Written Answers Nos. 293-309
293. Deputy Brendan Griffin asked the Minister for Finance if his attention has been drawn to the heavy impact of Brexit tariffs and VAT requirements on TAN number holders importing used cars from the UK; if he will seek a review of regulations for such dealers in respect of marginal scheme cars; if his attention has been drawn to the shortage of quality used cars available to the Irish market; and if he will make a statement on the matter. [40392/21]
View answerIn accordance with the Agreement on the Withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union, from 1 January 2021 onwards, goods imported from Great Britain must be declared to Customs, and the goods are liable to customs duty (if applicable) and VAT at import. The Agreement is clear that this applies to all goods, and it leaves no possibility for a different arrangement such as, for example, reverting to the tax treatment of used cars that had applied during the Transition Period before 1 January. Under the terms of the Protocol on Ireland/Northern Ireland, trade in goods between Ireland and Northern Ireland should continue as before, with no requirement for customs declarations and no liability to customs duty and VAT at import.
Since the UK left the EU Single Market and Customs Union, customs formalities apply to vehicles being imported from Great Britain. While I appreciate the significant impact this has on businesses, Customs is an EU competence and applies in all Member States, and it is not possible for me, as Minister for Finance, to implement any measures or suspend any measures that are not in compliance with EU Customs legislation.
It should be noted however, that the EU-UK Trade and Cooperation Agreement (TCA) eliminated tariff duties for trade between the EU and Great Britain where the relevant rules of origin are met. If the vehicles are of UK origin, then a 0% tariff rate applies. Tariffs of 10% will apply to vehicles which are not of UK origin. However, in certain instances returned goods relief may apply. This relief applies where the vehicles were originally exported from the EU, have not been altered and are re-imported within three years of export from the EU. In very specific circumstances, relief from Value-Added Tax (VAT) may also apply where the goods are re-imported into the EU by the same economic entity that originally exported the goods out of the EU.
Further detailed information on Returned Goods Relief and Movement of Motor Vehicles including proofs required for claiming the relief is available on the Revenue Website.
There is a particular issue with margin scheme cars. The UK has introduced significant changes to the VAT regime for used cars imported from Great Britain into Northern Ireland and extended the scope of the Margin Scheme to them. Under the Margin Scheme, a car dealer simply accounts for VAT on his or her gross profit margin on the sale of a used car, i.e. on the difference in the trade-in and resale prices. The UK had signalled that it would approach the European Commission to seek changes to the rules that apply under the Withdrawal Agreement/Protocol but they moved unilaterally on 14th January 2021 and published new rules that apply retrospectively from 31 December. The UK asked the Commission for a permanent derogation from the VAT Directive to allow them to operate the scheme but the Commission refused on the basis that the margin scheme cannot be applied on sales in Northern Ireland of second-hand cars imported from any 3rd country including Great Britain.
As a result, and after considering the scale of the threat posed by the abusive routing of cars imported into the State from Great Britain through Northern Ireland and the resulting non-payment of VAT at import, Revenue changed its guidance and indicated that cars imported from Great Britain into Northern Ireland after 31 December 2020 could only be subsequently imported into the State and reregistered here after they were declared to customs and customs duty, if applicable, and VAT at import were paid. This ensures that they are liable for VAT and Duty on the same basis as used cars brought into the State from Britain. The guidance also indicated that used cars imported into Northern Ireland from Great Britain prior to 1 January 2021 would not be subject to the need to complete a customs declaration and would not be liable to customs duty or VAT at import. The additional paperwork requirements have been kept to a minimum with a simplified Supplementary Import Declaration being required which allows the VAT on import to be paid.
The current approach explained above addresses the risk of substantial tax avoidance that has been posed since the 14 January announcement, should parties who are importing used vehicles from Britain into the State decide to route the transaction via Northern Ireland. The aim is to bring equal tax treatment to used car imports from Great Britain into the State, whether they be imported through a direct or an indirect route. The approach is intended to be temporary in nature, pending a resolution to the issue between the UK and the European Commission.
