Written Answers Nos. 182-206
182. Deputy Micheál Martin asked the Minister for Finance if he has spoken with his French counterpart recently regarding digital taxation; his views on the fact that France has introduced 5% taxation on same; and if he will make a statement on the matter. [32783/19]
View answerAs the Deputy has noted, France has recently introduced a tax on the activities in France of certain companies which is similar in design to the Digital Services Tax previously proposed by the European Commission. As the Deputy will recall, this Commission proposal ultimately failed to find agreement at ECOFIN in March 2019 and it was agreed that the focus would move towards OECD discussions in order to address the challenges arising from the digitalisation of the economy.
Domestic taxation is a Member State competency and it would not be appropriate for me to comment further on a measure introduced by another Member State. I have not spoken with Minister La Marie since the introduction of this tax. I do have regular engagement with him both bilaterally and through our shared attendance at EU, OECD or other global meetings.
Ireland’s position on the broader issue of tax and digitalisation remains that the challenges arising for the digitalisation of the economy are global in nature and are best addressed by seeking an agreement at a global level which is firmly rooted in the principle that taxation should occur where value is created.
183. Deputy Michael McGrath asked the Minister for Finance if persons that work as home tutors and that are paid for this work by the Department of Education and Skills are considered as employees or as self-employed persons; if such persons are entitled to tax relief on expenses incurred in the performance of their duties; if so, the way in which they may claim such relief; and if he will make a statement on the matter. [32802/19]
View answerI am advised by Revenue that the home tutors referred to by the Deputy are employed under a contract of service i.e. they are employees. They are engaged by the parent(s) subject to satisfying criteria specified by the Department of Education and Skills. Prior to September 2015, the home tutors were paid by the parent(s) from grants paid to them by the Department of Education and Skills.
As a consequence of a Revenue audit, the Department of Education and Skills agreed to operate the PAYE system on payments to the home tutors. This facilitates ease of administration, as the payments originate from the Department, which also avoids placing the obligation to register as employer, and administer the PAYE system, on each individual parent.
With regard to the tax treatment of expenses incurred by home tutors, such expenses are governed by section 114 of the Taxes Consolidation Act 1997. That section provides that a tax deduction may be given where a tutor is necessarily obliged to incur travel expenses in the performance of the duties of employment or otherwise incurs expenses wholly, exclusively and necessarily in the performance of the duties of employment.
It should be noted that any employee who is obliged to defray expenses incurred wholly, exclusively and necessarily in the course of their employment may make a claim to Revenue to deduct such expenses from their taxable emoluments.
185. Deputy John Brassil asked the Minister for Finance the tax take from the tourism and hospitality sector for the first six months of 2018, for the full 2018 tax year and the first six months of 2019, respectively; the projected tax take for 2019; and if he will make a statement on the matter. [32820/19]
View answerI am advised by Revenue that the tax collection from businesses in the tourism and hospitality sector for 2018 is included in “Accommodation & food services” in statistics published on Revenue’s website at https://www.revenue.ie/en/corporate/information-about-revenue/statistics/receipts/receipts-sector.aspx.
Six monthly data by industry sector is not prepared by Revenue as most of the major taxes (including income and corporation tax) are charged in respect of yearly income or profits. The website will be updated to reflect a sectoral breakdown in respect of 2019 tax receipts at the end of the year.
186. Deputy Pearse Doherty asked the Minister for Finance the projected general Government balances based on the scenario A update in the summer economic statement from 2020 to 2024 in gross terms and as a percentage of GDP and GNI*, respectively in tabular form. [32862/19]
View answerThe following table shows the projected general government balance in nominal terms and as a percentage of GDP and GNI* for the period 2020-2024, based on Scenario “A” as set out in the Summer Economic Statement (SES).
