it is crucially important that continued competitiveness improvements are achieved, including by focusing on costs we can control and by boosting our productivity. Ensuring a sustainable path for the public finances is also of fundamental importance.

As the depreciation in sterling most likely reflects a structural change in the UK economy, it is essential that the policy response is also structural in nature and, going without saying, in line with EU State Aid rules.  Continued market diversification must be part of the policy response, so that dependence on and exposure to the UK market is reduced. 

A number of policy initiatives have been introduced since the UK referendum last year.  Budget 2017 included a specific set of measures aimed at making Ireland Brexit ready:

- retention of the 9 per cent VAT rate for the hospitality sector

- package of measures to help the agrifood sector

- further resourcing of Enterprise Ireland and IDA Ireland

- extension of benefits to the self-employed

- changes to the tax regime for entrepreneurs

The Government's trade strategy - Ireland Connected - published earlier this year, sets out a number of measures specifically addressing Brexit related issues, including diversification of markets for indigenous exporters.

In addition, my Department continues to work with the Department of Business, Enterprise and Innovation, SBCI, Enterprise Ireland, and the Department of Agriculture to develop potential supports in response to the future needs of businesses impacted by Brexit. Development of these proposed responses is subject to resources being agreed as part of the annual budgetary process.

Advisory supports in relation to business planning, such as those provided by the Local Enterprise Offices and Enterprise Ireland, will also be particularly important in assisting viable but vulnerable SMEs that may be adversely affected due to Brexit. These supports will help raise awareness of both private market financial supports and existing State supports.

Property Tax

Questions (196, 244)

Joan Burton

Question:

196. Deputy Joan Burton asked the Minister for Finance his plans to review the property tax, in view of the impact of the increase in property values on the LPT; if he considered varying the rates to balance the impact of higher property values; if these issues will be addressed in the proposed three year budget; and if he will make a statement on the matter. [38608/17]

Michael McGrath

Question:

244. Deputy Michael McGrath asked the Minister for Finance his plans to reimburse persons for private property valuations with a decrease in property tax in view of the fact that property valuations have increased nationally; and if he will make a statement on the matter. [39024/17]

Written answers

Minister for Finance

I propose to take Questions Nos. 196 and 244 together.

The Department of Finance engaged Dr. Don Thornhill in 2015 to conduct a review to consider and make recommendations on the operation of the Local Property Tax, in particular any impacts on LPT liabilities due to property price developments.

Dr. Thornhill made a number of recommendations in his report on his review of the Local Property Tax. His central recommendation was for a revised system whereby a minimum level of LPT revenues in each local authority area would be determined by Government, ideally having regard to the apportionment between local authority areas of the historic yield. This in turn would allow for the estimation of LPT rates for each local authority area and the application of these by taxpayers and Revenue. Local authorities could adjust this rate upwards by a factor of up to 15%. This new system was recommended by Dr. Thornhill with a possible interim deferral of the next valuation date until November 2018 or November 2019.

The Minister for Finance subsequently proposed to Government that the revaluation date for the LPT be postponed from 2016 to 2019. This postponement meant that home owners were not faced with significant increases in their LPT in 2017 as a result of increased property values.  The postponement also gives sufficient time for the other recommendations in Dr. Thornhill's report to be considered fully by the Government and there are no proposals to change this.

The Finance (Local Property Tax) (Amendment) Act 2015 gave effect to the postponement of the revaluation date of residential property for LPT purposes, and also to two of the recommendations in Dr. Thornhill's report, involving LPT relief for properties affected by pyrite and relief for properties occupied by persons with disabilities. 

My Department will be considering issues relating to the implementation of other recommendations in the Thornhill Report in due course in line with the 2019 timeline.

National Debt

Questions (197)

Joan Burton

Question:

197. Deputy Joan Burton asked the Minister for Finance the schedule of amounts, maturity dates and interest rates on Ireland's outstanding debt; the highest rates of interest applied to Irish borrowings; and if he will make a statement on the matter. [38609/17]

Written answers

Minister for Finance

The National Debt 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 General Government Debt.

Details of the provisional and unaudited composition of Gross National Debt, its residual maturity and average interest rates as at end-June 2017 are set out in the table below.

The exact maturity dates of all Government bonds and EU-IMF Programme loans are available on the website of the National Treasury Management Agency (NTMA) at http://www.ntma.ie/business-areas/funding-and-debt-management. 

