Written Answers Nos. 93-123
98. Deputy Holly Cairns asked the Minister for Finance the steps he is taking to make the necessary regulatory changes to enable credit unions to significantly increase their footprint in the mortgage market. [46041/22]
View answerIt is important to recognise that credit unions can and do provide mortgages, with over half the sector engaging in mortgage lending at some level. As at June 2022 credit unions had a mortgage book of approximately €301 million, which had grown 22% year-on-year.
Since 1 January 2020, credit unions now have a combined capacity to provide up to €1.1 billion in additional SME and mortgage loans, with further capacity of up to 15% available to credit unions on approval by the Central Bank.
6 credit unions are currently approved for the combined lending limit of 15% of assets with 1 additional application to the Central Bank currently under consideration.
The Programme for Government commitment to Review the Policy Framework of Credit Unions is now complete and I am pleased to say that I have received Cabinet approval to draft the legislative proposals emanating from the Review.
I am also pleased to say that the Credit Union (Amendment) Bill 2022 has received priority status for the Dáil’s autumn session and I look forward to progressing this legislation through the Oireachtas.
106. Deputy Fergus O'Dowd asked the Minister for Finance to review as a matter of urgency the rates and tax relief changes that will commence on 1 January 2023 (details supplied); and if he will make a statement on the matter. [46098/22]
View answer151. Deputy Alan Dillon asked the Minister for Finance the grants and benefit-in-kind rates that will take effect in 2023 for new battery electric vehicles; and if he will make a statement on the matter. [46360/22]
View answerI propose to take Questions Nos. 106 and 151 together.
At the outset, the Deputy should note that recent Government policy has focused on strengthening the environmental rationale behind company car taxation. Until the changes I brought in as part of the Finance Act 2019, Ireland’s vehicle benefit-in-kind regime was unusual in that there was no overall CO2 rationale in the regime. This is despite a CO2 based vehicle BIK regime being legislated for as far back as 2008 (but never having been commenced). In Finance Act 2019, I legislated for a CO2-based BIK regime for company cars from 1 January 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. EVs will benefit from a preferential rate of BIK, ranging from 9 – 22.5% depending on mileage. Fossil-fuel vehicles will be subject to higher BIK rates, up to 37.5%. This new structure with CO2-based discounts and surcharges will incentivise employers to provide employees with low-emission cars.
I am aware, there have been arguments surrounding the mileage bands in the new BIK structure as they can be perceived as incentivising higher mileage to avail of lower rates, leading to higher levels of emissions. The rationale behind the mileage bands is that the greater the business mileage, the more the car is a benefit to the company rather than its employee (on average); and the more the car depreciates in value, the less of a benefit it is to the employee (in years 2 and 3) as the asset from which the benefit is derived is depreciating faster. Mileage bands also ensure that cars more integral to the conduct of business receive preferential tax treatment.
I believe that better value for money for the taxpayer is achieved by curtailing the amount of subsidies available and building an environmental rationale directly into the BIK regime. It was determined in this context that reforming the BIK system to include emissions bands provides for a more sustainable environmental rationale than the continuation of the current system with exemptions for electric vehicles (EVs). This will bring the taxation system around company cars into step with other CO2-based motor taxes as well as the long-established CO2-based vehicle BIK regimes in other member states.
In addition to the above and in light of government commitments on climate change, Budget 2022 extended the preferential BIK treatment for EVs to end 2025 with a tapering mechanism on the vehicle value threshold. This BIK exemption forms part of a broader series of very generous measures to support the uptake of EVs, including a reduced rate of 7% VRT, a VRT relief of up to €5,000, low motor tax of €120 per annum, SEAI grants, discounted tolls fees, and 0% BIK on electric charging.
Finally, it should be noted that this new BIK charging mechanism was legislated for in 2019 and was announced as part of Budget 2020. I am satisfied that this has provided a sufficient lead in time to adapt to this new system before its implementation in 2023.