In addition, it should be noted that the general government balance incorporates the revised anticipated annual spending plans (i.e. 3.25 per cent year-on-year current spending growth from 2021 onwards) as outlined in the SES.
|
|
2020 |
2021 |
2022 |
2023 |
2024 |
|
General Government Balance (€ millions) |
1,235 |
2,030 |
2,885 |
3,945 |
4,820 |
|
General Government Balance as % of GDP |
0.4% |
0.6% |
0.8% |
1.0% |
1.2% |
|
General Government Balance as % of GNI* |
0.6% |
0.9% |
1.3% |
1.7% |
1.9% |
187. Deputy Pearse Doherty asked the Minister for Finance the projected structural balance as a percentage of GDP and GNI* from 2020 to 2024 based on the scenario A update in the summer economic statement. [32863/19]
View answerGiven the uncertainty regarding the final form that Brexit will take, the Summer Economic Statement (SES) presented two budgetary scenarios; an “orderly” Brexit scenario (Scenario A) and a “disorderly” Brexit scenario (Scenario B). The Government will decide in September – based on information available at the time - which scenario will form the basis for Budget 2020.
The “orderly” Brexit scenario (Scenario A) is presented in Table 4 of the SES. This scenario includes an increase in current expenditure of 3¼ per cent each year from 2021 onwards. This compares with a 2½ per cent increase assumed in the SPU. An expenditure reserve of up to €0.2 billion, which is being established in 2020 to accommodate funding requirements for the National Broadband Plan and the Children’s Hospital is also included.
The most recently published estimates for the cyclical budgetary component and the structural balance were included in this year’s Stability Programme Update (SPU). Reflecting the expenditure assumptions outlined above and the macroeconomic forecasts presented in the SPU, projections of the structural balance based on Scenario A are provided below:
|
Scenario A: “Orderly” Brexit |
Year |
Year |
Year |
Year |
Year |
|
as per cent of GDP |
2020 |
2021 |
2022 |
2023 |
2024 |
|
Structural Balance* |
-0.1 |
0.0 |
0.0 |
-0.1 |
-0.1 |
These projections are consistent with the Department of Finance’s preferred GDP-based estimate of the output gap, as presented in the SPU, which provides more intuitive estimates of the cyclical position than the EU Commission’s harmonised methodology, thereby helping to better inform fiscal policymaking. Projections of the structural balance are not available as a share of GNI*.
188. Deputy Pearse Doherty asked the Minister for Finance the number of times he, his predecessor and his officials met with representatives of Irish real estate funds, IREFs, and real estate investment trusts, REITs, since 2013 in a lobbying capacity in relation to changes to budget 2013 and regarding the Finance Acts 2016 and 2017; and the proportion of such meetings which comprise of total lobbying meetings in the same period, by event (details supplied) in tabular form. [32864/19]
View answer189. Deputy Pearse Doherty asked the Minister for Finance the number of times he, his predecessor and his officials met with representatives of Irish real estate funds since 2015 in a lobbying capacity; and the proportion of such meetings which comprise of total lobbying meetings in the same period. [32865/19]
View answerI propose to take Questions Nos. 188 and 189 together.
I wish to advise the Deputy that due to the level of detail being requested in the question, it is not possible to provide the information sought in the time available for reply, I have therefore instructed my officials to contact the Deputy's office with a view to providing the information requested, where possible, through alternative means.
190. Deputy Pearse Doherty asked the Minister for Finance the lobbying engagements his predecessor had since August 2015 and he has had since June 2017 by sector and industry. [32866/19]
View answer191. Deputy Pearse Doherty asked the Minister for Finance the lobbying engagements his predecessor had since August 2015 and he has had since June 2017 by purpose of meeting, that is, budgetary matters or use of public funds. [32867/19]
View answerI propose to take Questions Nos. 190 and 191 together.
The Deputy will be aware that the Regulation of Lobbying Act 2015 provides for a register of lobbying to make information available to the public on the identity of those communicating with ‘Designated Public Officials’ on policy, legislative matters, or prospective decisions.
Under the Regulation of Lobbying Act, all relevant communications with Designated Public Officials (DPOs), including the Minister for Finance, must be reported to the Standards in Public Office Commission (SIPO) by the individual or entity undertaking an activity that they consider to be lobbying. The responsibility for reporting is solely with the lobbyist.