294. Deputy Brendan Griffin asked the Minister for Finance if he will introduce a VAT refund scheme for first-time buyers or builders in respect of the first €200,000 spent on materials and labour; and if he will make a statement on the matter. [40412/21]
View answer443. Deputy Brendan Griffin asked the Minister for Finance his views on whether it is sustainable to continue to tax housing construction and materials so heavily at a time when persons and the economy require houses more than anything else; his further views on whether a fundamental shift to targeted low tax policy in respect of housing construction and material would be the obvious and simplest way to support first-time buyers and builders in particular; and if he will make a statement on the matter. [41309/21]
View answerI propose to take Questions Nos. 294 and 443 together.
I am advised by Revenue that the VAT rating of goods and services is subject to EU VAT legislation with which Irish VAT law must comply. In general, the EU VAT Directive provides that all goods and services are liable to VAT at the standard rate, currently 23% in Ireland, unless they fall within categories of goods and services specified in Annex III of the VAT Directive, in respect of which Member States may apply a lower rate from VAT. In line with the VAT Directive, Ireland also maintains several standstill provisions and derogations that allows it to maintain reduced rates to certain supplies for historical reasons. While most Member states apply their standard VAT rate to construction services, it is important to realise that Ireland already applies a 13.5% reduced rate of VAT to all construction services under a derogation from the EU VAT Directive.
The Deputy is suggesting a differentiation of VAT rate on housing according to the type of buyer involved. Under the EU VAT Directive, for the purposes of applying VAT rates, it is not permissible to differentiate between first-time and other categories of buyers, or to differentiate between the supply of different types of residential property (based, for example, on the type or size of residential property).
While it would be legally possible to decide to further reduce the VAT rate on the construction, repair and renovation of residential property, this would not be possible for non-residential property; however, such an approach would be very undesirable, as it would involve having two separate VAT rates applying to similar construction services, which would be complex to administer and could easily lead to accidental or fraudulent underpayments of VAT.
The Deputy asks about VAT on building materials. Revenue advises me that, under the EU VAT Directive and Irish VAT legislation, the supply of building materials is liable to VAT at the standard rate, currently 23%. Member States are not permitted to apply a VAT rate lower than the standard rate to building materials, although Ireland – by way of historic derogation from the general rule – is permitted to continue to apply its reduced rate, currently 13.5%, to the supply of ready-to-pour concrete and certain concrete blocks. It should be borne in mind that while builders and developers charge VAT on sales of developed residential property at the 13.5% reduced rate, they are entitled to recover the full VAT incurred in the development of that property, including VAT at the standard rate on building materials. Thus, even were it possible, a reduction in the rate of VAT on building materials would not reduce building costs.
On the question of the level of the VAT rates generally, it is worth noting that it is unlikely that a reduction would be passed to consumers; the construction industry have previously indicated that they see a reduction in the VAT rate as a method to improve cash flow and not as a tool to effect price reductions.
The Deputy also asked about the possibility of a VAT Refund Scheme for first time buyers or builders in respect of the first €200,000 spent on materials and labour. I am advised by Revenue that the introduction of a VAT compensation mechanism for purchasers is generally contrary to the operation of VAT. It is for this reason that Ireland has not introduced any new VAT refund orders since the 1980’s and any changes to VAT refunds since then have been either by EU requirement or making minor changes to existing orders. In any event, as a normal feature of the VAT system, builders are already entitled to recover the VAT they incur in the development of property.
In addition, the Deputy will be aware that rather than a reduction in the VAT rate on the construction sector I introduced the Help to Buy (HTB) incentive to assist first-time purchasers with the deposit they need to buy or build a new house or apartment. Section 477C Taxes Consolidation Act 1997 outlines the definitions and conditions that apply to the scheme. The incentive gives a refund of Income Tax and Deposit Interest Retention Tax (DIRT) paid in Ireland over the previous four years, subject to limits outlined in the legislation. As well as assisting first-time buyers, the fact that the HTB is targeted at new residential developments has also assisted with the supply of residential properties for would-be purchasers.
295. Deputy Johnny Guirke asked the Minister for Finance the revenue that was generated by each local authority from local property tax fees and charges in each of the years 2016 to 2020 and to date in 2021, in tabular form. [40608/21]
View answer401. Deputy Johnny Guirke asked the Minister for Finance the amount of local property tax that was collected by Meath County Council in each of the years 2013 to 2020 and to date in 2021, in tabular form. [40563/21]
View answer402. Deputy Johnny Guirke asked the Minister for Finance the amount of local property tax that was collected by Westmeath County Council in each of the years 2013 to 2020 and to date in 2021, in tabular form. [40564/21]
View answerI propose to take Questions Nos. 295, 401 and 402 together.