107. Deputy Neale Richmond asked the Minister for Finance his views on the latest recommendations from the Commission on Taxation; and if he will make a statement on the matter. [46250/22]
View answer117. Deputy Robert Troy asked the Minister for Finance his views on the taxation commission report; and if he will make a statement on the matter. [46048/22]
View answer158. Deputy Mick Barry asked the Minister for Finance the aspects of the recommendations of the recent Report on the Commission on Taxation which he supports; and if he will make a statement on the matter. [46197/22]
View answerI propose to take Questions Nos. 107, 117 and 158 together.
The Commission on Taxation and Welfare was an independent group that was established in April 2021 as a result of a commitment in the Programme for Government. It was asked to independently consider how best the taxation and welfare systems can support economic activity, and promote increased employment and prosperity while ensuring that there are sufficient resources available to meet the costs of the public services and supports in the medium and longer term.
‘Foundations for the Future’, the Report of the Commission on Taxation and Welfare, was published on 14 September. It is a wide ranging report that contains over 500 pages and 116 recommendations relating to the future of our taxation and welfare systems.
The report poses serious questions that we as a society must carefully consider. The recommendations will foster real debate around how we reform our tax and welfare systems over the longer term in order to safeguard their sustainability and adapt to a rapidly changing environment. This important work is focused on the longer term and will contribute to debates on the optimal balance of taxation for many years to come.
It is clearly set out in the Commission’s report that the recommendations are not intended to be implemented all at once, but rather provide a clear direction of travel for this and future Governments around how the sustainability of the taxation and welfare systems may be improved in a fair and equitable manner.
The Commission’s recommendations are significant and wide ranging, and it is important to allow time for detailed consideration. As is acknowledged in the report, the recommendations come at a challenging time economically.
It is my intention to provide an initial response to some of the recommendations as part of the upcoming budget. It would not be appropriate for me to speculate on what specific elements of the report we might act on in advance of that process concluding over the coming weeks.
109. Deputy Richard Boyd Barrett asked the Minister for Finance the way that he intends to use the billions in additional revenue now available to him as a result of the surge in corporate tax receipts expected this year; the way that these may be used to combat the ever-worsening housing crisis; and if he will make a statement on the matter. [46268/22]
View answerSince 2015, we have seen a significant step up in corporation tax receipts, reaching €15.3 billion last year. While my Department will produce more definitive fiscal forecasts next week as part of the publication of Budget 2023, preliminary indications suggest corporation tax receipts of over €20 billion can be expected this year. This would mean corporation tax receipts would be approximately €13 billion higher than the levels seen in 2015 and will be effectively twice the pre-pandemic levels seen in 2019.
A level-shift of this magnitude, occurring over such a short timeframe, naturally raises questions regarding the sustainability of this revenue steam. In addition, the concentration of these receipts within a small number of firms raises further concerns about their sustainability.
A recent publication by my Department, entitled De-risking the Public Finances – Assessing Corporation Tax Receipts, suggests the quantum of last year’s CT receipts that are potentially windfall in nature could be in the region of €4 to €6 billion. As a result, while the headline fiscal position may look very positive, it can mask very real vulnerabilities in our public finances.
Our recent history provides a stark reminder of the dangers attached to building permanent expenditure commitments on volatile revenue sources. During the Global Financial Crisis, the collapse of our property-related tax receipts meant that very painful public expenditure measures were necessary to return the public finances to a stable position. One of the areas to suffer the most severe cuts was public investment, with long-lasting implications for both growth potential and the provision of public services. The Government is determined to ensure that history is not repeated in this regard.
In relation to housing, the Government has significantly increased investment in this area in recent years. The capital budget allocated for this year was €2.6 billion, with over €6 billion allocated in capital funding towards housing in the past three years. This Government’s housing plan, Housing for All , is backed by the largest ever housing budget in the history of the State.