The lobbying register is maintained by SIPO and is available at www.lobbying.ie. The register is searchable under a variety of headings including by the name of the lobbyist, the DPO who was lobbied, and by the public policy area in which the lobbying relates to, for example by taxation, banking and financial institutions, and budgetary matters.
I can advise the Deputy that based on the information contained lobbying register there were 515 instances of lobbying reported with my predecessor Deputy Noonan in his role as Minister for Finance from 1 September 2015, which is the first date of lobbying returns, until June 2017. I can also advise the Deputy that there are 641 instances of lobbying listed under my role as Minster for Finance from June 2017 up until the latest reporting period of 30 April 2019.
The Deputy may wish to note that my official monthly diary, which includes listings of scheduled meetings, is published on the Government of Ireland website at https://www.gov.ie/en/collection/1cc374-minister-paschal-donohoe-tds-diary/
192. Deputy Thomas P. Broughan asked the Minister for Finance the estimated revenue which could be achieved by increasing the number of inspectors and auditors employed by the Revenue Commissioners by an additional 100 and 200 persons, respectively; and if he will make a statement on the matter. [32922/19]
View answerIn each Budget since Budget 2016, I have introduced a series of “compliance measures” among the taxation policy changes. These are specific Revenue programmes or initiatives aimed at raising tax revenue through enhanced taxpayer compliance. In each year I have also assigned additional resources to Revenue to help them to deliver on these measures.
One of these measures included in Budget 2017 was to increase Revenue staff resources by 50 (full time equivalent) on audit and investigation activities. Detailed Revenue analysis of the implementation of this measure, published in October 2018 at https://www.revenue.ie/en/corporate/documents/research/budget-2017-compliance-measures.pdf, estimates that the additional receipts achieved from 50 additional trained staff working on audit or other risk management interventions are €23.5 million.
On this basis of this, and consistent with earlier analysis including the Comprehensive Review of Expenditure in 2014, I am advised by Revenue that an additional 100 and 200 audit staff would increase receipts by approximately €50 million and €100 million respectively in a full year.
193. Deputy Thomas P. Broughan asked the Minister for Finance the estimated yield from the introduction of a plastics levy; if this is being examined; and if he will make a statement on the matter. [32923/19]
View answerIt is unclear what the Deputy has in mind when he references the introduction of a plastic levy.
However, the Deputy may be aware that in January 2018 the EU Commission published the European Strategy for Plastics in a Circular Economy. The strategy focuses on plastics production and use, and sets a goal of ensuring all plastic packaging is recyclable by 2030. The first action as part of this strategy is a proposal for dealing with the ten single-use plastic products and fishing gear that together account for 70% of the marine litter in Europe. The proposal includes:
- A ban on certain plastic products
- Obligation on Member States to reduce the use of certain plastics (which may include financial measures) and
- Obligations for producers to cover costs of waste management and clean up.
The Strategy also recommends introducing fiscal measures to encourage environmentally friendly behaviour and the Commission considers that this specific proposal within the EU budget would contribute to meeting the objectives of the Plastics Strategy. Discussions for a plastic based tax post the 2020 Multi Financial Framework have been ongoing within the Own Resources working group since the EU Commission proposal was launched.
It may be prudent to await these EU developments before embarking on an examination of a national tax measure. Any proposal to introduce new national tax measures on plastics would also have to consider the impact on existing supply chains, legislation required in relation to the scope of the tax, Revenue powers, offences, reliefs, etc., IT costs, tax efficiency and state aid implications. In this regard, the development and introduction of the sugar tax gave rise to considerable staff resources over a period of two years. To undertake such measures, consideration would also have to be given to the opportunity cost of staff resources/time involved.
My Department will continue to assess the evolving EU and international debate in this area and consider, as appropriate, the merits of the introduction of a tax on plastic from an environmental, revenue and administration perspective.
