Information and Communications Technology

Questions (109)

Alan Kelly

Question:

109. Deputy Alan Kelly asked the Tánaiste and Minister for Foreign Affairs and Trade his plans to protect his Department in the event of a malware attack or security risks as a result of the failure to upgrade computers from an operating system (details supplied) in his Department and the agencies under his remit; and if he will make a statement on the matter. [44744/19]

View answer

Written answers (Question to Foreign)

My Department deploys a comprehensive Security Incident and Event Management system along with a robust incident response plan to deal with malware incidents, regardless of operating system. The Department also works closely with the National Cyber Security Centre to identify and understand risks and to inform effective mitigation.

Passport Data

Questions (110)

Catherine Murphy

Question:

110. Deputy Catherine Murphy asked the Tánaiste and Minister for Foreign Affairs and Trade the number of Departments that have access to data and photographs contained in the Passport Service data sets; the purpose for which each Department is using data; and if he will make a statement on the matter. [44827/19]

View answer

Written answers (Question to Foreign)

The Passport Service of the Department of Foreign Affairs and Trade, holds personal information in respect of passport applicants for the purpose of processing applications for passport by such individuals. The Passport Service’s legal basis for processing personal data is provided for by Section 8(1) of the Passports Act 2008, as amended.

As a Data Controller, the Department of Foreign Affairs and Trade must comply with the provisions of relevant legislation, namely the Data Protection Act 2018, the General Data Protection Regulation (GDPR) and all applicable laws and regulations relating to the processing of personal data and privacy, including, where applicable the guidance and codes of practice issued by the Data Protection Commission.

My Department has confirmed that no other Government Department has access to data or photographs of passport records held by the Passport Service.

However, in line with Section 41 of the Data Protection Act 2018, the Passport Service shares certain information at the request of public authorities solely for the purpose of preventing, detecting, investigating or prosecuting criminal offices. The data provided cannot be used for any purpose other than that for which it was obtained.

Departmental Staff Data

Questions (111)

Mattie McGrath

Question:

111. Deputy Mattie McGrath asked the Tánaiste and Minister for Foreign Affairs and Trade the number of full and part-time staff employed in his Department; the number of such staff being paid at the minimum wage rate of pay; and if he will make a statement on the matter. [44847/19]

View answer

Written answers (Question to Foreign)

At the end of September 2019, my Department employed 1611 Civil Servants, of whom 1455 were full-time staff and 156 were part-time staff.

I can confirm that no Civil Servant in my Department is paid at or below the minimum wage rate of pay.

Human Rights

Questions (112)

Maureen O'Sullivan

Question:

112. Deputy Maureen O'Sullivan asked the Tánaiste and Minister for Foreign Affairs and Trade his views on the treatment of the Uighur population in the north-western provinces of China by the Chinese Government (details supplied); his plans to raise this at European level; and if he will make a statement on the matter. [44896/19]

View answer

Written answers (Question to Foreign)

The Government remains concerned about the credible reports of the treatment of ethnic Uighurs and other minorities in the Xinjiang region. We and our EU partners take these reports very seriously and have raised our concerns with our Chinese counterparts, in bilateral and multilateral contexts, on a consistent basis.

At the multilateral level, Ireland was among 23 countries that joined a Joint Statement on the human rights situation in Xinjiang at the UN Third Committee on 29 October 2019. This statement was delivered by the UK at the Interactive Dialogue with the Chair of the Committee on the Elimination of Racial Discrimination (CERD). Ireland was also one of 22 States to sign a letter which called for China to respect human rights and fundamental freedoms in Xinjiang, and to allow unrestricted access to independent observers. Ireland also participated in China’s Universal Periodic Review (UPR), held last November. In our intervention we expressed concern at reports of the treatment of ethnic Uighurs, in particular their detention in political re-education camps, and called on China to respect freedom of religion and belief. We also recommended that China allow the OHCHR access to all regions of the country, including Xinjiang. I also raised this issue bilaterally with the Chinese Vice Minister for Foreign Affairs, Wang Chao, during political consultations in Dublin last year.

At EU level, this issue was raised at both the EU-China Summit and EU-China Human Rights Dialogue in April this year. During the dialogue the EU noted that while actions to counter terrorism are essential, these actions must respect the principle of proportionality, fundamental freedoms, and international laws. The EU has also raised this issue at multilateral level, calling on China to allow meaningful, unrestricted, and unsupervised access to Xinjiang for independent observers, including the UN High Commissioner for Human Rights.