An annual maturity profile of Ireland’s Long-Term Marketable and Official Debt is also available on the NTMA website at

http://www.ntma.ie/business-areas/funding-and-debt-management/debt-profile/maturity-profile/ .

The highest individual rate of interest applying to current debt outstanding is on the Irish Amortising Bonds due to mature in January 2037 (€114 million outstanding at end-June 2017), May 2042 (€217 million) and September 2047 (€123 million).  Each of these bonds carries an annual coupon of 5.92%.

Gross National Debt as at end-June 2017	-	-	-
Instrument	Outstanding Balance	Weighted Average Residual Maturity	Weighted Average Interest Rate
-	€bn	Years	%
Government Bonds	128.9	10.7	3.5%1
EU-IMF Programme	50.2	10.72	2.1%2
State Savings	17.33	3	0.33%-1.5%3
Other Medium and Long-Term Debt	1.9	19.54	3.0%4
Short term debt	9.95	0.35	-0.4%5
Total Gross National Debt	208.2	-	-
Source: NTMA	-	-	-

The figures in the table above are provisional and unaudited. They are therefore subject to revision.

Rounding may affect totals. National Debt figures take account of the effect of currency hedging transactions.

Notes to table:

1 The nominal interest rate is displayed, which differs from the yield at issue. Government Bonds include an Inflation-linked bond which pays an annual coupon of 0.25%; the actual interest payments on this bond will be linked to the Eurostat Harmonised Index of Consumer Prices (HICP) for Ireland, excluding tobacco).

2 EFSM loans are subject to maturity extensions designed to bring the original weighted average maturity to 19.5 years. It is not expected that Ireland will have to refinance any of its EFSM loans before 2027. However as the revised maturity dates of individual EFSM loans will only be determined as they approach their original maturity dates, the weighted average maturity figure above does not fully reflect the maturity extensions. Including certain assumptions for EFSM maturity extensions, the estimated residual weighted average maturity of EU-IMF Programme loans was 12.6 years at end-June 2017. The EU-IMF Programme interest rate is an estimated weighted average, euro equivalent interest rate.   

3 State Savings Schemes also include money invested by depositors in the Post Office Savings Bank (POSB) which does not form part of the National Debt but is part of General Government Debt.  Taking into account POSB Deposits, total State Savings outstanding were €20.3 billion at end-June 2017. State Savings include products with original maturities ranging from 3 - 10 years. These products generally have a very high re-investment rate. Irrespective of the original term, NTMA State Savings products can be encashed on demand at any time - repayment takes 7 days. Prize Bonds can be encashed when 90 days have elapsed after the purchase date and you will receive the full face value on your bonds within 7 working days. The interest rates shown are the maximum interest rates (AER) payable on the fixed term, fixed rate products available for purchase at end-June 2017. It was announced in July 2017 that the Prize Bond prize fund rate was to change to 0.50%, from 0.85%, applicable from August 2017.

4 The table shows the weighted average maturity and interest rate for Private Placements, Euro Medium Term Notes, and loans from the European Investment Bank and Council of Europe Development Bank.

5 The table shows the weighted average maturity and euro equivalent interest rate for Treasury Bills, Euro Commercial Paper, Exchequer Notes and Central Treasury Notes. The short-term debt outstanding balance also includes Borrowing from Ministerial Funds.

Tax Strategy Group

Questions (198)

Joan Burton

Question:

198. Deputy Joan Burton asked the Minister for Finance what studies the Tax Strategy Group has carried out in respect of tax incentives to promote social affordable housing in new residential developments. [38610/17]

Written answers

Minister for Finance

As the Deputy will be aware, the Tax Strategy Group (TSG) is in place since the early 1990s and is chaired by the Department of Finance with membership comprising senior officials and political advisers from a number of Civil Service Departments and Offices.

Papers on various options for tax policy changes are prepared annually by Department of Finance officials. The TSG is not a decision making body and the papers produced by the Department are simply a list of options and issues to be considered in the Budgetary process. Papers relating to PRSI and social welfare issues are also prepared for the Group by the Department of Employment Affairs and Social Protection.