194. Deputy Thomas P. Broughan asked the Minister for Finance the projections on additional tax yield if excise duties on petrol and diesel were equalised in budget 2020, by budget 2021, 2022 and 2023 in 2020 or in stages from 2020 to 2023; and if he will make a statement on the matter. [32924/19]
View answerThe Tax Strategy Group (TSG) paper on Climate Action and Tax sets out a 5 year pathway to achieving equalisation between Excise rates for petrol and diesel, as well as the additional yield from straightforward increases in Excise rates on diesel and petrol. The estimated yield by year is shown in Section 1.5.3 of the paper at https://assets.gov.ie/19116/c447474fea5e422080a6384b7a84fbed.pdf.
195. Deputy Thomas P. Broughan asked the Minister for Finance the estimated yield from the introduction of an aviation fuel tax of 1%, 3% and 5% respectively; the measures he is taking in this regard; and if he will make a statement on the matter. [32925/19]
View answer204. Deputy Thomas P. Broughan asked the Minister for Finance the estimated yield by increasing the tax on kerosene by 2%, 5% and 7%, respectively; the tax currently on kerosene used as a propellant; and if he will make a statement on the matter. [33141/19]
View answerI propose to take Questions Nos. 195 and 204 together.
I understand that the Deputy is in fact referring to excise on fuel used for commercial flights when he refers to aviation fuel tax.
Ireland’s excise duty treatment of fuel used for air navigation is based on European law as set out in Directive 2003/96/EC on the taxation of energy products and electricity, commonly known as the Energy Tax Directive. Under this Directive, Member States are obliged to exempt certain fuels used for commercial aviation purposes from excise duty. The scope of this exemption must include jet fuel (which is the most commonly used heavy oil in air navigation) and must encompass such fuel used for intra-Community and international air transport purposes. A Member State may waive this exemption where it has entered into a bilateral agreement with another Member State to tax fuel for intra-community flights. With regard to fuel for international transport, the scope for a Member State to take a unilateral approach to taxation is limited by international law and a range of bilateral and multilateral agreements that operate under 1944 Convention on International Civil Aviation (known as the Chicago Convention).
196. Deputy Thomas P. Broughan asked the Minister for Finance the estimated yield from the introduction of a climate action responsibility levy added to corporation tax of 1%, 3% and 5%, respectively; and if he will make a statement on the matter. [32926/19]
View answerThe trading profits of companies in Ireland are generally taxed at the standard Corporation Tax rate of 12.5 per cent.
Some countries have a high headline rate of Corporation Tax, which is supplemented by a high number of tax reliefs which reduce the overall rate of tax paid. By contrast, the approach in Ireland is transparent: we have a competitive headline rate of Corporation Tax which is applied to a broad base.
Certainty with regard to the 12.5 per cent rate of Corporation Tax has been a key element of Ireland’s tax policy over the last two decades. Changing this rate or introducing a new levy on the profits of corporations would involve increased complexity and could significantly change the attractiveness of Ireland’s Corporation Tax offering.
It is therefore not possible to accurately predict the effect such a levy would have on the behaviour and decisions of large multinational companies. This uncertainty prevents a reliable estimate being made of any yield that might accrue to the Exchequer if such a levy were imposed on corporate profits.
197. Deputy Anne Rabbitte asked the Minister for Finance the number of feasibility studies conducted by his Department in County Galway in each of the years 2016 to 2018 and to date in 2019, in tabular form; the names of each project being studied; the amount allocated and drawn down for each study; the person or body that sought each study; and if he will make a statement on the matter. [32942/19]
View answerI wish to inform the Deputy that my Department has not conducted feasibility studies in County Galway in years 2016 to 2018 and to date in 2019.
198. Deputy Brendan Griffin asked the Minister for Finance his views on the proposal to increase the industry funding levy for credit unions; and if he will make a statement on the matter. [32974/19]
View answerAs the Deputy is aware, credit unions are regulated and supervised by the Registrar of Credit Unions at the Central Bank who is the independent regulator for credit unions. Within his independent regulatory discretion, the Registrar acts to support the prudential soundness of individual credit unions, to maintain sector stability, and to protect the savings of credit union members.
Since 2004 the amount of the Industry Funding Levy payable by each credit union has been capped at a rate of 0.01% of total assets.