Revenue publishes detailed quarterly and end of year statistics on Local Property Tax (LPT), on its website at link: https://www.revenue.ie/en/corporate/information-about-revenue/statistics/local-property-tax/
Among other information, these statistics include the amount of LPT collected by each Local Authority in each year since 2013 and for the first two quarters of 2021.
296. Deputy Ruairí Ó Murchú asked the Minister for Finance the current and future plans to tackle the crisis in terms of public liability insurance; the expected timelines in this regard; and if he will make a statement on the matter. [40953/21]
View answerAs committed to in the 2020 Programme for Government, Government is prioritising reform of the insurance sector with particular emphasis on motor, public liability, and employer liability insurance. The whole-of-Government approach being taken through the Action Plan for Insurance Reform therefore sets out 66 actions which aim to improve both the cost and availability of this key financial service, particularly for businesses. As the Deputy may be aware, the Cabinet Committee Insurance Reform Sub-Group earlier this month published the first six-monthly Implementation Report of the Action Plan. This shows that work is progressing well to implement these important reforms, with 34 of the 66 actions now completed. The Sub-Group’s focus now is on implementing the outstanding actions on time.
One of the key achievements in the first half of this year under the Action Plan was the implementation of the Personal Injuries Guidelines , which represents a key achievement of this insurance reform agenda, and was realised several months ahead of schedule. The Guidelines significantly reduce award levels for many categories of common injuries, particularly those of soft tissue. Of note is that a number of common injuries will now move to the jurisdiction of the District rather than the Circuit Court, thus reducing associated legal fees. The Guidelines also provide guidance in relation to injuries previously not included in the Book of Quantum and will be used by both the Personal Injuries Assessment Board (PIAB) and the judiciary. Therefore, they should help to bring more certainty to claimants and insurers, and as such reinforce the benefits of using the PIAB to settle claims. This in turn should further reduce the costs of claims, particularly legal fees. I have previously set out my view that these costs, rather than the profit component, tend to represent a bigger factor in the cost of insurance premiums. As such, it is important that they are lowered.
As Minister for Finance, my expectation is that insurers will now commence reflecting savings from reduced award levels to customers, in line with past commitments, and I intend to hold them to account on this. Minister of State Fleming met with the CEOs of the main insurers operating in Ireland to set out the Government’s expectation in this regard. These engagements were positive, with insurers indicating that they will begin lowering premiums in response to the Guidelines. The Minister of State will meet with CEOs again later this year to review their ongoing response to this and other key reforms.
As the Deputy will also be aware, the Central Bank earlier this month published the first National Claims Information Database (NCID) report on employer liability, public liability and commercial property insurance. This is a rich source of data, which represents a baseline that will continue to be enhanced in the coming years, and enable us to analyse market developments. Ireland is virtually unique in having this level of information and transparency available to policy makers. Further development of the NCID is a key priority for my Department going forward, to allow Government to make informed and appropriate decisions when it comes to improving the public liability insurance market, as well as other forms of insurance for businesses. My officials are currently engaging with the Central Bank to consider what enhancements could be made, in particular so that the impact of the Personal Injury Guidelines can be seen in future motor, employer and public liability reports.
Finally, I would like to assure the Deputy that work remains ongoing across Government to deliver further elements of the Action Plan, including measures to reform the PIAB, reduce fraud, and make changes to the duty of care in order to strengthen waivers and notices. It is my hope that the implementation of these key actions in particular should further help to lower public liability insurance costs for businesses.
297. Deputy Ruairí Ó Murchú asked the Minister for Finance the engagements he has had with insurance underwriters to bring more into the market; and if he will make a statement on the matter. [40954/21]
View answerThis Government is committed to improving the cost and availability of insurance for all consumers, businesses and community groups. In this regard, the Action Plan for Insurance Reform sets out 66 actions across a number of policy areas. As the Deputy may be aware, the Government recently published the first Action Plan Implementation Report, which shows that work is progressing well to implement these important reforms, with 34 of the 66 actions now completed.