The protection and promotion of universal human rights is one of Ireland’s core foreign policy issues, and Ireland and the EU will continue to raise these issues during both political and official contacts with the Chinese authorities.

Departmental Contracts Data

Questions (113)

Mattie McGrath

Question:

113. Deputy Mattie McGrath asked the Tánaiste and Minister for Foreign Affairs and Trade the details of contracts of €25,000 or more that have been awarded by his Department or bodies under his aegis that were found to be non-compliant with procurement guidelines in 2017, 2018 and to date in 2019; and if he will make a statement on the matter. [45065/19]

View answer

Written answers (Question to Foreign)

The Department of Foreign Affairs and Trade (DFAT) currently operates in a number of locations in Ireland and in over 80 locations overseas.

The policy of the Department is to operate competitive tendering as standard procedure. In order to achieve best value for money, a Central Procurement Section operates to co-ordinate all contracting activity and to promote best practice in procurement through management and monitoring of corporate contracts.

Procurement takes place in the context of Directive 2014/24/EU and supported by Procurement Guidelines published by the Office of Government Procurement (OGP). The Department participates fully in on-going initiatives of the Office of Government Procurement (OGP) focusing especially at achieving procurement savings, including the use of shared framework agreements for the provision of different categories of supplies and services.

On occasion, a small number of Department contracts do not undergo a competitive process due to exceptional market or other circumstances. Below are details of non-compliant contracts for 2017 and 2018 only as returns for 2019 are not yet available at this time. However, 2019 tenders are being monitored and managed by the Department on an ongoing basis throughout the year.

To comply with DPER Circular 40/02 the Department prepares an annual statement of contracts awarded without a competitive process where the value of the contract exceeded €25,000 (excluding VAT). This is submitted to the Office of the Comptroller and Auditor General, and to the Department of Public Expenditure and Reform on an annual basis by 31 March of the following year as part of the appropriation accounts.

In some cases non-compliant contracts arise where the original tender contract period has expired and a new tender process has not yet been completed for whatever reason. The Department actively monitors and seeks to minimise such cases.

Non-Compliant Contracts/Purchases of more than €25,000 (excl. of VAT) undertaken without a competitive process Year ending 2017

Subject of Contract/Purchase

Contract Value

Provision of healthcare insurance for Departmental staff overseas (extension of previous contract pending new tender)

€1,489,869

Provision of mobile services (extension of previous contract pending new tender)

€184,460

Provision of support and maintenance services for web-based collaborative platform (extension of previous contract pending new tender)

€135,165

Provision of leadership development management programme (LDMP) for AP & equivalent grades

€38,224

Provision of services for the supply of passport application forms (extension of previous contract pending new tender)

€500,000

Provision of services to facilitate office relocations including fit-out and removals

€87,880

Professional fees relating to the British-Irish Intergovernmental Secretariat Office fit-out in Belfast

€67,790

Development of strategy for regional development plan in Mozambique

€41,634

Provision of security services for Mexico City Mission

€26,499

Provision of security services for New Delhi Mission (extension of previous contract pending new tender)

€56,000

Provision of legal services for the Consulate General New York Mission

€67,233

Provision of catering services for official promotional activities at the Consulate General New York Mission

€59,761

Provision of security services for Pretoria Mission (extension of previous contract pending new tender)

€25,690

Provision of cleaning services for the Permanent Representation to the European Union in Brussels Mission (extension of previous contract pending new tender)

€77,000

Provision of security services for the Permanent Representation to the European Union in Brussels Mission (extension of previous contract pending new tender)

€178,000

Provision of grounds maintenance services for the Canberra Mission (extension of previous contract pending new tender)

€40,000

Non-Compliant Contracts/Purchases of more than €25,000 (excl. of VAT) undertaken without a competitive process Year ending 2018

Subject of Contract/Purchase

Contract Value

Provision of healthcare insurance for Departmental staff overseas (extension of previous contract pending new tender)

€1,527,116

Provision of mobile services (extension of previous contract pending new tender)

€173,363

Provision of services to facilitate office relocations including fit-out and removals

€104,827

Provision of security services for the Brasilia Mission (extension of previous contract pending new tender)

€107,000

Provision of security services for the Permanent Representation to the European Union in Brussels Mission (extension of previous contract pending new tender)

€211,588

Provision of cleaning services for the bilateral Belgium Mission (extension of previous contract pending new tender)

€59,368

Provision of security services for the Jakarta Mission (extension of previous contract pending new tender)

€43,097

Provision of security services for the Mexico City Mission

€27,704

Provision of catering services for official promotional activities at the at the Consulate General New York Mission