Consultation Paper 95 ‘Joint Public Consultation Paper - Department of Finance and the Central Bank of Ireland - Funding the Cost of Financial Regulation’ (CP95) was published in 2015 and set out proposals to move from partial industry funding of financial regulation towards full industry funding, noting the proposal set out in an earlier consultation conducted by the Central Bank (CP61 ‘Consultation on Impact Based Levies and Other Levy Related Matters’) to move credit unions to fund 50% of the cost of regulating the credit union sector.
The Central Bank indicated, in its Funding Strategy and 2018 Guide to the Industry Funding Levy, that it intended to seek my approval to increase the proportion of financial regulation costs to be recovered from credit unions on a phased basis setting out an initial target of 50% to be reached by 2021.
In response to the Central Bank's request I recommended that credit union contributions should not increase beyond the 50% target until:
1. The levy trajectory has reached the planned 50% rate, at which time the impact on the viability of the sector will be better understood; and
2. A public consultation regarding increasing the levy rate for credit unions beyond 50% is undertaken, which would include a regulatory impact assessment of such a change on the sector.
In contrast to this, recovery rates in 2018 for all other industry categories ranged from 65% to 100%, and the Central Bank intends to increase all to 100% funding over the next number of years.
The Deputy might also wish to note that the Department of Finance, in collaboration with the Central Bank, has prepared a public consultation paper on potential changes to the Credit Institutions Resolution Fund Levy, which is expected to reduce materially from 2020. This consultation, which has been published on the Department of Finance website, is open to all persons and I would strongly encourage all stakeholders to submit feedback.
It is also important to note that as Minister for Finance I have reduced the Stabilisation Scheme Levy materially and that since 2017 no further levies have been charged by the Credit Union Restructuring Board (ReBo).
199. Deputy Pearse Doherty asked the Minister for Finance the value of sovereign debt of other countries the State holds; the rate at which these bonds were purchased; and if he will make a statement on the matter. [32977/19]
View answerThe National Treasury Management Agency (NTMA) has advised me that the Exchequer does not currently hold the sovereign debt of any other country, however, as of 30 June 2019, the Ireland Strategic Investment Fund (ISIF) holds €44m of direct investments in foreign sovereign debt. These assets were purchased at a weighted average yield of +0.9%.
Additionally, in May 2010, certain Euro Area Member States entered into a Loan Facility Agreement to provide financial assistance to Greece in order to support the financial stability of the Euro Area as a whole. As part of the first Greek EU-IMF programme, participating Member States authorised a Euro Area Loan Facility totalling approximately €77.3 billion. Ireland stepped out of the Greek Loan Facility (GLS) when we entered our own EU-IMF Programme in late 2010 having contributed circa €347 million, which is repayable in scheduled stages and amounts between 15 June 2020 and by 15 June 2040. Ireland is therefore in receipt of quarterly interest based on the 3 Month EURIBOR rate, plus a margin of 0.5% in relation to the GLS. The cumulative interest received by 30 June 2019 was circa €36.5 million.
201. Deputy Michael McGrath asked the Minister for Finance if mortgage applications involving a person who is paid in cash but with supporting payslips and so on is treated differently to a person who is paid by cheque or electronic transfer; and if he will make a statement on the matter. [33068/19]
View answerThe consumer protection regulatory framework requires that lenders must, before concluding a mortgage credit agreement, assess the consumer's creditworthiness and this is to be carried out on the basis of the consumer's income, expenses and other financial and economic circumstances which is necessary, sufficient and proportionate. The information provided for this assessment must also be appropriately verified, including through reference to independently verifiable documentation where necessary.
In particular, the Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability’ requirements on lenders. Lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower. Regulated entities must gather and record sufficient information from the consumer prior to offering, recommending, arranging or providing a product or service appropriate to that consumer. The level of information gathered should be appropriate to the nature and complexity of the product or service being sought by the consumer, but must be to a level that allows the regulated entity to provide a professional service and must include details of the consumer’s needs and objectives, personal circumstances and financial situation. A regulated entity must endeavour to have the consumer certify the accuracy of the information it has provided to the regulated entity. Prior to providing a mortgage to a personal consumer, a mortgage lender (or intermediary where relevant) must have had sight of all original supporting documentation evidencing the consumer’s identity and ability to repay. However, it could be noted that the Code or any other consumer protection regulatory requirement does not specify any requirements that distinguish between applicants who are paid in cash and those who are paid by cheque/electronic transfer.