One of the key achievements of the Government’s reform agenda is the new Office to Promote Competition in the Insurance Market , which is chaired by Minister of State Fleming. Since its establishment, the Office has held meetings with a wide range of stakeholders including insurance companies, representative bodies, civil society groups and state regulators on the issues surrounding competition. Minister Fleming met with CEOs of the major insurance providers in Ireland earlier in the year and will meet with them again in the autumn to discuss a variety of issues with them. I would like to add that we are already seeing indications that the insurance industry is beginning to respond positively to our reform agenda with the announcement recently by a specialist insurer that it will expand its footprint in Ireland. This is a welcome development, which may prompt other firms to expand their product offerings.
The Department is also working closely with the IDA to bring new entrants into the Irish insurance market and to improve its overall competitiveness. Officials from both are developing a customised proposal for potential market entrants and are identifying targets to engage intensively with. This will, in the first instance, seek out providers who offer insurance in areas which have been identified as ‘pinch-points’ in the Irish market where some customers are encountering difficulties.
The Deputy may also be aware that the Central Bank recently published the first National Claims Information Database (NCID) report on employers' liability (EL), public liability (PL) and commercial property insurance. It showed that while many businesses in Ireland are accessing affordable insurance, some industries are encountering difficulties. This report is a rich source of data which will further enhance the transparency of the sector. My officials are also engaging with the Central Bank to consider what enhancements could be made to further improve transparency in the next iteration of this report, which will prove to be useful in encouraging new entrants to the Irish insurance market.
Finally, I would like to take this opportunity to assure the Deputy that securing a more sustainable and competitive market through deepening and widening the supply of insurance in Ireland remains a key policy priority for this Government. In this regard, it is my intention to work with my Government colleagues to ensure that implementation of the Action Plan can have a positive impact on the affordability and availability of insurance for individuals, businesses, community and voluntary groups across Ireland.
298. Deputy Richard Boyd Barrett asked the Minister for Finance the estimated full year cost of uncollected tax revenue as a result of individuals offsetting their private health insurance costs against tax liabilities. [41218/21]
View answerI am informed by Revenue that the estimated cost of Medical Insurance Relief is included in the ‘Costs of Tax Expenditures Publication’ (Credits, Allowances and Reliefs), which is available at link: https://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/costs-expenditures.aspx.
For the convenience of the Deputy, the publication states that the cost of Medical Insurance Relief in 2018 was €355.7m and over 1.25m taxpayers claimed this relief.
The current publication includes data up to 2018. The publication will be updated with data for 2019 in the coming weeks when analysis of tax returns for that year is finalised. This information will be available at the same link as provided above.
299. Deputy Mairéad Farrell asked the Minister for Finance if banks are entitled to refuse a mortgage to a person whose employer is availing of the employment wage subsidy scheme; and if not, the avenue that is open to employees who are being refused on such a basis. [39101/21]
View answerSince the COVID-19 situation first arose, I have maintained contact with the BPFI and lenders on the measures they have put in place to assist their customers who are economically impacted by the pandemic. In relation to the particular issue of new mortgage lending, the main retail banks previously confirmed that they are considering mortgage applications and mortgage drawdowns in relation to their customers who were on the Employment Wage Subsidy Scheme on a case by case basis and that they are taking a fair and balanced approach. Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. Therefore, if mortgage applicants have any queries or concerns about the impact of COVID-19 on their mortgage application, they should in the first instance contact their lender directly on the matter.
However, there are certain consumer protection requirements which govern the provision of mortgage credit. For example, the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (CMCAR) provide that, before concluding a mortgage credit agreement, a lender must make a thorough assessment of the consumer’s creditworthiness with a view to verifying the prospect of the consumer being able to meet his or her obligations under the credit agreement. The CMCAR further provide that a lender should only make credit available to a consumer where the result of the creditworthiness assessment indicates that the consumer’s obligations resulting from the credit agreement are likely to be met in the manner required under that agreement. The assessment of creditworthiness must be carried out on the basis of information on the consumer’s income and expenses and other financial and economic circumstances which are necessary, sufficient and proportionate.
In addition, the Central Bank’s Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability’ requirements on lenders. Under these requirements, lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower. The Code specifies that the affordability assessment must include consideration of the information gathered on the borrower’s personal circumstances and financial situation. Furthermore, where a lender refuses a mortgage application, the CMCAR requires that the lender must inform the consumer without delay of the refusal. In addition, the Code requires that the lender must clearly outline to the consumer the reasons why the credit was not approved, and provide these reasons on paper if requested.