€64,093

Provision of cleaning services for The Hague Mission (extension of previous contract pending new tender)

€25,143

Human Rights

Questions (114)

Seán Crowe

Question:

114. Deputy Seán Crowe asked the Tánaiste and Minister for Foreign Affairs and Trade if his attention has been drawn to recent large public protests in Chile and that there is opposition to the current Government and its alleged dire handling of the economy, which has led to rampant inequality; his views on the fact the Chilean Government declared a state of emergency and deployed the army; if his attention has been further drawn to the scenes of police and army brutality, which has led to more than 1,000 Chileans being injured and more than 100 partially blinded after being shot in the eye; and his views on these alleged human rights violations against protesters. [45163/19]

View answer

Written answers (Question to Foreign)

I am aware of the recent civil unrest in Chile. My Department has been receiving updates on the developing situation from our new Embassy in Santiago.

As the Deputy will be aware, protests about price increases for the metro service in Santiago became increasingly violent over the weekend beginning Friday, 18 October, leading the Government to declare a state of emergency. This was followed by the deployment of the army on the streets to deal with the unrest, and overnight curfews in the capital of Santiago and cities across Chile. The demonstrations have since evolved into larger protests centring on socio-economic inequality in Chile. While most of the protests have been peaceful, there are violent elements among the protesters who have engaged in acts of destruction and violence, including looting and arson.

I am saddened by the reports of violence, destruction, injuries and loss of life that have occurred during the demonstrations. I am aware of the allegations of human rights violations by the authorities against some protesters and I welcome the decision by the UN High Commission for Human Rights to send a verification mission to examine these reports and allegations, and the support of the Government of Chile for this visit.

President Piñera lifted the State of Emergency from Sunday, 27 October; however, protests and accompanying violence have continued. As a result, President Piñera has announced that Chile will no longer host the Asia-Pacific Economic Cooperation meeting in November or the COP25 UN Climate Change Conference in December.

We will continue to monitor developments closely, together with other EU Missions and partners in Chile. Ireland enjoys excellent bilateral relations with Chile. We look forward to developing that relationship further in the months and years ahead.

Human Rights

Questions (115)

Seán Crowe

Question:

115. Deputy Seán Crowe asked the Tánaiste and Minister for Foreign Affairs and Trade if Ireland will take a leadership role against the human rights violations in Bahrain in the United Nations Human Rights Council, particularly in view of the numerous statements by him that Bahrain is one of Ireland’s priorities and his own statements that he is following the issue closely and is very concerned; and if he will work to ensure a joint statement on the human rights situation in Bahrain is tabled at the next meeting of the council in March 2020. [45164/19]

View answer

Written answers (Question to Foreign)

The human rights situation in Bahrain remains a matter of concern. Although Bahrain has repeatedly stated its commitment to improving its human rights record and safeguarding human rights as enshrined in the Bahraini Constitution, there are ongoing instances of violations of fundamental freedoms there, including violations of freedom of opinion and expression, as well as the targeting of human rights defenders. I was alarmed to learn of the executions of three people in July, including two human rights activists. I am also aware of reports of inhumane detention conditions as well as allegations that political prisoners in Bahrain have been tortured. Ireland attaches a high priority to safeguarding human rights defenders, and continually advocates for freedom for civil society actors to operate in a safe and enabling environment, without repression.

Respect for human rights is an integral part of Ireland’s foreign policy and we consistently seek to raise our concerns on human rights issues through the most appropriate and effective channels. Our active participation at the UN Human Rights Council is particularly important in that regard. Ireland regularly raises the case of human rights in Bahrain at that forum, in the form of national statements and its support to EU Statements. For example, in September 2018, Ireland expressed concerns about the ongoing restrictions on civil society space and the treatment of human rights defenders, and called on Bahrain to respect freedom of opinion and expression. In February 2019, Ireland reiterated concern at the ongoing detention of human rights defenders. In our Item 4 statement at the Human Rights Council in July 2019, Ireland called on Bahrain to ensure respect for freedom of opinion and expression, and the right to a fair trial. Ireland also took the opportunity at the most recent Council in September 2019 to reiterate its opposition to the use of the death penalty in all circumstances.

Since 2012, Ireland has signed five Human Rights Council joint statements on the human rights situation in Bahrain, which expressed concern on a number of fronts including the mistreatment of detainees, repression of demonstrations, and the arbitrary deprivation of nationality without due process. When planning for the March 2020 Human Rights Council session, we will consider carefully which priorities to set, with a view to focusing the weight of Ireland's efforts, and the Council's attention, on the most grave and troubling situations globally.