Further details on the Government's spending plans will be announced next week but the Deputy will appreciate, it would not be appropriate to speculate on specific policy decisions in advance of Budget Day.
110. Deputy Catherine Connolly asked the Minister for Finance his plans to reduce the VAT rate for newspapers and digital publications to zero, following a report (details supplied); the analysis that his Department has carried out on this matter; the details of any engagement that he has had with industry representatives on this matter; and if he will make a statement on the matter. [46374/22]
View answerAs the Deputy will be aware, it is a long-standing practice that the Minister for Finance does not comment, in advance of the Budget, on any tax matters that might be the subject of Budget decision.
Currently newspapers are subject to a 9% VAT rate. It is acknowledged that Annex III of the VAT Directive which determines what products and services can fall into the reduced rate categories has been amended recently. In this regard, newspapers were recategorised in such a way that it is possible to apply a zero rate of VAT.
I am aware of the Report of the Future of Media Commission and its recommendation for a reduced or zero VAT rate for newspapers and digital publications. In addition my Department has recently had an engagement with the sector and consequently I have an understanding of the pressure it is facing at the moment. However, we are living in very challenging times, and the Government needs to continue to raise taxation in order to pay for the running of the State. This places limits on what I can do with the upcoming budget.
Revenue has indicated that the cost of zero rating newspapers and news oriented periodicals would be €42m.
In conclusion, I have made no decision on the zero rating of newspapers for VAT purposes. However it is important to note that just because a decision is not made this year, does not mean it cannot be considered next year, as the VAT Directive provides the necessary facility to change the rate at any time.
112. Deputy Catherine Connolly asked the Minister for Finance if his attention has been drawn to a report (details supplied) which highlighted Ireland’s over-reliance on corporation tax receipts from the ten highest-paying companies; his plans for a review of Ireland’s reliance on foreign direct investment; and if he will make a statement on the matter. [46373/22]
View answer142. Deputy Seán Haughey asked the Minister for Finance the action that he is taking to address the risks associated with the recent upward shift in corporation tax receipts; and if he will make a statement on the matter. [46305/22]
View answerI propose to take Questions Nos. 112 and 142 together.
I am very much aware of the Irish Fiscal Advisory Council’s views on the need to reduce the over-reliance on corporation tax receipts and the potential level of 'excess' receipts as highlighted in their Fiscal Advisory Report.
Indeed, the potential volatility and concentration risks in corporation tax receipts are dangers which my Department has repeatedly drawn attention to since 2015. Just this month my Department published analysis highlighting the fiscal vulnerabilities stemming from the upward shift in corporate tax receipts in recent years in a paper titled De-risking the Public Finances - Assessing Corporation Tax Receipts.
Analysis contained in this publication shows the share of overall tax revenue accounted for by corporation tax receipts is now at historically high levels. Receipts have been on a steep upward trajectory since 2015, reaching €15.3 billion last year, an increase of over 120 per cent relative to 2015.
A level shift of this magnitude, occurring over such a short timeframe, naturally raises questions regarding the sustainability of this revenue steam. The concentration of these receipts within a small number of firms raises further concerns about their sustainability. Indeed, as the Deputy is aware, over half of corporate tax receipts are paid by just ten large payers.
Unfortunately, it is not possible to be definitive regarding the proportion of receipts which are potentially at risk. However, analysis set out in my Department’s publication suggests the quantum of last year’s CT receipts that could be viewed as ‘windfall’ in nature could be in the region of €4 to €6 billion. As a result, there is a strong argument to treat a portion of corporation tax receipts as volatile, and hence, potentially non-stable, in nature. In doing so, we can address a key risk to the public finances and thereby help ensure our country’s fiscal sustainability. The paper goes on to suggest that ring-fencing such windfall revenues in a forward-looking fund, such as a Resilience Fund or a re-launched version of the National Pension Reserve Fund, is one option to safeguard the future sustainability of the public finances.