Within this regulatory framework, the decision to grant or refuse an application for mortgage credit remains a commercial matter for the individual lender. Also a loan offer may contain a condition that would allow the lender to withdraw or vary the offer if in the lender’s opinion there is any material change in circumstances prior to drawdown. In such cases, the decision to withdraw or vary the offer is also a commercial and contractual decision for the lender.
Nevertheless, the Central Bank has indicated that it expects all regulated firms to take a consumer-focused approach and to act in their customers’ best interests at all times, including during the COVID-19 pandemic. If a mortgage applicant is not satisfied with how a regulated firm is dealing with them in relation to an application for credit or the drawn down of credit, or they believe that the regulated firm is not following the requirements of the Central Bank’s codes and regulations or other financial services law, they should make a complaint directly to the regulated firm. If the mortgage applicant is still not satisfied with the response from the regulated firm, he or she can refer the complaint to the statutory Financial Services and Pensions Ombudsman.
300. Deputy Jennifer Carroll MacNeill asked the Minister for Finance further to Parliamentary Question No. 181 of 6 July 2021, the status of hybrid vehicles and if they fall into the EV category; the position on commercial vehicles in relation to this matter; and if he will make a statement on the matter. [39111/21]
View answerIn Finance Act 2019 I legislated for a CO2-based benefit-in-kind (BIK) regime for company cars from 1/1/2023. From that date the amount taxable as BIK remains determined by the car’s original market value (OMV) and the annual business kilometres driven, while new CO2 emissions-based bands will determine whether a standard, discounted, or surcharged rate is taxable. The number of mileage bands is reduced from five to four.
The BIK applied to hybrid electric vehicles will be dependent on their CO2 emissions, OMV, and annual kilometres driven. Well-performing hybrids will fall into Band A (0-59gCO2/km) and thus be liable to BIK at a favourable rate between 9%-22.5% depending on mileage.
Commercial vehicles are currently charged a flat rate of 5% BIK, and I legislated in Finance Act 2019 for an increase to 8% to take effect on 1/1/2023.
301. Deputy Róisín Shortall asked the Minister for Finance further to Parliamentary Question No. 82 of 30 June 2021, the percentage of notice of opinion and notice of assessments issued under the general anti-avoidance rules which result in an additional tax yield; and if he will make a statement on the matter. [39253/21]
View answerI am advised by Revenue that, of the 517 Notices of Opinion issued by Revenue under section 811 of the Taxes Consolidation Act 1997, 72 are still under enquiry. Of the 445 Notices finalised, 12.4% (55 Notices), resulted in a settlement with Revenue which included additional tax.
I understand that of the 445 notices finalised, 85.2% (379 notices), were withdrawn resulting in a nil yield following the Supreme Court’s decision in the Hans Droog case. As advised to the Deputy in Parliamentary Question No. 82 of 30 June 2021, it was successfully argued by the appellant in that case that time limits set out in legislation relating to the self-assessment system applied also to the general anti-avoidance legislation.
Also as previously advised to the Deputy, I understand from Revenue that no assessments have issued to-date under section 811C of the Taxes Consolidation Act 1997 which applies to tax avoidance transactions commenced after 23 October 2014 and requires the issue by Revenue of a Notice of Assessment instead of a Notice of Opinion. I understand it has been possible for Revenue to challenge tax avoidance transactions identified that took place after 23 October 2014 using specific legislative provisions, therefore to-date it has not been necessary for Revenue to issue assessments under section 811C.
302. Deputy Róisín Shortall asked the Minister for Finance further to Parliamentary Question No. 82 of 30 June 2021, the penalties or other consequences for the legal, accounting or other professional advisers who were involved in advising or implementing the transaction in cases in which notice of opinion and notice of assessments issued under the general anti-avoidance rules result in an additional tax yield; and if he will make a statement on the matter. [39254/21]
View answerI am advised by Revenue that there is no provision in the legislation to impose penalties or other consequences on professional advisors involved in advising or implementing transactions in respect of which Revenue issue a Notice of Opinion under the general anti-avoidance legislation in section 811 of the Taxes Consolidation Act (TCA) 1997, or an assessment under section 811C of the TCA 1997, and which subsequently result in an additional tax yield when finalised.