Our principled stance on human rights also feeds into our bilateral dialogue and we raise our human rights concerns directly with the Bahraini authorities at every opportunity. When I met the Bahraini Foreign Minister at the UN General Assembly in New York in September, I made a point of raising the human rights situation directly with him, expressing the hope that we can have an open and honest discussion on these issues. In addition, officials from my Department meet regularly with advocacy groups and Bahraini human rights defenders to discuss the situation in Bahrain.

Ireland will continue to monitor developments in Bahrain, and to call on the Bahraini Government to deliver on its stated commitment to make progress in relation to human rights. We shall do so both directly with Bahraini officials, as well as at EU and international level, including at the Human Rights Council, whenever opportunities arise.

VAT Rebates

Questions (116)

Anne Rabbitte

Question:

116. Deputy Anne Rabbitte asked the Minister for Finance the reason for the introduction of a €175 retail export scheme threshold in view of the warning from Fáilte Ireland that at least 10,000 tourism sector jobs are at risk in a no-deal Brexit scenario; and if he will make a statement on the matter. [44670/19]

View answer

Written answers (Question to Finance)

The Retail Export Scheme allows persons who are resident outside the EU and who make purchases of goods in the EU to avail of a refund of the VAT charged on these goods where the goods are exported from the EU by the tourist or traveller within three months of purchase. The UK will become a 3rd country and UK residents will become eligible for the scheme post Brexit.

The provision concerning the restrictions and conditions that may be applied to the Retail Export Scheme in the event of a no-deal Brexit was included in the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2019, which became law on March 17 of this year.

The Government's intention is to provide reciprocal protection to the UK if they decide to restrict the introduction of their VAT Retail Scheme, in the event of a no-deal Brexit. However should the UK apply an unrestricted Retail Export Scheme, Ireland will not commence the precautionary sections, and an unrestricted VAT Retail Export Scheme will operate between jurisdictions.

The proposed measures, while precautionary, were influenced by i) the potential for significant Exchequer impacts as a result of the expansion of the scheme to the UK, ii) the potential impacts on Government health and welfare policies and iii) the potential risk of fraud in the application of the VAT Retail scheme.

Disabled Drivers and Passengers Scheme

Questions (117)

John Brassil

Question:

117. Deputy John Brassil asked the Minister for Finance if the case of a person (details supplied) will be reviewed; and if he will make a statement on the matter. [44677/19]

View answer

Written answers (Question to Finance)

I am informed by Revenue that Drivers and Passengers with Disabilities Scheme Regulations (S.I. No. 353 of 1994) provide that where a person receives a repayment or remission of VRT/VAT in respect of a vehicle purchased to transport ‘a person with disabilities’, that person shall undertake to use the vehicle for a period of at least two years from the date of purchase. Paragraph 15 of the Regulations provides that where a vehicle is sold, or otherwise disposed of, or ceases to be used to transport ‘the person with disabilities’within two years, a portion of the refund/remission is to be repaid to Revenue.

The Regulations also provide a formula, based on the open market selling price (OMSP) of the vehicle at the time of disposal, which can be used by Revenue to calculate the amount that should be repaid where the vehicle ceases to be used to transport ‘the person with disabilities’ within the two-year period. The formula takes account of any depreciation to the vehicle on foot of an accident or damage once supporting insurance or salvage documentation is made available. In situations where the OMSP and relevant supporting documentation is not provided, Revenue seeks repayment at rates of 100% if the vehicle is removed from the Scheme within the first 6 months, 90% if removed between 6 and 12 months and 80% if removed between 13 and 24 months.

I am advised by Revenue that the person in question made an online application to bring a new vehicle onto the Drivers and Passengers with Disabilities Scheme in July 2019. The previous vehicle was approved on the Scheme on 15 November 2017. When making the new application the person requested an early disposal (repayment) figure in relation to the previous vehicle but did not provide any information regarding its OMSP or as to why it was being disposed of inside the two-year period. This left Revenue with no alternative but to apply the 80% rate (removed from the Scheme between 13 and 24 months) rather than apply the formula-based method of calculation.

Revenue has also advised me that it previously explained to the person why it was obliged to apply the 80% repayment rate in the absence of receiving any supporting documentation confirming the revised OMSP following the damage to the vehicle (e.g. insurance or salvage valuation confirmation) but has still not received any information from the person. I am aware that Revenue also made direct contact with the Deputy’s office to clarify the requirements.

To advance matters the person should provide the required information to Revenue’s Central Repayments Office, M: TEK II Building, Armagh Road, Monaghan, Co. Monaghan H18 YH59 as soon as possible. Revenue has assured me that it will review the position as soon as the documentation is received.