In addition, in order to highlight this ongoing volatility risk, my Department will publish an estimate of the budgetary position excluding identified windfall receipts. This will be presented as a new indicator known as the GGB*, in Budget 2023.
In terms of reliance on foreign direct investment, it is very timely that the Department of Enterprise, Trade and Employment is currently reviewing our enterprise policy. The White Paper on Enterprise, due for completion in Q4 2022, will outline the strategic direction of Ireland’s enterprise policy in the context of challenges, opportunities and new drivers of growth.
113. Deputy Neale Richmond asked the Minister for Finance if he will report back from the informal Economic and Financial Affairs Council configuration in Prague; and if he will make a statement on the matter. [46249/22]
View answerI attended the scheduled Informal Meeting of Economic and Finance Ministers on the 9 and 10 September 2022 in Prague hosted by the Czech Presidency. The Presidency of the Council of the European Union rotates among member states every six months and each presidency hosts one of these informal meetings. Informal meetings are designed to allow participants discuss items of topical or potential interest with a view to possible orientation for future work.
I was accompanied to the event by the Governor of the Central Bank of Ireland who attended the Friday Working Session.
At the Ministerial lunch meeting we discussed Russia’s war of aggression against Ukraine and Ukraine’s ongoing financial needs. The discussion focused on the role of the EU and its contributions to Ukraine’s short and long-term financing needs. The discussion also encouraged international partners to continue providing support to Ukraine, so that macroeconomic stability is maintained and economic activity continues where possible.
During the first working session Ministers and Central Bank Governors also discussed Russia’s war of aggression against Ukraine and discussed the economic and financial consequences for Europe as well as measures aimed at mitigating the impact of the energy crisis and an exchange of views on possible coordination at the EU level. Ministers stressed the need for co-ordination, and the importance employing targeted, temporary, income measures where possible.
In Working Session II Ministers exchanged views on how to ensure long-term fiscal sustainability in the EU, as well as possible reform of the economic governance framework and the fiscal rules.
Finally, during Working Session III, Ministers discussed harmonisation in the area of direct taxation within the EU. This session looked at the framework for direct taxation within the EU in general and possible future development in the area of direct taxation within the EU.
114. Deputy Cormac Devlin asked the Minister for Finance the number of persons who have availed of remote working relief to date; and if he will make a statement on the matter. [46282/22]
View answerAs the Deputy will be aware, in the Finance Act 2021, I enhanced and formalised the tax arrangements for working from home in line with Government policy to facilitate and support remote working. Accordingly, for the tax year 2022, an income tax deduction amounting to 30% of the cost of vouched expenses for electricity, heat and broadband in respect of those days spent working from home can be claimed by taxpayers. The amount of the relief will depend on the particular circumstances of the remote worker in terms of the level of costs incurred and their marginal tax rate.
As of 19 September 2022, the volume of Remote Working Relief claims and their monetary value are as follows:
- For 2022 (year to date), 2,643 claims to the value of €1.1 million,
- For 2021, 69,280 claims to the value of €12.4 million,
- For 2020, 118,000 claims to the value of €19 million.
It should be noted, however, that these are unlikely to be the final figures for such claims, as taxpayers have up to four years to file their Income Tax Returns for a year and claim any additional expenses due.
Remote Working Relief claims can be made via Revenue’s MyAccount, for years up to and including 2022. If making a claim for 2022 during 2022, the taxpayer is required to upload a readable image of his or her receipt(s) to Revenue’s Receipts Tracker during the application as the amount claimed increases the taxpayer’s current year tax credits for which he or she will see a benefit in his or her next payroll payment.
Separately to the foregoing, where e-workers incur certain extra expenditure in the performance of their duties of employment remotely or from home, such as additional heating and electricity costs, there is a Revenue administrative practice in place that allows an employer to make payments up to €3.20 per day to such employees, subject to certain conditions, without deducting PAYE, PRSI, or USC.