The Deputy should be aware that Finance Act 2010 introduced a Mandatory Disclosure Regime, the purpose of which is to ensure tax advisors and promoters of certain types of transactions as defined, provide information to Revenue on the nature of the transaction together with other details. This ensures Revenue is informed of these transactions and can determine if they consider the transaction represents tax avoidance and if so, the action they consider appropriate.
Failure to comply with this Mandatory Disclosure Regime may result in an advisor or promoter becoming liable to a civil penalty, as provided for in section 817O of the TCA 1997. The quantum of penalty is related to the level of non-compliance with the reporting requirement. I am advised by Revenue that to date they have not identified any such non-disclosure cases.
303. Deputy Martin Browne asked the Minister for Finance if his attention has been drawn to the fact that a tourism business (details supplied) has been forced to close due to being unable to get insurance which will lead to the loss of up to 20 jobs and removes an important tourist attraction from north County Tipperary; and if he will make a statement on the matter. [39281/21]
View answerI am conscious of the difficulties that the absence or withdrawal of insurance cover can cause to homeowners and businesses, and that is one of the reasons the Government has prioritised insurance reform. While neither I, nor the Central Bank of Ireland, can interfere in the provision or pricing of insurance products, I can assure the Deputy that this Government is committed to improving the cost and availability of insurance for all consumers, businesses and community groups. This includes the important leisure and hospitality sectors.
In this regard, the Action Plan for Insurance Reform sets out 66 actions which aim to bring down costs for consumers and business; introduce more competition into the market; prevent fraud and reduce the burden that insurance costs can have on business, community and voluntary organisations. As you may be aware, the Government recently published the first Action Plan Implementation Report, which shows that work is progressing well to implement these important reforms, with 34 of the 66 actions now completed.
Among these key achievements has been the implementation of new Personal Injuries Guidelines, which have significantly lowered award levels for many categories of common injuries, particularly those of soft tissue. As awards have been reduced, we now expect that insurance premiums should also be reduced. This is a logical consequence and it is also the commitment that the industry has made. Minister Fleming will meet with CEOs of the major insurance providers again later this year to review their ongoing response to this and other key reforms.
Another key achievement of the reform agenda is the new Office to Promote Competition in the Insurance Market . Since its establishment, the Office has held meetings with wide range of stakeholders including insurance companies, representative bodies, civil society groups and state regulators on the issues surrounding competition. Minister Fleming will report on a regular basis to the Cabinet Sub-Group on its progress.
The Department is also working closely with the IDA to bring new entrants into the Irish insurance market and to improve its overall competitiveness. Officials from both are developing a customised proposal for potential market entrants and are targets to engage intensively with. This will, in the first instance, target providers who offer insurance in areas which have been identified as ‘pinch-points’ in the Irish market such as the one you have highlighted.
The Deputy may also be aware that the Central Bank recently published the first National Claims Information Database report on employers' liability (EL), public liability (PL) and commercial property insurance. It showed that many businesses in Ireland are accessing affordable insurance, but some industries are finding it very difficult. This is a rich source of data which will further enhance the transparency of the sector. My officials are also engaging with the Central Bank to consider what enhancements could be made to further improve transparency through the next iteration of this report, so that the impact of the Guidelines can be seen in the EL, PL and commercial property market.
I would like to add that we are already seeing indications that the insurance industry is beginning to respond positively to our reform agenda.
Finally, it may interest the Deputy to know that Insurance Ireland, the representative body for insurance providers in this country, operates an Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance, which can be accessed at feedback@insuranceireland.eu.
304. Deputy Martin Browne asked the Minister for Finance his views on the high cost of insurance that is being asked of operators in the forestry industry. [39321/21]
View answerI am very conscious of the difficulties facing some sectors, including those such as the forestry sector, with regard to the affordability and availability of insurance cover. It should be noted at the outset that neither I, nor the Central Bank of Ireland, can direct the pricing or provision of insurance products, as this is a commercial matter which individual companies assess on a case-by-case basis.