Tax Incentives

Questions (118)

Michael Healy-Rae

Question:

118. Deputy Michael Healy-Rae asked the Minister for Finance his views regarding the provision of tax incentives for persons who provide accommodation for the rental market. [45372/19]

View answer

Written answers (Question to Finance)

I assume from the details accompanying his question that the deputy is primarily referring to natural persons acting as landlords and income tax based measures.

The Report of the Working Group on the Tax and Fiscal Treatment of Landlords examined the general issue raised in the Deputy's question. It was submitted to me for consideration in September 2017, in advance of its publication on Budget Day, 10 October 2017. The report put forward options for further consideration, rather than recommendations, and any further consideration would require the participation of several Departments and organisations, including my own Department. The ten options are split into short, medium and long-term options. Five potential short-term options were identified as measures which could potentially be implemented within 18 months, i.e. within Budgets 2018 and 2019.

One short-term option was to increase the mortgage interest deduction available to landlords. In this context, it should be noted that in Budget 2017, a phased unwinding of the restriction on interest deductibility over five years for all residential landlords was initiated. The second step, an increase from 80% to 85% deductibility, took effect from 1 January 2018. Budget 2019 accelerated progress in this area and, from 1 January 2019, the restoration of full mortgage interest deductibility for landlords of residential property has been in place.

A further option was to consider introducing Local Property Tax (LPT) deductibility for landlords. Earlier this year, the report of the interdepartmental review of LPT noted that LPT is a relatively small expense and therefore is unlikely to make a significant difference to the position of any individual landlord in cash terms and so may not be regarded by landlords as a sufficient measure to encourage them to stay in or enter the rental market. The report also found that the measure would also have a deadweight cost in respect of landlords who do not intend to leave the rental market and would create a more favourable position for landlords of property compared to owner-occupiers, as owner-occupiers cannot claim a tax deduction for LPT.

In Budget 2018 I introduced another of the short-term options, deductibility for pre-letting expenditure for previously vacant properties. This measure applies to residential premises which have been vacant for at least 12 months and which are then let after the date of the passing of the Finance Act 2017, i.e. after 25 December 2017. The expenditure is allowed as a deduction against rental income from that premises. It applies to expenses that would be allowable if they had been incurred while the property was let, such as the cost of repairs, insurance, maintenance and management of the property. Certain limitations are in place regarding this measure, for example the expenditure must have been incurred in the 12 months before the premises is let as a residential premises. The total deduction allowed is capped at €5,000 per vacant premises and the deduction will be clawed-back if the property ceases to be let as a residential premises within four years of the first letting. I prioritised this option as it was specifically designed to encourage an overall increase in housing supply by bringing currently vacant property back into residential use.

The final short-term option was to improve the collection and sharing of data on the rental accommodation sector. A significant issue that hampered the progress of the Working Group was a lack of robust data on various elements of the housing market, due to the differing metrics used by the various agencies. The Housing Analytics Group, chaired by the Department of Housing, Planning and Local Government, is currently active and a number of Departments and agencies are involved in its work, including the Residential Tenancies Board, the Central Statistics Office (CSO), Revenue and the Department of Finance.

Five of the options put forward in the report were medium-term and long-term options. Medium-term options are measures which work with the current tax system but might take longer to develop and implement, and as such would require a longer lead-in period. The long-term options look at the potential for more fundamental changes to the tax system, and so would require significantly greater resource commitments to progress. Consideration of these options will continue within the relevant time frames.

As the Deputy will be aware, taxation is only one of the policy levers available to the Government through which to boost rental and overall housing supply and that, in line with the Tax Expenditure Guidelines, consideration of whether a tax measure is the most appropriate policy tool for a given purpose would be required. Ireland’s past experience with tax incentives in the housing sector strongly suggests the need for a cautionary stance when considering intervention in the rental sector. There are many competing priorities which must be considered when deciding which policy measures to introduce and the rental sector is just one of many other sectors that may require assistance and intervention.

