Written Answers Nos. 144-152
144. Deputy Joan Burton asked the Minister for Finance the additional and total yield that has accrued to date in 2019 from increasing the betting tax from 1% to 2%; the projected yield for the year; the areas to which the revenue raised is apportioned for 2019; the amount allocated to the horse and greyhound training fund; and if he will make a statement on the matter. [30312/19]
View answer145. Deputy Joan Burton asked the Minister for Finance if a breakdown is available of the sports on which bets are placed from which the betting duty is raised; if he will amend the appropriate legislation to secure this or request the relevant companies to provide the data in a usable format; and if he will make a statement on the matter. [30313/19]
View answerI propose to take Questions Nos. 144 and 145 together.
Betting Tax is paid on a quarterly basis and in arrears (i.e. the returns received in April 2019 cover the period January to March 2019. The first quarter returns yielded €22 million and it is estimated that €11 million of this amount arose from the increase in the rate to 2%. The second quarterly returns for 2019 covering the period April to June are due later this month.
Overall, Betting Tax is expected to yield €91 million in 2019 (which incorporates returns made in respect of the fourth quarter of 2018, based on the 1% rate), an increase of €39 million compared to the €52 million collected in 2018. Most of the forecasted increase is due to the change in the rate.
Betting duty receipts go to the Central Fund. Section 12 of the Horse and Greyhound Racing Act 2001 provided that the Horse and Greyhound Fund would each year be financed by an amount equal to the revenue from excise duty on off-course betting in the preceding year or the year 2000 funding levels increased by reference to the Consumer Price Index, whichever was greater. This formula applied for the years 2001-2008. However since 2009, the level by which the Fund is to be increased has been decided by the Minister for Agriculture in the context of the annual budgetary process.
I am advised by Revenue that a breakdown is not collected from Bookmakers of the events on which bets are placed for the purposes of Betting Duty. Betting Duty is applied based on a rate of 2% of the value of any bet entered into with a bookmaker. It is not necessary for Revenue to collect information on the underlying events linked to bets which are liable to Betting Duty.
Accordingly, I have no plans to amend legislation for the purposes of collecting information on the events giving rise to bets which are liable to Betting Duty.
146. Deputy Joan Burton asked the Minister for Finance the number of claimants of the Knowledge Development Box in 2016, 2017 and 2018 in tabular form; the projected number of claimants in 2019 and 2020 respectively; the cost in each year to date; the projected cost in 2019 for tax planning purposes; and if he will make a statement on the matter. [30314/19]
View answer147. Deputy Joan Burton asked the Minister for Finance the value of intellectual property subject to the KDB tax rate; his plans to extend the scheme; his plans to review the scheme; and if he will make a statement on the matter. [30315/19]
View answerI propose to take Questions Nos. 146 and 147 together.
I am advised by Revenue that the most recent data on the annual cost and the number of claimants of the Knowledge Development Box (KDB) for the years 2016 and provisional figures for 2017 are published on page 18 of Revenue’s paper on 2018 Corporation Tax payments and 2017 Corporation Tax returns. This information is available at www.revenue.ie/en/corporate/documents/research/ct-analysis-2019.pdf.
In this regard, the Deputy may be aware that a claimant company has a period of up to 24 months to make a claim for KDB relief. It is anticipated that companies will make use of the 24 month time frame available. Therefore more claims in respect of the year ended 31 December 2017 may be made by September 2019.
No data in respect of 2018 will be available until the Corporation Tax returns for the accounting years ended in 2018 are filed and analysed. Likewise, data on later years are not currently available.
I am further advised that, due to the small number of KDB claims and Revenue’s obligation to protect the confidentiality of taxpayer data, it is not possible to provide further information on claimants.
As the KDB was introduced for accounting periods ending on or after 1 January 2016 it has not been subject to an ex post evaluation yet. The KDB has a sunset clause of 31 December 2020, therefore an ex post evaluation of the relief will occur prior to Budget 2021. This allows my Department time to monitor the relief and assess its continued relevance.