The Government has nevertheless prioritised the reform of the insurance sector in order to improve the cost and availability of this key financial service, including for businesses. The Action Plan for Insurance Reform sets out 66 actions in this regard across several policy areas, including my Department, with 95% due to be completed by the end of 2021. At its most recent meeting in June, the Cabinet Sub-Group on Insurance Reform, which oversees the implementation of the Action Plan, reflected upon the considerable progress made in the first half of this year. Subsequently, the first Action Plan Implementation Report was published earlier this month which shows that 34 out of the 66 actions now completed. One of the key achievements has been the adoption of new personal injuries guidelines, which have significantly reduced awards for a range of injuries and I now expect that premiums will decline as a consequence. It is something that both I and Minister of State Fleming have stressed the necessity of in our engagements with the insurance industry over recent months.
Another significant achievement has been the creation of the new Office to Promote Competition in the Insurance Market within the Department of Finance. The role of the Office is twofold: to assist in reducing insurance costs, and increasing the availability of cover, by promoting competition in the Irish insurance market. The Office has held a number of meetings with key stakeholders to discuss important matters regarding reducing cost, consumer empowerment and increasing the provision of relevant information. Minister Fleming, who chairs the Office, will report on a regular basis to the Cabinet Sub-Group on its progress.
The Department is also working closely with the IDA to bring new entrants into the Irish insurance market and to improve its overall competitiveness. Officials from both are developing a customised proposition for potential market entrants and are identifying a specific targets to engage intensively with. This will, in the first instance, target providers who offer insurance in areas which have been identified as ‘pinch-points’ in the Irish market.
I would like to add that we are already seeing some indications that the insurance industry is beginning to respond positively to our reform agenda.
In conclusion, seeking to secure a more sustainable and competitive market through deepening and widening the supply of insurance in Ireland remains a key policy priority for this Government. In this regard, it is my firm belief that ongoing work across Government to deliver the remaining elements of the Action Plan, including measures to reform the Personal Injuries Assessment Board (PIAB), reduce fraud, and make changes to the duty of care, will help more companies to expand their product lines or enter into the Irish market. This, in turn, will lower the insurance costs for customers across all markets, including those in the forestry sector.
305. Deputy Kathleen Funchion asked the Minister for Finance the amount of local property tax collected in County Carlow in 2019, 2020 and to date in 2021, in tabular form; and if he will make a statement on the matter. [39367/21]
View answer306. Deputy Kathleen Funchion asked the Minister for Finance the amount of local property tax collected in County Kilkenny in 2019, 2020 and to date in 2021, in tabular form; and if he will make a statement on the matter. [39368/21]
View answerI propose to take Questions Nos. 305 and 306 together.
Revenue publishes detailed statistics on Local Property Tax (LPT), through quarterly and end of year updates on its website at: https://www.revenue.ie/en/corporate/information-about-revenue/statistics/local-property-tax/
Among other information, these statistics include the amount of LPT collected by each Local Authority in each year since 2013 and for the first two quarters of 2021.
307. Deputy Eoin Ó Broin asked the Minister for Finance further to Parliamentary Question No. 195 of 25 May 2021 and with respect to the review of mobility supports for persons with disabilities and the criteria for qualification for the disabled drivers and disabled passengers scheme, if there have been changes made to the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994 in view of the Supreme Court decision of June 2020 (details supplied). [39454/21]
View answerThe Disabled Drivers & Disabled Passengers Scheme provides relief from Vehicle Registration Tax and VAT on the purchase and use of an adapted car, as well as an exemption from motor tax and an annual fuel grant. The cost of the scheme in 2020, excluding motor tax, was €67m.
The Scheme is open to severely and permanently disabled persons as a driver or as a passenger and also to certain charitable organisations. In order to qualify for relief, the applicant must hold a Primary Medical Certificate issued by the relevant Senior Area Medical Officer (SAMO) or a Board Medical Certificate issued by the Disabled Driver Medical Board of Appeal. Certain other qualifying criteria apply in relation to the vehicle, in particular that it must be specially constructed or adapted for use by the applicant.
To qualify for a Primary Medical Certificate an applicant must be permanently and severely disabled. The terms of the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994 set out six medical criteria, at least one of which is required to be satisfied in order to obtain a Primary Medical Certificate.
A Supreme Court decision of 18th June 2020 found in favour of two appellants against the Disabled Drivers Medical Board of Appeal's refusal to grant them a Primary Medical Certificate. The judgement found that the medical criteria set out in the Regulations did not align with the regulation making mandate given in the primary legislation to further define criteria for ‘severely and permanently disabled’ persons.