Brexit Preparations

Questions (119, 120, 121, 129)

Micheál Martin

Question:

119. Deputy Micheál Martin asked the Minister for Finance his plans for an economic impact assessment of the current withdrawal treaty on trade and other economic metrics under the auspices of his Department and agencies under his remit; and if he will make a statement on the matter. [44275/19]

View answer

Micheál Martin

Question:

120. Deputy Micheál Martin asked the Minister for Finance if he has met the ESRI recently to discuss the economic impact of the current withdrawal treaty on Ireland; and if he will make a statement on the matter. [44306/19]

View answer

Micheál Martin

Question:

121. Deputy Micheál Martin asked the Minister for Finance if he is assessing independently or otherwise the economic losses that Ireland is exposed to under the current withdrawal treaty if it is accepted in particular its impact on east-west trade; and if he will make a statement on the matter. [44307/19]

View answer

Lisa Chambers

Question:

129. Deputy Lisa Chambers asked the Minister for Finance his plans to provide an updated economic impact assessment of Brexit on Ireland based on the most recent withdrawal agreement reached between the EU and the UK; and if he will make a statement on the matter. [44540/19]

View answer

Written answers (Question to Finance)

I propose to take Questions Nos. 119 to 121, inclusive, and 129 together.

Budget 2020, including the macroeconomic outlook which underpins it, was based on the prudent assumption that the UK would leave the EU on 31 October without an agreement. The macroeconomic outlook is set out in the Economic and Fiscal Outlook published with Budget 2020. This included, at Box 4, an assessment of the macroeconomic outlook that would apply in the event of an agreed exit by the UK at end October.

The Withdrawal Agreement endorsed by the European Council, will now require ratification by the European Parliament and the UK Parliament. Pending ratification of the deal, it is not possible to say if the outlook will be different to that set out in Budget 2020.

If the Withdrawal Agreement is ratified, the UK will enter a transition period until at least the end of 2020. In this situation the outlook would be broadly similar to that set out in Table 4 (Box 4) in the Economic and Fiscal Outlook 2020. This shows that, in the event of an agreed exit, GDP growth is forecast to be 3.1 per cent in 2020, with employment growth projected at 1.7 per cent next year and the unemployment rate expected to be 5.1 per cent.

The revised Political Declaration envisages an ambitious trading relationship for goods on the basis of a Free Trade Agreement, but until there is greater clarity on the post-transition relationship there is likely to be continued uncertainty, particularly with respect to private sector investment. My Department has been in contact with the ESRI on the economic impact of the revised Withdrawal Agreement and Political Declaration on the future relationship. I am satisfied that the existing analysis in the joint research by the Department of Finance and ESRI, published in March this year, broadly captures the range of possible future relationships. The analysis included a free trade agreement (of which there could be many forms), and a trading relationship under World Trade Organisation (WTO) frameworks. The impacts of these were modelled and estimated in the joint research with was published in March this year.

Under these scenarios, over the medium-term (i.e. 5 years) the level of GDP would be of the order of between 1.9 and 3.3 per cent lower, respectively, compared to a situation where the UK remains in the EU. The negative impacts will be most severely felt in those sectors with strong export ties to the UK market – such as the agri-food, manufacturing and tourism sectors and also SMEs generally – along with their suppliers. The impact will be particularly noticeable outside the main cities.

In 2017, my Department published a paper on trade exposures which shows that, relative to other EU Member States, Irish exports are substantially more exposed to the UK in a number of goods sectors. The top five most exposed included the Irish agri-food sub-sectors Cereals, Vegetables and Fruit, and Live Animal products. In services, Ireland is in the upper range of the most exposed EU Member States, particularly in Financial Services.

My Department will continue to monitor developments with respect to the ratification of the Withdrawal Agreement, and the future relationship with the UK, and will update the macroeconomic and fiscal projections to take account of any developments in the Spring of next year at the latest.

Strategic Banking Corporation of Ireland Data

Questions (122)

Catherine Murphy

Question:

122. Deputy Catherine Murphy asked the Minister for Finance if he will provide the Strategic Banking Corporation of Ireland external review report 2019; the cost of same; the firm that produced the report; and if he will make a statement on the matter. [44330/19]

View answer

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 to address gaps and potential failures in the Irish SME finance market as well as encouraging competition and innovation, and facilitating 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.

Following a public procurement process, the SBCI appointed Ernst and Young (EY) on the 9 May 2019 to perform an external strategic review of the SBCI. EY’s task is to complete a strategic review of the SBCI as a policy delivery mechanism and national promotional institution within the context of the state’s suite of supports for SMEs. The cost of the review is €120,000.

The outcome of the review will inform the SBCI board as it sets the future strategic direction of the SBCI.

Work on this review is still ongoing. Once this review has been completed, it will be provided to the Board of the SBCI.

