Dáil Éireann Debate, Thursday - 18 January 2018
48. Deputy Mattie McGrath asked the Minister for Finance his plans to address concerns that a disproportionate amount of State revenue is generated in Dublin city and county; and if he will make a statement on the matter. [2407/18]
View answerI would not agree with the Deputy that a disproportionate amount of State revenue is generated in Dublin city and county. Taxes are not levied geographically so revenue is generated according to where taxpayers, individual or corporate, are based and obviously a significant number of these are in the greater Dublin area.
The Revenue Commissioners produce an annual report on the distribution of identifiable net taxation receipts by county, covering the main elements of all the major tax headings though I would note that not all tax headings are amenable to being reported on a county basis. The report indicates that for 2016, approximately €20.8 billion or around 56 per cent of the total net receipts, which can be classified by county, is derived from Dublin. This is broadly in line with the concentration of economic activity in Dublin. The report can be viewed at https://www.revenue.ie/en/corporate/documents/statistics/receipts/net-receipts-by-county.pdf
I would note also, that in the case of LPT (Local Property Tax), statistics published by the Revenue Commissioners indicate that in 2017 LPT returns were made in respect of 1.906 million properties and that €448 million was collected in LPT. The four Dublin local authorities (Dublin City, Dún Laoghaire, Fingal and South Dublin) comprise in the order of 515,400 of these properties or 27% of the total. Of the total LPT collected in 2017, €167.6 million, or 37% came from these four local authorities. LPT is based on the market value of a property and the yield from the Dublin authorities reflects the higher market values of properties in urban areas. Full details can be found at https://www.revenue.ie/en/corporate/documents/statistics/lpt/local-property-tax-2017.pdf Again, I would not consider these figures to be disproportionate.
That said, the Deputy will be aware of commitments made in respect of regional development in the Programme for a Partnership Government. In particular I would draw his attention to the draft National Planning Framework developed by the Department of Housing, Planning and Local Government and also the Action Plan for Jobs Strategy coordinated by the Department of Business, Enterprise and Innovation (D/BEI) which has, as one of its key initiatives, stimulating regional growth. D/BEI are aware that creating more jobs in the regions is a priority and they note that since 2011, jobs created by multinationals in regional Ireland have increased by 28% and there are now over 122,000 people employed in 649 different IDA Ireland client companies outside of Dublin. However, while progress has been made, more work remains to be done. We are certainly focused on doing everything we can to deliver the fairest possible spread of investment across the country.
My own Department operates a number of tax incentives to encourage investment and of course these are open to all eligible individuals or organisations, nationwide. In particular I would note that Section 486C of the Taxes Consolidation Act 1997 provides for a three-year relief from corporation tax on the trading income and certain gains of new start-up companies, with the value of the relief being linked to the amount of employer’s PRSI paid by a company, the measure is intended to encourage economic activity and employment throughout Ireland. The relief is available for the first three years of trading and companies with a total corporation tax liability of up to €40,000 in a year can qualify. It was extended by Finance Act 2015 to end December 2018.
In addition the ‘Key Employee Engagement Programme’ (KEEP), announced in Budget 2018, seeks to support small to medium enterprises throughout the country. KEEP has the objective of assisting SME’s in Ireland in competing with larger enterprises to recruit and retain key employees. Such companies with growth potential may not have the cash resources available to offer comparable salary packages to large, established businesses. However, where the employee believes in the growth potential of the firm, and by extension the potential for the company shares to increase in value, remuneration in the form of share options may improve the attractiveness of the SME employment offer. KEEP provides that the value of the benefit to the employee on exercise of a qualifying share option will be subject to tax when the employee subsequently disposes of the shares, i.e. when sales proceeds would be available to pay the tax due. In the absence of this incentive, the share-option gain would be liable to income tax, USC and PRSI at the time of the exercise of the option.
