Tax Yield

Questions (112)

Catherine Martin

Question:

112. Deputy Catherine Martin asked the Minister for Finance the revenue obtained each year from the parking levy on employee car parking in key urban areas to dissuade use of the private car for commuting purposes as provided for under action 8 of the Smarter Travel Transport Policy for Ireland 2009 - 2020; and if he will make a statement on the matter. [2574/19]

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Written answers (Question to Finance)

Finance (No. 2) Act 2008 facilitated the introduction of a car parking levy in urban areas. The enabling of the measure would require a Ministerial Order. Such an Order has not been made to date and consequently there has been no revenue collected nor any employees levied.

Tax Code

Questions (113)

Darragh O'Brien

Question:

113. Deputy Darragh O'Brien asked the Minister for Finance the details of the decision of the Revenue Commissioners to commence taxing medical services provided by a company (details supplied) to workers and pensioners who have worked with the company; the rationale for the decision; and if he will make a statement on the matter. [2388/19]

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Written answers (Question to Finance)

As outlined in my reply to Parliamentary Questions 139, 140 and 147 of 11 December 2018, the Deputy will be aware that the administration of the tax code is a matter for Revenue. The Deputy will also be aware that, in accordance with S851A of the Taxes Consolidation Act 1997 Revenue does not comment on the tax affairs of individual taxpayers.

The position in tax law is that where an employer provides free access to medical services to employees or provides refunds to employees in relation to medical services paid for by the employees, the employees are subject to tax on the services or refunds received. However, Revenue does not seek to apply benefit-in-kind where employees have free access to a general practitioner employed or retained by their employer. In addition, one medical check-up per year, and check-ups that are mandatory for work purposes, may also be provided. These exceptions are set out in published Revenue guidelines, and they apply as appropriate to all employers.

Where free access to medical services is provided to retired employees by their former employer, these services are not taxable. If retired employees are reimbursed by their former employer for medical services, the amounts reimbursed are taxable.

The relevant tax legislation applies to all employers equally and there are no exceptions to the rules for particular employers, employees or retired employees.  The way any company provides services to its employees or retired employees is entirely a matter for that company to agree with their employees and retired employees.

Strategic Banking Corporation of Ireland Data

Questions (114)

Billy Kelleher

Question:

114. Deputy Billy Kelleher asked the Minister for Finance the targets the Strategic Banking Corporation of Ireland set for lending to SMEs in 2017 and 2018; and the progress to date on same in tabular form. [2406/19]

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Written answers (Question to Finance)

The Strategic Banking Corporation of Ireland (SBCI) is Ireland’s national promotional institution. The purpose of the SBCI is to deliver effective financial supports to Irish SMEs that address failures in the Irish SME finance market as well as encouraging and promoting competition and innovation, and the efficient and effective use of EU resources and financial instruments. The SBCI achieves this through the provision of low cost liquidity and risk-sharing guarantee activities that support the provision of appropriately priced, flexible funding to Irish SMEs.

The SBCI does not lend directly. Rather, the SBCI operates through its partner finance providers, known as on-lenders. The SBCI has provided funding to a mixture of both banks and non-bank finance providers; the SBCI currently has three bank and three non-bank on-lenders: AIB; Bank of Ireland; Ulster Bank; Finance Ireland; Bibby Financial Services Ireland and FEXCO Asset Finance.

The SBCI aims to ensure on-lenders and financial intermediaries maximise the benefit and the service provided to Irish SMEs as well as protecting taxpayer money and the investment of both State and European institutions.  I am advised that the SBCI is keen to work with any lender, large or small, that can demonstrate it can deliver the required funding advantage to eligible SMEs on terms that protect taxpayer money.

The Strategic Banking Corporation of Ireland commenced its activities in March 2015. To the end of March 2018, the total amount of SBCI supported lending activity, including loans made under the SBCI’s risk-sharing guarantee Schemes, was €972 million to 24,002 Irish SMEs supporting 129,300 jobs. The SMEs who received SBCI finance are from all sectors of the Irish economy and have a wide geographical spread, with approximately 85% of loans going to small businesses based outside of Dublin.

The SBCI is currently seeking to broaden its distribution capability and market coverage thereby serving to meet the needs of Irish SMEs and encourage and promote competition in the SME finance market. The SBCI continues to work on developing new innovative products, such as the Brexit Loan Scheme, which was launched in March 2018. This €300 million scheme is to provide working capital support to SMEs to enable them to adapt and innovate in response to the challenges posed by Brexit.