Haulage Industry

Questions (123)

Bobby Aylward

Question:

123. Deputy Bobby Aylward asked the Minister for Finance further to Parliamentary Question No. 220 of 16 October 2019, the position regarding the rebate available to hauliers following the recent rise in carbon tax affecting cost of fuel and operating costs; and if he will make a statement on the matter. [44370/19]

View answer

Written answers (Question to Finance)

The Diesel Rebate Scheme (DRS) was introduced in 2013 offering a partial refund to qualifying road operators on the excise paid on diesel when the retail price reaches €1.00 (Vat exclusive) or above. There is a maximum rebate of 7.5 cents per litre when the retail price is €1.25 (Vat exclusive) or above.

In recognition of the challenges facing the road haulage sector due to the uncertainty surrounding Brexit, I announced in my Budget 2020 speech that the DRS is being enhanced. The detail of this is set out in Finance Bill 2019. In brief, the price floor of €1.00 (Vat exclusive) will remain the same; the marginal rebate rate will double at a price point of €1.07 or above; the maximum rebate amount will remain at 7.5 cents per litre; and the amended DRS will apply to fuel purchased by qualifying operators from 1st January 2020.

This represents a significant enhancement of the terms of the DRS. By way of example, the current average price of a litre of diesel is €1.093 (Vat exclusive), which if used as the average price under the current DRS would entitle qualifying operators to a rebate of 2.8c per litre. Under the enhanced DRS, qualifying operators would be entitled to a rebate of 4.4c if an average per litre price of €1.109 (Vat exclusive) were to be used as the basis for calculating the rebate. In other words, in the example outlined above, an additional 1.6c to the average price of a litre of diesel would be matched by the additional rebate amount. More generally, at a price point of €1.16 (Vat exclusive), the rebate amount under the enhanced DRS is 7.5c per litre which is 2.7c per litre more than the rebate amount that would be paid under the current DRS.

I appreciate that this scheme is a fossil fuel subsidy which the ESRI has found is directly increasing CO2 emissions (as well as non CO2 emissions). However, I consider, on balance, that the specific Brexit challenges faced by hauliers justifies this enhancement. This is intended as a temporary support measure, to be reviewed as part of the annual budgetary process.

Fiscal Policy

Questions (124)

John Lahart

Question:

124. Deputy John Lahart asked the Minister for Finance when the transfer of funds to the rainy day fund will commence; and when the intended €500 million will be transferred into same in the event of an orderly Brexit. [44415/19]

View answer

Written answers (Question to Finance)

I commenced the National Surplus (Exceptional Contingencies) Reserve Fund (the Rainy Day Fund) on Thursday 31 October 2019. On foot of commencement and the necessary Delegation Order to the NTMA regarding the management of the Fund, I am directing the NTMA to transfer €1.5 billion from the Ireland Strategic Investment Fund (ISIF) by 30 November 2019.

In preparing Budget 2020, I set out that a disorderly Brexit was the baseline scenario for budget planning purposes, and therefore a budget deficit is in prospect. On that basis, I decided that there would be no transfer of €500 million from the Exchequer in 2019 to the Rainy Day Fund. In terms of any change in this approach, I await developments in the Brexit process.

As I have previously set out, the funds transferred to the Rainy Day Fund can be deployed in the event that the economic impact of a disorderly Brexit is larger than assumed. The €500 million of Exchequer funding not being transferred to the Rainy Day Fund this year will remain as Exchequer cash balances and therefore will be used to meet the Exchequer funding requirement, such as for public spending priorities.

Revenue Commissioners Audits

Questions (125)

Anne Rabbitte

Question:

125. Deputy Anne Rabbitte asked the Minister for Finance if the Revenue Commissioners are issuing a statement of case to the Tax Appeals Commission in respect of the case of a person (details supplied); if so, when it will be shared with the Tax Appeals Commission in view of the fact the expected dates have been passed; the reason for the month-long delay; and if he will make a statement on the matter. [44451/19]

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Written answers (Question to Finance)

I am advised by Revenue that the Statement of Case to which the Deputy is referring issued to the Tax Appeals Commission on 30 October 2019. Revenue have also confirmed to me that a copy issued to the person in question on the same date.

Revenue advise that the initial delay in preparing the Statement of Case arose due to the higher than usual volumes of correspondence received by the relevant Unit in recent weeks.