148. Deputy Joan Burton asked the Minister for Finance the mechanism for calculating the bank levy; the way in which it is apportioned between institutions; the estimated yield that would result in 2019 from doubling the value of the levy and individual charge that would apply to each relevant bank; and if he will make a statement on the matter. [30316/19]
View answerI am advised by Revenue that section 126AA of the Stamp Duties Consolidation Act 1999 imposes an annual levy on banks for each of the years 2017 to 2021 that is intended to raise a fixed amount of €150 million in each year. This fixed amount is apportioned between the banks on the basis of the amount of deposit interest retention tax (DIRT) paid by a particular bank in a specified year (the base year). The amount of the levy paid by a particular bank must therefore change whenever the base year changes. A change in the base year necessitates a change in the rate of the levy to ensure that the overall fixed amount of the yield is maintained.
The levy is currently charged at the rate of 59% of the DIRT paid in the 2015 base year, the base year for the years 2017 and 2018. The year 2017 is the base year for the years 2019 and 2020. In 2017 approximately €88 million DIRT was paid which was significantly lower than the amount paid in 2015. If left unchanged, the current rate of 59% would yield only €52 million when the levy for 2019 is due to be paid on 20 October 2019. The doubling of the current rate to 118% would yield approximately €104 million. The rate required to maintain the €150 million yield for the years 2019 and 2020 is 170%.
I announced in May that, to ensure that the €150 million yield is maintained, I intend to bring forward a Financial Resolution on Budget night 2019 increasing the rate of the levy to 170% to be charged on DIRT payments made in 2017. This will be subject to the enactment of Finance Bill 2019.
I am also advised by Revenue that, under section 851A Taxes Consolidation Act 1999, confidential taxpayer information may only be disclosed by Revenue in certain specified circumstances. These circumstances do not include the details of DIRT payments made by the banks who are subject to the bank levy. I cannot therefore provide details of the amount of the levy that currently applies, or that will apply, to individual banks.
149. Deputy Joan Burton asked the Minister for Finance the dividends received from the public shareholdings in Irish banks in 2018; the manner in which the revenue was used; the projected dividends expected in 2019; his policy on the use of dividends from the State shareholdings in financial resolutions; and if he will make a statement on the matter. [30317/19]
View answerThe State's shareholding in Allied Irish Banks and Bank of Ireland are directed investments under the Strategic Investment Fund (ISIF) and it receives dividends from these investments. The state's shareholding in PTSB is held by the exchequer, the bank has not paid a dividend in recent years.
The following dividends were received by the ISIF in 2018 and 2019:
|
Irish Banks |
2018 |
2019 |
|
AIB |
€232m |
€328m |
|
BOI |
€17m |
€24m |
Please note that the dividend received by the ISIF in each year relates to the previous financial year in the banks. Hence the dividend received in 2018 relates to AIB's/BOI's 2017 financial year etc.
The ISIF allocates the dividends received into its discretionary portfolio for investment. Under the ISIF's investment strategy ISIF investments must be made on a commercial basis and in a way that supports economic activity and employment in the State. The latest strategy was announced on 1st February 2019 and can be found at https://isif.ie/news/press-releases/ireland-strategic-investment-fund-announces-new-investment-strategy-to-focus-on-5-key-priority-themes-and-publishes-update-on-2018-investment-performance.
The Deputy should note that the Government is not permitted to make withdrawals from the Discretionary Portfolio before 2025. Beyond 2025, the ISIF can make a dividend payment of up to 4% per annum to the Exchequer. Further details can be found in this publication on the ISIF from the Parliamentary Budget Office (PBO): https://data.oireachtas.ie/ie/oireachtas/parliamentaryBudgetOffice/2019/2019-02-14_an-overview-and-analysis-of-the-ireland-strategic-investment-fund_en.pdf.