In line with the Government’s commitment to Budgetary reform including greater engagement with the Oireachtas, the TSG Papers are now published in advance of the Budget to facilitate informed discussion. Accordingly the Budget 2018 TSG Papers were published on my Department’s website on 31 July:

(www.finance.gov.ie/updates/budget-2018-tax-strategy-group-papers).

A total of thirteen Papers cover a wide range of tax-related topics. There is no Paper which covers the specific issue raised by the Deputy but a number of Papers addressed topics related to housing. In particular she may wish to note Paper TSG 17-03, The Tax and Fiscal Treatment of Rental Accommodation Providers. A Working Group to examine and report on the tax treatment of landlords (or rental accommodation providers) was established in January 2017. This was on foot of a commitment contained in the ‘Strategy for the Rental Sector’, published by the Department of Housing, Planning and Local Government in December 2016. As part of its work, the Group conducted a public consultation over four weeks from Friday 10 March to Friday 7 April 2017. A preliminary output of the Working Group was presented in this TSG Paper and discussed at the meeting of the TSG which was held at my Department on 25 July. The Report of the Working Group, including an outline of the findings of the public consultation, is currently being finalised. This Report, including an outline of the findings of the public consultation, will inform my consideration of any potential measures relating to the tax treatment of rental accommodation providers as part of my deliberations for Budget 2018. It is envisaged that the Final Report of the Working Group will be published on the Budget website (www.budget.gov.ie) on Budget Day.

Mortgage Book Sales

Questions (199)

Joan Burton

Question:

199. Deputy Joan Burton asked the Minister for Finance if his attention has been drawn to the fear and distress being caused by recent media reports of the proposed sale of a portfolio of €1.25 billion mortgage loans by a bank (details supplied); the measures he proposes to protect the homes of vulnerable families whose mortgage loan may be sold on at a discount; and if he will make a statement on the matter. [38612/17]

Written answers

Minister for Finance

The proposed sale referred to in media reports appears to relate to the sale of buy-to-let mortgages rather than homeloans.  Nevertheless I will address the Deputy's concern in relation to homeloans.    

The Deputy will be aware that there are substantial protections in place for customers in the event that a loan is sold from the original provider to a third party. The Consumer Protection (Regulation of Credit Servicing Firms) Act 2015 was enacted in July 2015 and is designed to protect borrowers in this situation. Under the Act, purchasers of loan books must either be regulated by the Central Bank themselves or else the loans must be serviced by a credit servicing firm who is regulated by the Central Bank.

Under the  Consumer Protection (Regulation of Credit Servicing Firms) Act 2015 relevant borrowers, whose loans are sold to third parties, maintain the same regulatory protections they had prior to the sale, including under the various statutory codes (such as the Consumer Protection Code, Code of Conduct on Mortgage Arrears) issued by the Central Bank of Ireland and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium-Sized Enterprises) Regulations 2015 which came into operation on 1 July 2016.

The sale of a loan from one entity to another does not change the terms of the contract or the borrower's rights and obligations under the original contract. My Department will continue to keep all relevant legislation under review in order to ensure that borrowers whose loans have been sold are properly protected and do not lose any protections which they previously enjoyed. In addition, the Department of Finance expect that the Central Bank as regulator of credit servicing firms, will be vigilant in this area and raise any specific instances where they have found consumers have not had their protections upheld or where their positions have been disadvantaged.

In relation to tenants, landlord-tenant relations are governed by multiple pieces of legislation (mainly under the aegis of my colleague, the Minister for the Housing, Planning, Community and Local Government). The landlord/owner of the property is restricted in what they can do in relation to removal of tenants from a property. These restrictions are the same whether the landlord bought the property, built the property themselves, became a landlord as a result of renting out what was formerly a principal dwelling house or acquired the property by other means such as enforcing loans secured on the property.

As the Deputy is aware, non-performing loans (NPL's) remain at an elevated level across the European banking system and addressing this issue is one of the key priorities for the Single Supervisory Mechanism (SSM). In Ireland significant progress has been made across the banking sector in reducing the level of NPLs since the financial crisis. Despite this progress, the level of NPLs in the Irish banking sector remains well above the European average. Hence the SSM has tasked the management and board of each institution with developing and implementing a strategy to address this challenge. This challenge will have to be met whether or not the State has a shareholding in the bank concerned.