Following on from launch of the Brexit Loan Scheme, a Future Growth Loan Scheme has been developed to provide long-term investment financing for Irish businesses to help them strategically invest in a post-Brexit environment. There is an absence of financing available for businesses in excess of seven years and the Future Growth Loan Scheme is intended to provide finance of eight to ten years for investment in process and organisational innovation, and investment in tangible and intangible assets on agricultural holdings linked to primary agricultural production. The SBCI recently launched an open call for participating finance providers to offer this Scheme through, which is expected to launch once successful lending partners have been appointed.

Chronological Table of SBCI Funds and Guarantees Committed to On-Lenders

    Date   

   On Lender   

   Liquidity (Funds)  

   Risk Sharing (Guarantees Provided)   

December 2014

Bank of Ireland

€200m

 

February 2015

Allied Irish Bank

€200m

 

October 2015

Finance Ireland

€51m

 

November 2015

Merrion Fleet

€25m*

 

November 2015

Allied Irish Bank

€200m

 

December 2015

Ulster Bank

€75m

 

May 2016

First Citizen Agri Finance

€40m**

 

June 2016

Bibby Financial Services Ireland

€45m

 

November 2016

Fexco Asset Finance

€70m

 

January 2017

Bank of Ireland

 

€65m

January 2017

Allied Irish Bank

 

€60m

January 2017

Ulster Bank

 

€25m

March 2018

Bank of Ireland

 

€128m

March 2018

Allied Irish Bank

 

€122m

March 2018

Ulster Bank

 

€50m

May 2018

Bibby Financial Services Ireland

€25m

 

 Total

 

€531m

€450m

*Facility closed in July 2017 following the sale of Merrion Fleet to Société Générale

**Facility closed in October 2018 following the raising of commercial funding by First Citizen Agri Finance.

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 in the medium to long term.

Strategic Banking Corporation of Ireland

Questions (115)

Billy Kelleher

Question:

115. Deputy Billy Kelleher asked the Minister for Finance the status of the process to review the Strategic Banking Corporation of Ireland by the NTMA. [2407/19]

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Written answers (Question to Finance)

The Strategic Banking Corporation of Ireland, known as the SBCI, has been Ireland’s national promotional institution since it was established in September 2014. The SBCI’s role as a national promotional institution is to focus is delivering effective financial supports to Irish SMEs, facilitating the availability of appropriate and flexible finance to Irish small businesses, and encouraging competition and innovation in the SME finance market.

As the Deputy will be aware, since the SBCI began its activities in March 2015, the total amount of SBCI supported lending activity, including loans made under the SBCI’s risk-sharing guarantee schemes, was €972 million to 24,002 Irish SMEs supporting 129,300 jobs. The SMEs who received SBCI finance are from all sectors of the Irish economy and have a wide geographical spread, with approximately 85% of loans going to small businesses outside Dublin and 26% of loans going to the agriculture sector.

The Minister for Finance is the sole shareholder in the SBCI and a significant amount of SBCI activity is supported by a State Guarantee from the Minister for Finance; this is provided for in the Strategic Banking Corporation of Ireland Act 2014. Such guarantees constitute a contingent liability on the State’s balance sheet, as the Deputy knows.

As the fourth anniversary of the SBCI incorporation has now passed, it is timely and opportune to engage an independent external consultant to undertake a review of the SBCI and its activities as part of developing its future strategy. It is also important from the perspective of prudent and sustainable management of public finances and best practice for such reviews to be undertaken.

To complete this process, the NTMA issued a public Request for Tender on etenders.gov.ie on 8 January 2019 for those services with a deadline for receipt of tenders of 25 February 2019. I am advised that it is anticipated that a contract will be awarded in March 2019 and the review is expected to be completed within approximately 8-10 weeks.

The SBCI is a valuable policy instrument for supporting Irish small businesses which are vital to sustainable economic growth and development and employment in Ireland.

Tax Data

Questions (116)

Billy Kelleher

Question:

116. Deputy Billy Kelleher asked the Minister for Finance the number of SMEs that had interest applied on late payment of income tax based on the latest annual information; the rate of interest applied on such late payments here; and the rate of interest applied in the UK and in other EU and OECD countries in tabular form. [2408/19]

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Written answers (Question to Finance)

I am advised by Revenue that interest on late payment statistics are collated on the basis of interest charges paid and not on the number of SMEs charged.  A total of 14,244 taxpayers paid interest amounting to €33.37m in 2017 in respect of the late payment of Income Tax, including interest charged as part of audit settlements.