While regulated lenders must comply with the legal and consumer protection regulatory framework requirements, the extension of credit by lenders to potential customers is ultimately a commercial decision for the lender themselves and each lender will have its own individual credit lending policies and make its own lending decisions in the context of its lending policies. However, if an individual consumer is not satisfied with the way a financial service provider is providing a financial service, s/he may make a complaint to the independent Financial Services and Pensions Ombudsman.
202. Deputy Michael McGrath asked the Minister for Finance if he is satisfied that all lenders are correctly applying the new rules governing the calculation of breakage fees for mortgage customers that wish to come off a fixed rate product early; and if he will make a statement on the matter. [33071/19]
View answerThe Central Bank of Ireland is the independent regulator of all regulated financial service providers and it has advised that it has checked the methodologies applied by lenders to calculate fixed rate breakage fees on mortgages subject to the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 and that it has seen no evidence of material failings in this regard.
The Central Bank has also said that it cannot comment specifically on the compliance by individual financial service providers with their obligations under financial services legislation due to the Central Bank’s confidentiality obligations and the requirement to apply fair procedures. However, the Central Bank has indicated that it has intervened with a small number of lenders to ensure that the information provided to consumers on fixed rate breakage fees is clear and transparent.
More generally it could also be noted that if an individual consumer is not satisfied with the way a financial service provider is providing a financial service, s/he may make a complaint to the independent Financial Services and Pensions Ombudsman.
203. Deputy Thomas P. Broughan asked the Minister for Finance the estimated yield from the introduction of a 10% social responsibility levy on alcohol; and if he will make a statement on the matter. [33140/19]
View answerI am advised by Revenue that the introduction of a 10% levy on alcohol (assumed to be 10% of the Excise rate on alcohol products) would result in the estimated yield as shown in the following table.
|
Alcohol Levy |
€m |
|
Beer |
43.0 |
|
Spirits |
37.2 |
|
Wine |
37.6 |
|
Cider |
6.1 |
|
Total |
124.0 |
205. Deputy Catherine Murphy asked the Minister for Finance the number of customs officer checks and seizures that have taken place at Casement Aerodrome in the past five years to date; the value of the seizures; the nature of the items recovered; and if he will make a statement on the matter. [33163/19]
View answerI am advised by Revenue that a decision on whether to undertake a visit or conduct an intervention at an aerodrome is based on a risk assessment which takes account of a range of factors, including intelligence.
General aviation flights into or out of the Casement Aerodrome are required to be reported directly to Revenue. These reports contain all the information required for risk assessment purposes.
On the basis of flight reports and following a risk assessment, Customs Officers have conducted 2 visits to Casement Aerodrome in the previous 5 years. There were no seizures arising from these visits.
206. Deputy Michael McGrath asked the Minister for Finance if he will reduce the rate of VAT or zero rate for VAT purposes on items relating to the study equipment used to reduce emissions in view of the challenges facing the agricultural sector to reduce its carbon emissions; and if he will make a statement on the matter. [33164/19]
View answerThe VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In accordance with Irish VAT legislation, agricultural equipment is liable to VAT at the standard rate, currently 23%, and there is no discretion, under the Directive, to reduce the rate of VAT or to apply a zero rate to these goods.
I am advised by Revenue that farmers may elect to register for VAT or be treated as flat-rate farmers for VAT purposes. Farmers that are registered for VAT have an entitlement to reclaim VAT charged on costs incurred in relation to the farm business, including VAT borne on the purchase of agricultural equipment. Farmers that are not registered for VAT are compensated for the VAT incurred on goods and services used in the course of their farming business, including purchases of agricultural machinery, through the flat rate addition they receive on payments for their supplies of agricultural produce and services.