The disposal of a loan or portfolio of loans is a commercial decision, and therefore a decision for the management and Board of each individual institution. As the deputy is aware, the relationships between the Minister for Finance and the banks in which the State is a shareholder are governed by a number of Relationship Frameworks which can be found on my department's website.  The Relationship Frameworks define the 'arms-length' nature of this relationship, allowing for oversight of significant actions taken while fully preserving the commercial independence of each bank, and the fiduciary responsibilities of their management and Board. A disposal such as that referred to by the Deputy is not subject to Ministerial consent but, if the value is greater than €50m in the case of the bank referred to, is subject to Ministerial consultation.

Questions Nos. 200 and 201 answered with Question No. 195.

Personal Debt

Questions (202)

Joan Burton

Question:

202. Deputy Joan Burton asked the Minister for Finance the level of car loan indebtedness, in particular personal contract plan car loans; the value and number of such loans in each of the years 2014 to 2016, inclusive, and to date in 2017, in tabular form; and if he will make a statement on the matter. [38617/17]

Written answers

Minister for Finance

I have been advised by the Central Bank that the Bank does not have figurers in relation to the level of car loan indebtedness and in particular personal contract plans (PCP) in the format requested by the Deputy. 

However the Bank has informed me that loans extended by credit institutions to private households for the purpose of car finance would be included under Consumer Credit in the monthly Table A.1 of the Credit and Banking Statistics. This table would also include hire purchase and PCP agreements provided by Irish resident banks. Full details are available at  https://www.centralbank.ie/statistics/data-and-analysis/credit-and-banking-statistics/bank-balance-sheets/bank-balance-sheets-data.

Loans extended by credit institutions to private households for car finance purposes would be included in the quarterly dataset; “Finance for other Purposes” in Table A.18 – “Credit advanced to and Deposits from Irish Private Households”. Full details are available at https://www.centralbank.ie/statistics/data-and-analysis/credit-and-banking-statistics/private-household-credit-and-deposits

On the issue more generally, the CCPC has conducted research into the car market and car finance sectors, and has conducted numerous public awareness campaigns on the issue of car finance in recent years. Its most recent campaign, which ran in June/July 2017, focused on car finance and was specifically aimed at providing information to consumers on issues in relation to PCPs, such as the fact that the consumer does not become the legal owner of the car until they make the final payment.  

On 17 July the CCPC announced that it had commenced a study of the PCP car finance market. I have been informed that the CCPC’s study is examining the experiences of consumers and assessing the information provided to them at the point-of-sale. The study will also analyse consumers’ understanding of PCPs, the structure of the product, the options available to consumers at the end of the agreement, and the protections available to PCP consumers under the existing legislative framework. I await the outcome of the study.

Income Data

Questions (203)

Joan Burton

Question:

203. Deputy Joan Burton asked the Minister for Finance the number of persons earning in excess of and less than €1 million per annum respectively in bands of €50,000; the rate of taxation for each band in each of the past three years; and if he will make a statement on the matter. [38625/17]

Written answers

Minister for Finance

I am advised by Revenue that the numbers of taxpayers by ranges of gross income in 2015, the latest year for which data are available, as well as for 2014 and 2013, are available at http://www.cso.ie/px/pxeirestat/Statire/SelectVarVal/Define.asp?maintable=rva01&ProductID=DB_rv01&PLanguage=0.

It should be noted however that this breakdown is not available by individual persons but is presented in terms of tax units (either individuals or married persons / civil partners who have elected or who have been deemed to have elected for joint assessment, who are counted as one tax unit).  As such, a jointly-assessed couple with income of €32,000 each would have total income of €64,000 and therefore appear in the income range €60,000 to €70,000.

A further extension of the table is below, detailing the number of income cases, gross income and tax deducted for those in the gross income range €275,000 to €999,999 and €1,000,000 and over. While this does not provide the full set of ranges of income specified by the Deputy, it represents the information available from Revenue at this time. The table below and those on the website also show the amount of income earned and Income Tax paid in each income range.