The current rate of interest in respect of late payment of Income Tax is 8% per annum (0.0219% per day).

It is not possible to provide an EU or OECD tabular breakdown in the manner requested by the Deputy because the systems operating across the various jurisdictions are not directly comparable. For example, some jurisdictions apply surcharges and penalties in addition to interest charges, while others apply different rates for different taxes and for different periods of default.   However, detailed data on penalties and interest for non-compliance/failure to pay tax on time in the UK, EU and OECD countries is contained in an OECD/Forum on Tax Administration publication entitled “Comparative Information Series”, details of which can be found at:

http://www.oecd.org/tax/forum-on-tax-administration/publications-and-products/comparative/CIS-2010.pdf.

The data is contained in Table 57 on page 260 of that publication.

VAT Rate Application

Questions (117)

Michael McGrath

Question:

117. Deputy Michael McGrath asked the Minister for Finance if there will be a change in VAT applied to food supplements from 1 March 2019; if so, the number of food supplement products impacted; the type of food supplements impacted; the expected revenue from the change; and if he will make a statement on the matter. [2435/19]

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Written answers (Question to Finance)

Under the VAT Consolidation Act 2010, the standard rate of VAT applies to all food supplements, which are not foods in the ordinary and everyday meaning of the word.  A long-standing concession provided for in Revenue Commissioners guidance permitted the zero rating of certain types of food supplements (vitamins, minerals and fish oils).  New guidance was published on 27 December 2018 concerning the rate of VAT that applies to food supplements. The new guidance withdraws the concessionary application of the zero rate to certain food supplements, and outlines that these products will be liable at the standard rate from 1 March 2019. Products, including folic acid and vitamin products, licensed by the Health Products Regulatory Agency (HPRA), will continue to be liable at the zero rate.

The operation of the concession became extremely problematic as a result of efforts by certain businesses in the industry to extend the concession beyond the scope permitted. Consistent challenges to Revenue guidance and decisions on the VAT rating of products gave rise to serious concerns about compliance within the industry and unfair competition between compliant and non-compliant businesses.

Traders are not required to separately identify the yield generated from a particular activity or product type on their VAT return. Therefore, it is not possible to provide an estimate of the yield from an increase of the VAT rate for the food supplement products affected, but it is expected that the additional yield will not be substantial. For the same reason, it is not possible to identify the number of products impacted. 

Excise Duties

Questions (118, 143)

Pearse Doherty

Question:

118. Deputy Pearse Doherty asked the Minister for Finance the position on the proposed amendments to the excise structures directives to allow a reduction in excise duties for small cider producers; his views on a similar change to allow an exemption for small commercial distillers; and if he will make a statement on the matter. [2503/19]

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Michael McGrath

Question:

143. Deputy Michael McGrath asked the Minister for Finance his views on whether excise tax should be reduced for small commercial distillers in line with that already in place for small brewers; and if he will make a statement on the matter. [2873/19]

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Written answers (Question to Finance)

I propose to take Questions Nos. 118 and 143 together.

EU Directive 92/83/EEC deals with the harmonization of the structures of excise duties on alcohol and other alcoholic beverages.  This Directive provides that Member States may apply reduced rates of excise for small beer producers and also for small distilleries (spirit drinks producers). Ireland has exercised the option to apply reduced rates of excise for small beer producers.

Having regard to public health concerns, Directive 92/83/EEC set the production threshold for the application of excise relief for small distilleries at 10 hectoliters of pure alcohol per annum. In fact only seven Member States apply an excise relief for small distilleries and the commercial viability of such a scale of production was found by the European Commission to be very limited, most beneficial to ancillary producers.   

A proposal to amend the current Directive 92/83/EEC was published by the European Commission in 2018. The legislative proposal includes an option for Member States to apply reduced rates of excise for cider and other fermented drinks, but it does not amend the existing small distilleries threshold nor is there any discernible interest among Member States in making any such amendment.

Tax Code

Questions (119)

Kevin O'Keeffe

Question:

119. Deputy Kevin O'Keeffe asked the Minister for Finance if consideration will be given to including the skill of hurley making in section 195 of the Taxes Consolidation Act 1997 to enable the Revenue Commissioners exempt this skill from payment of income tax (details supplied). [2516/19]

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Written answers (Question to Finance)

Section 195 of the Taxes Consolidation Act 1997 provides for the exemption of certain earnings of writers, composers and artists and allows the Revenue Commissioners to make determinations in respect of artistic works in the following categories only:

1. a book or other writing

2. a play

3. a musical composition

4. a painting or other like picture

5. a sculpture

Guidelines were drawn up by the Arts Council and the then Minister for Arts, Heritage and the Gaeltacht, for determining whether a work which falls within the scope of the activities listed in the section is an original and creative work and whether it has, or is generally recognised as having, cultural or artistic merit and consequentially can qualify for the exemption.