150. Deputy Joan Burton asked the Minister for Finance the dividends received from publicly owned enterprises and semi-State companies in 2018, in tabular form; the projected dividends in 2019; if he has requested additional or special dividends in 2019; his policy on these dividends; and if he will make a statement on the matter. [30318/19]
View answerThe following table lists the dividends paid to the Exchequer by commercial State-sponsored bodies in 2018. Expected dividends from individual bodies is commercially sensitive information, however, as per the Stability Programme Update 2019, I have budgeted for a total of €249.4 million in dividend receipts in 2019, of which €68.6 million has been received to end-June.
Though a special dividend is expected from Ervia in 2019 in respect of the sale of Bord Gáis Energy, I have not requested any further special or additional dividends in 2019. Dividends are received to the Central Fund and are used for general expenditure.
Information on such dividends and receipts paid to the Exchequer are published on a monthly basis by my Department in the Fiscal Monitor which is available at www.gov.ie/en/collection/bf14dc-fiscal-monitors/.
Commercial State Sponsored Body (CSSB) Dividends
|
- |
2018 Outturn |
|
Irish Aviation Authority |
19,458,000 |
|
Electricity Supply Board |
33,056,621 |
|
Dublin Port Company |
12,173,000 |
|
Coillte Teoranta |
15,000,000 |
|
Dublin Airport Authority |
37,400,000 |
|
Port of Cork Company |
714,000 |
|
Eirgrid |
4,000,000 |
|
Ervia |
139,089,000 |
|
Port of Waterford |
0 |
|
Shannon Foynes Port |
300,000 |
|
Total |
261,190,621 |
151. Deputy Darragh O'Brien asked the Minister for Finance further to Parliamentary Question No. 42 of 3 December 2014, his views on whether the two supplements specified in the question, probiotics and glucosamine could legally qualify as zero rated food supplements; and if he will make a statement on the matter. [30362/19]
View answer152. Deputy Darragh O'Brien asked the Minister for Finance the reason it is not possible to retain the zero rate of VAT on food supplements as a class of food products recognised by the State in legislation in view of the fact that this class of product has been sold at the zero rate of VAT since that rate was first introduced in 1973 and continues to be sold at that rate to date; and if he will make a statement on the matter. [30363/19]
View answerI propose to take Questions Nos. 151 and 152 together.
The standard rate of VAT applies to food supplements. However, a Revenue concession allowed the zero rate to be applied to certain types of vitamins, minerals and fish oils. Because of difficulties in interpretation, the Revenue Commissioners decided to remove this concession with effect from 1 March 2019 so that all food supplements will be charged at the standard VAT rate. However, independent of Revenue’s decisions on interpretation, I agreed during the recent Finance Bill to put in place a process, that will conclude in the 2019 Tax Strategy Group Paper, to examine some of the policy choices around the VAT treatment of food supplements. Revenue responded by delaying the withdrawal of its concessionary zero rating of the food supplement products concerned until 1 November 2019. This will allow time for the enactment of any legislative changes in the context of Budget 2020.
My Department has recently concluded the public consultation on the taxation of food supplement products. The consultation sought input from a wide range of interested parties, including health and nutrition experts as well as my colleague the Minister for Health, to ensure that any legislative changes brought forward are evidence based. Officials in my department reviewed the submissions received and this review was presented to a meeting of the Tax Strategy Group (TSG) on 9th July. The TSG Papers will be published on the Department's website shortly.
With regard to Parliamentary Question No. 42 of 3 December 2014, and the two supplements specified in the Question, probiotics and glucosamine, the case remains that there is insufficient information provided to make a determination. If the Deputy could provide more information on the food supplements in question, the Revenue Commissioners can advise on their correct VAT treatment as appropriate.
It should also, however, be noted that human oral medicines, including certain folic acid and other vitamin and mineral products, licensed by the Health Products Regulatory Association will continue to apply at the zero rate of VAT. Infant foods will also continue to be zero rated.