On foot of the legal advice received, it became clear that it was appropriate to revisit the six medical criteria set out in Regulation 3 of Statutory Instrument 353 of 1994 for these assessments. In such circumstances, PMC assessments were discontinued until a revised basis for such assessments could be established. The medical officers who are responsible for conducting PMC assessments need to have assurance that the decisions they make are based on clear criteria set out in legislation. While Regulation 3 of Statutory Instrument No. 353 of 1994 was not deemed to be invalid, nevertheless it was found to be inconsistent with the mandate provided in Section 92 of the Finance Act 1989.
In order to allow for the PMC assessments to recommence I brought forward an amendment to the Finance Bill to provide for the existing medical criteria in primary legislation. Following approval of the Finance Act 2020, medical assessments recommenced from 1st January 2021.
I consider this to be an interim solution only. While I am very aware of the importance of this scheme to those who benefit from it, I am also aware of the disquiet expressed by members of this house and others in respect of the difficulties around access to the scheme. With this in mind I have asked my officials to undertake a comprehensive review of the scheme, to include a broader review of mobility supports for persons with disabilities, and on foot of that review to bring forward proposals for consideration.
Department officials have been carrying out preliminary work, including an examination of the main issues which will frame the scope of the review. Officials have also been engaging with other Departments in the context of other ongoing work in mobility supports. In particular, the Department has engaged with the Department of Children, Equality, Disability, Integration and Youth in the context of a working group established early last year by the Minister for Justice before the work was interrupted by the Covid-19 pandemic. The group, under the National Disability Inclusion Strategy 2017-2021, was tasked with a review of transport supports encompassing all Government funded transport and mobility schemes for people with disabilities, to enhance the options for transport to work or employment supports for people with disabilities and to develop proposals for development of a coordinated plan for such provision.
It is envisaged that the review group will be established shortly and will include stakeholders from other Departments, the Disabled Drivers Medical Board of Appeal and other representative groups.
Finally, I would like to clarify that the Scheme itself is still operating. All persons or charitable organisations that can currently access the Scheme will continue to be able to do so and make claims for tax reliefs and the fuel grant in the normal manner.
308. Deputy Pearse Doherty asked the Minister for Finance if the reduced rate of VAT for hospitality and tourism from 13.5% to 9 % is included in the base in the Summer Economic Statement 2021. [39504/21]
View answerBudget 2021 introduced a reduction in the rate of VAT for the hospitality and tourism sector from 13.5 per cent to 9 per cent. This measure was, initially, to provide support from November 2020 to end-2021. In recognition of the continuing challenges facing the sector as a result of the pandemic and the necessary public health restrictions, the Government announced in the Economic Recovery Plan that the temporary VAT rate reduction will be extended to 1 September 2022.
The original costing for this scheme included in the budgetary arithmetic in October 2020 was for a total cost of €401 million, as listed in the Budget 2021 Tax Policy Changes document. The extension of the measure as announced in the Economic Recovery Plan is estimated to cost an additional €350 million next year.
The full estimated cost of this measure was incorporated into the high level, 'top down' update to my Department's fiscal projections published in the Summer Economic Statement published earlier this month.
309. Deputy Pearse Doherty asked the Minister for Finance if Covid-19 related measures as outlined in table 2 of the Summer Economic Statement 2021 are included in the base or will form part of the budgetary package for the years 2022 to 2025; and if he will make a statement on the matter. [39505/21]
View answerI refer the Deputy to table 4 of the Summer Economic Statement 2021 (SES) which provides a breakdown of temporary versus permanent voted expenditure. The expenditure rule outlined in the SES – which fixes the growth rate of expenditure at trend growth until the mid-part of the decade – refers only to permanent voted expenditure.
The Covid-related measures as outlined in table 2 of the SES are temporary measures which will not be included in the base nor form part of a budgetary package.
The Budget package for 2022 is €4.7 billion. Separate to this, a total of €6.8 billion has been allocated for Covid-related expenditure. The tax measures referred to in table 2 will fall out of the tax base once they expire.
There is a minimal level of Covid-related expenditure from 2023 onwards. This relates to ‘automatic stabilisers’, and again, is not included in the budgetary packages in these years.