As identified by the Minister for Finance, Mr. Charles Haughey TD, in his budget speech in 1969, the policy basis of the artists’ exemption is to provide "further encouragement to the creative artists in our midst and to help create a sympathetic environment here in which the arts can flourish".

In light of this policy intent, I do not consider it appropriate to extend the exemption as proposed by the Deputy, as the activity described does not fall into the realm of artistic endeavor.

Tax Code

Questions (120, 121)

Willie O'Dea

Question:

120. Deputy Willie O'Dea asked the Minister for Finance if he has reviewed the tax treatment of widowers; if the way in which widowers are treated in comparison to married or cohabiting couples has been considered; his views on whether they are financially disadvantaged in comparison; and if he will make a statement on the matter. [2528/19]

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Willie O'Dea

Question:

121. Deputy Willie O'Dea asked the Minister for Finance if consideration has been given to extending the widowed parent tax credit beyond five years; if further consideration has been given to altering the tax relief available in the five year period; the estimated cost of extending the relief to ten years; the estimated cost of maintaining the relief at €3,600 for five years; and if he will make a statement on the matter. [2529/19]

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Written answers (Question to Finance)

I propose to take Questions Nos. 120 and 121 together.

The Irish Income Tax code has many favourable provisions relating to the tax treatment of widowed persons and, in particular, widowed parents.

In the year of bereavement, a widowed person is entitled to the same personal tax credits as a married couple.  A widowed parent tax credit is then available to a widowed person with dependent children for the five years following the year of bereavement.  This credit tapers out over the five years and amounts to €3,600 in year one, €3,150 in year two, €2,700 in year three, €2,250 in year four, €1,800 in year five. This credit was introduced in 1991 specifically to assist such parents in the transition from married to widowed status.  The estimated cost of maintaining the relief at €3,600 for five years is of the order of €1.7m. This is based on 2016 data and assumes the number of claims for this credit will remain static at 2016 levels. It also does not take account of future economic growth, or the resulting change in income levels, which would have an effect on the taxable income and as a result the ability of taxpayers to fully absorb the credit.

In relation to the estimated cost of extending the relief to ten years, at the current tapering rate of €450 per year there would only be 3 additional years before the credit is reduced to zero (€1350 in year 6, €900 in year 7, €450 in year 8). The cost of extending the relief to include the 3 additional years is estimated to be of the order of €5m which would be fully materialised after a period of 3 years, again assuming the number of claims for this credit will remain static at 2016 levels and it also does not take account of future economic growth, or the resulting change in income levels, which would have an effect on the taxable income and as a result the ability of taxpayers to fully absorb the credit.

However, both during and after this five-year period a widowed person with dependent children is also entitled to claim the Single Person Child Carer Credit (SPCCC), in addition to the single personal credit. This ensures that their basic personal credits, before taking into account the additional widowed parent credit, will be equivalent to those granted to a married couple while he or she continues to have dependent children.

Widowed parents who qualify for the SPCCC are also entitled to an increased standard rate band of €39,300. This compares favourably with the single person’s tax band of €35,300 currently. This ensures that in 2019 a widowed parent will not be subject to the higher rate of income tax until their taxable income exceeds €39,300. 

Furthermore, widowed persons without dependent children, who therefore do not qualify for the SPCCC or the widowed parent credit, are entitled to the widowed person tax credit of €540 per year in addition to the normal tax credits for a single person. 

It should also be noted that widowed persons who are in receipt of the social welfare non-contributory widow’s pension are not liable to the Universal Social Charge on that payment.

I am satisfied that the significant provisions currently in place relating to the tax treatment of widows and widowed parents are targeting limited resources to where they are most needed.

Brexit Issues

Questions (122)

James Browne

Question:

122. Deputy James Browne asked the Minister for Finance the steps he has taken to date and plans to take in preparation for post-Brexit customs checks at ports here, specifically Rosslare Europort; and if he will make a statement on the matter. [2587/19]

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Written answers (Question to Finance)

The continued free-flow of trade through our ports and airports is a key priority for the Government. Revenue have undertaken and continue to undertake significant preparations to facilitate this post-Brexit.