VAT Rate Application

Questions (126, 127, 132, 140, 147)

Brendan Howlin

Question:

126. Deputy Brendan Howlin asked the Minister for Finance the expected yield from increasing VAT on food supplements from 0% to 13.5%; the reason this policy change was not announced or included on the documentation published on budget day; and if he will make a statement on the matter. [44509/19]

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Brendan Howlin

Question:

127. Deputy Brendan Howlin asked the Minister for Finance if his decision to apply VAT to food supplements will be irreversible; and if he will make a statement on the matter. [44510/19]

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Denis Naughten

Question:

132. Deputy Denis Naughten asked the Minister for Finance his plans to review the rate of VAT applied to food supplements; and if he will make a statement on the matter. [44635/19]

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Peter Burke

Question:

140. Deputy Peter Burke asked the Minister for Finance his views on the 13.5% VAT rate for health food supplements (details supplied); and if he will make a statement on the matter. [44822/19]

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Gino Kenny

Question:

147. Deputy Gino Kenny asked the Minister for Finance if the VAT situation relating to vitamin and mineral food supplements from 1 November 2019 will be clarified; the rationale for proposed changes; and if he will make a statement on the matter. [45279/19]

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Written answers (Question to Finance)

I propose to take Questions Nos. 126, 127, 132, 140 and 147 together.

As the Deputies are aware, Irish VAT legislation does not provide a zero rate for food supplement products; instead they are subject to the standard rate of VAT (23%). Shortly after the introduction of VAT, Revenue allowed the zero rate to be applied to certain food supplement products (vitamins, minerals and fish oils). This concessionary approach expanded as the market developed over the years and resulted in the zero rating by Revenue of further similar products, including products other than vitamins, minerals and fish oils.

Revenue has acknowledged that the scope of its concessionary approach broadened progressively over time to the point that it had become increasingly difficult to maintain an effective distinction between food supplement products that could benefit from the zero rate and those that were standard rated. Revenue acknowledges that this concessionary approach was unsatisfactory and led to diverging and inconsistent practices, and there were continuous efforts by elements in the industry to expand its scope.

Following complaints from the Irish Health Trade Association (IHTA), Revenue conducted a comprehensive review of the VAT treatment of food supplement products, including getting an expert report on the definition of food for the purposes of the VAT Consolidation Act. The expert prepared a detailed, scientific report that concluded that food supplement products are not conventional food. Based on the expert report and its own legal analysis, Revenue concluded that the status quo was no longer sustainable. Following the review, Revenue engaged with my Department concerning policy options that might be considered in the context of Finance Bill 2018. The relevant legislation was not changed in Finance Bill 2018 and therefore Revenue issued new guidance in December 2018 which removed the concessionary zero rating of various food supplement products with effect from 1 March 2019.

Following representation from Deputies and from the industry, I wrote to Revenue outlining my plans to examine the policy and legislative options for the taxation of food supplement products in the context of Finance Bill 2019. Revenue responded by delaying the withdrawal of its concessionary zero rating of the food supplement products concerned. This allowed time for my Department to carry out a public consultation on the taxation of food supplement products.

The public consultation ran from 18 April to 24 May 2019 and sought input from a wide range of interested parties, including from health and nutrition experts and the Minister for Health. In total, 121 submissions were received. This included submissions from individuals, businesses, lobby groups and a political party. The results of the consultation were included in the recently published Tax Strategy Group paper on VAT. The options set out in the TSG paper are the only options available; either the standard rate is maintained, or the reduced rate is introduced.

I am making provision in Finance Bill 2019 to apply the 13.5% rate of VAT to all food supplement products, which will take effect from 1 January 2020. This measure is expected to be cost neutral. The food supplement industry is relatively small in Ireland (approx. €60 million) and the loss to the Exchequer incurred as a result of the lowering of the rate for products currently liable to the standard rate of VAT (23%), should be offset by the increase to products that previously were concessionally zero rated.

Foods for specific groups such as infant follow-on formulae and infant foods, foods for special medical purposes and specially formulated foods (e.g. total diet replacement for weight control) will remain zero rated. These are well established and defined categories of food that are essential for vulnerable groups of the population. Fortified foods, such as yoghurts and cereals fortified with vitamins and minerals, will also remain zero rated as they are food.

Folic acid, vitamin and mineral products for human oral use which are licensed or authorised as medicines by the Health Products Regulatory Authority (‘HPRA’) will remain zero rated under a different VAT provision.

Budget Measures

Questions (128)

Brendan Howlin

Question:

128. Deputy Brendan Howlin asked the Minister for Finance the measures included in the Finance Bill 2019 that will result in additional revenue for the Exchequer in 2020 that were not announced on budget day, in tabular form; and if he will make a statement on the matter. [44511/19]

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Written answers (Question to Finance)

As usual, there are a number of measures in the Finance Bill 2019 that were not announced on Budget day. However, as far as I am aware, there are no measures included in the Bill that will result in additional revenue for the Exchequer in 2020 that were not announced on Budget day.