	2013	2013	2014	2014	2015	2015
	€275,000 - €999,999	€1,000,000 and over	€275,000 - €999,999	€1,000,000 and over	€275,000 - €999,999	€1,000,000 and over
Number of Income Cases (Number)	9,338	616	9,799	650	11,057	850
Gross Income (Million)	3,959.89	1,164.11	4,181.60	1,249.50	4,736.72	2,869.26
Tax Deducted (Million)	1,277.93	401.05	1,370.91	435.76	1,547.33	1,034.09

Tax Data

Questions (204, 207, 208, 212)

Joan Burton

Question:

204. Deputy Joan Burton asked the Minister for Finance the amount raised by the Revenue Commissioners in the clampdown on offshore bank accounts earlier in 2017; the number of persons involved; and if he will make a statement on the matter. [38626/17]

Joan Burton

Question:

207. Deputy Joan Burton asked the Minister for Finance the number of tax payers that availed of the provisions of section 56 of the Finance Act 2016, by county, in tabular form; and the amount of tax, interest and penalties received by the Revenue Commissioners. [38631/17]

Joan Burton

Question:

208. Deputy Joan Burton asked the Minister for Finance further to section 56 of the Finance Act 2016, the number of criminal prosecutions likely to arise from the failure by taxpayers to bring their affairs up to date by 1 May; if he will allocate additional resources to the Revenue Commissioners to ensure that all those that have failed to bring their affairs up to date are prosecuted; and if he will make a statement on the matter. [38632/17]

Joan Burton

Question:

212. Deputy Joan Burton asked the Minister for Finance the tax, interest and penalties received by the Revenue Commissioners arising from the enactment of section 56 of the Finance Act 2016, by the source of income and or asset previously undeclared; if he will provide an analysis of the number of defaulters by income source that provided declarations, in tabular form; and if he will make a statement on the matter. [38637/17]

Written answers

Minister for Finance

I propose to take Questions Nos. 204, 207, 208 and 212 together.

In his Financial Statement to the House on 11 October 2016, Minister Noonan indicated that he would act to restrict the opportunity for tax defaulters with outstanding tax liabilities relating to offshore matters to avail of the voluntary disclosure regime. In line with this undertaking, section 56 of the Finance Act 2016 provided that, as and from 1 May 2017, the making of a qualifying disclosure is no longer permitted where the tax liabilities involved relate to offshore matters.

The period during which a qualifying disclosure could be made to Revenue in relation to offshore matters ended on 4 May 2017. Disclosures received are still being processed and final data will be available shortly. I am advised by Revenue that the number of disclosures exceeds 2,700, with a declared value of more than €79 million. I understand also that the disclosures relate to a range of offshore matters, including foreign sources of employment-related income, foreign pensions, income from overseas property, offshore bank accounts, offshore trusts and offshore funds. A breakdown between tax, interest and penalties  of disclosures to date is as follows:

Tax:                   €48.5 million

Interest:             €24.5 million

Penalties:           €  6.0 million

The following table provides an analysis of the previously undisclosed income sources and assets that were included in the qualifying disclosures received

Source	Percent
Pension	16%
Bank Account	17%
Shares	20%
Property	29%
Offshore Fund	4%
Trust	1%
Earned Income	3%
Inheritance	1%
Multiple	4%
Unspecified	5%

I am advised by Revenue, that a full analysis of disclosures received by county is not currently available, this analysis will be available once all disclosures have been finalised.

For those who have tax liabilities relating to offshore matters and who did not act by the deadline of 4 May 2017 to address them, they now face the prospect of substantially higher penalties, publication in Revenue’s Quarterly List of Tax Defaulters and possible prosecution.

The international environment is changing, with closer cooperation and information-sharing between tax authorities worldwide aimed at identifying those who seek to hide their profits or gains offshore. Revenue is at the forefront of international developments for Automatic Exchange of Information (AEOI), which include the OECD’s Common Reporting Standard (CRS) and the US Foreign Account Tax Compliance Act (FATCA) initiative. Data received under FATCA is currently being examined and it is expected that enquiry letters will be issued later this year to relevant taxpayers, and data under CRS is not expected until 30 September 2017.  These initiatives will provide Revenue with considerable amounts of data about offshore accounts, structures and assets, and Revenue has advised me that they are committed to making full and effective use of this information to pursue rigorously anyone who attempts to use such means to evade their tax obligations. It is not possible at this point to estimate the number of prosecutions likely to arise from Revenue’s enquiries relating to data received under AEOI. However, I am advised that cases will be investigated with a view to prosecution where the facts and circumstances warrant such a course of action.

I will continue to fully support Revenue in relation to its pursuit of non-compliant taxpayers and will ensure that they have all the necessary resources required to achieve this objective.