During 2018, Revenue chaired an Inter-Departmental group which was established to consider the adequacy of port and airport infrastructure and facilities, post-Brexit. The group included representatives from Revenue; the Department of Agriculture Food and the Marine (DAFM); the Department of Health; the HSE’s Environmental Health Service (EHS); the Department of Transport, Tourism and Sport (DTTS); the OPW; the Department of Justice; and An Garda Síochána. 

I am advised that the group considered the requirements for both the ‘Central Case’ and the ‘no-deal’ scenarios and the physical infrastructure requirements to facilitate and support the movement of legitimate trade; including requirements of Revenue; DAFM; and the HSE’s EHS; to carry out any necessary Customs interventions and Sanitary and Phytosanitary (SPS) checks at ports and airports.  The group identified that infrastructure was required at Dublin Port, Rosslare Europort and Dublin Airport and agreed proposals on the nature and scale of new or extended facilities that would be required.

In relation to Rosslare Europort, the group identified the infrastructural requirements including service delivery and accommodation requirements. Following a Government Decision in September 2018, the OPW were tasked with leading the engagement with relevant stakeholders, with a view to ensuring that the necessary additional infrastructure for both the central case and the no-deal scenarios becomes operational in a timely manner. This work is ongoing and it is planned to have temporary facilities in place to cater for a no-deal scenario in March 2019 as well as permanent facilities in place by 1 January 2021.

Ireland Strategic Investment Fund Investments

Questions (123, 124, 125, 126)

Michael McGrath

Question:

123. Deputy Michael McGrath asked the Minister for Finance the assets held in the discretionary portfolio in the Ireland Strategic Investment Fund as at 31 December 2018 or for when the latest figures are available in tabular form; and if he will make a statement on the matter. [2625/19]

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Michael McGrath

Question:

124. Deputy Michael McGrath asked the Minister for Finance the return from the discretionary portfolio in the Ireland Strategic Investment Fund in 2018; and if he will make a statement on the matter. [2626/19]

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Michael McGrath

Question:

125. Deputy Michael McGrath asked the Minister for Finance the breakdown of the directed portfolio in the Ireland Strategic Investment Fund as at 31 December 2018, in tabular form; and if he will make a statement on the matter. [2627/19]

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Michael McGrath

Question:

126. Deputy Michael McGrath asked the Minister for Finance the return from the directed portfolio in the Ireland Strategic Investment Fund in 2018; and if he will make a statement on the matter. [2628/19]

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Written answers (Question to Finance)

I propose to take Questions Nos. 123 to 126, inclusive, together.

I am informed by the Ireland Strategic Investment Fund (ISIF) that the Fund information for 31 December 2018 is not yet available, however preliminary information will be published no later than 1 February 2019.

In the interim, please find as follows the requested information for 30 June 2018.

The assets in the ISIF Discretionary Portfolio amount to €8.9 billion. The return of the ISIF Discretionary Portfolio has been +2.3% per annum since inception and -0.3% for the first half of 2018.

The table contains a breakdown of the Directed portfolio.

Bank of Ireland (Ordinary Shares)

€1.0bn

AIB (Ordinary Shares)

€9.0bn

Total Bank Investments

€10.bn

Cash

€0.2bn

TOTAL Directed Portfolio value

€10.2bn

The return of the Directed portfolio has been +5.3% per annum since inception and -10.9% for the first half of 2018.

Departmental Expenditure

Questions (127)

Micheál Martin

Question:

127. Deputy Micheál Martin asked the Minister for Finance if he will publish the airline costs for his Department for 2018; and if he will make a statement on the matter. [2692/19]

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Written answers (Question to Finance)

In response to the Deputy’s question, my Department spent €318,000 on airline costs in 2018. 

An amount of €136,000 of these costs is recoupable in respect of meetings run by the Council of the European Union and other bodies such as the European Commission.

The above figures are rounded to the nearest €100.

Departmental Expenditure

Questions (128)

Micheál Martin

Question:

128. Deputy Micheál Martin asked the Minister for Finance if he will publish the cost of newspapers in his Department in 2018; and if he will make a statement on the matter. [2709/19]

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Written answers (Question to Finance)

In response to the Deputy’s question, my Department spent €8,100 on newspapers in 2018.

In addition, my Department holds a number of corporate licenses giving online access to publications such as the Irish Times, Financial Times and New York Times which cost €25,600 in 2018.

The above figures are rounded to the nearest €100.