However, I wish to advise the Deputy that the €3.20 daily allowance is a discretionary payment by an employer to his or her employees. No information is available about the numbers in receipt of such payments because this data is not captured in the information that employers report to Revenue.
115. Deputy Pearse Doherty asked the Minister for Finance if he will review and reform the advantageous tax regime enjoyed by IREFs and REITs following the sharp decline in taxes paid by institutional property investment funds and recommendations made by the Commission on Tax and Welfare. [46287/22]
View answerAn Irish Real Estate Fund (IREF) is an investment undertaking where 25% or more of the value of that undertaking is made up of Irish real estate assets. The regime was introduced to address concerns raised regarding the use of collective investment vehicles by non-residents to invest in Irish property. A Real Estate Investment Trust (REIT) is a quoted company, used as a collective investment vehicle to hold rental property. The function of the REIT framework is to facilitate collective investment in rental property by removing a double layer of taxation which would otherwise apply on property investment via a corporate vehicle.
I am aware that there has been a reduction in Withholding Tax (WHT) paid by IREFs in 2021, relative to the amount paid in the preceding year. My officials have requested that Revenue undertake a review to identify the reason for this change.
I am advised that the initial focus of the review is a detailed analysis of the information contained in the 2021 IREF Financial Statements, IREF Withholding Tax Returns and Form 1 (IREFs) Income Tax Returns. The review encompasses the consideration of various risk factors, a key focus is the identification of cases for compliance interventions to ensure perceived risks are properly and robustly addressed. The analysis involves detailed examination of tax returns and financial statements for a number of years and will include a review of the transactions undertaken by IREFs, and of distributions made, to ascertain if the distributions have been treated in accordance with the legislative provisions.
Where this work identifies possible non-compliance with the relevant legislation, Revenue will undertake appropriate compliance interventions. Should any deficiencies in the legislative provisions for IREFs be identified by this review, this will be brought to the attention of my Department and addressed.
I have noted the recommendation by the Commission on Taxation and Welfare that the Government undertake a review of REITs and IREFs, having regard to the role of institutional investment in the Irish property market.
The Commission’s recommendations are significant and wide ranging, and it is important to allow time for detailed consideration. It is my intention to provide an initial response to some of the recommendations as part of the upcoming budget. It would not be appropriate for me to speculate on what specific elements of the report we might act on in advance of that process concluding over the coming weeks.
116. Deputy James O'Connor asked the Minister for Finance the estimated revenue from corporation tax in the context of growing global inflation rates and economic difficulties; and if he will make a statement on the matter. [46333/22]
View answerSince 2015, the Exchequer has benefitted from a remarkable surge in corporation tax receipts. As of end-August, these receipts stood at nearly €12 billion, and my Department now expects that total corporation tax revenue this year will top €20 billion.
For comparison, a decade ago tax paid by the corporate sector amounted to approximately €4 billion.
Certainly, these receipts are, in many respects, welcome. But as the Deputy will know, I have frequently warned of the risks around corporation tax. These revenues are built on an extremely narrow tax base, with the top ten large corporate payers paying more than half of all receipts.
This means that our tax base is vulnerable to the business decisions of a small number of large, highly profitable firms. As such, these unreliable and potentially volatile receipts are not an appropriate basis for funding permanent expenditure commitments.
In the Summer Economic Statement last year, this Government set out its medium-term budgetary framework. The fundamental basis of this strategy is that growth in core public expenditure will be linked to the trend growth rate of the economy, irrespective of upside surprises on revenue. By decoupling expenditure from windfall revenue, this will mitigate much of the risk of corporation tax receipts being used to fund expenditure.
For this year only, in recognition of the cost of living challenge, Government has temporarily departed from the parameters set out in this strategy, but for future years we will return to the original strategy.
This approach strikes the right balance between providing assistance today and keeping our public finances on a sustainable trajectory.
Finally, earlier this month my Department published a paper examining vulnerabilities around corporation tax. Using a range of different methodologies, this analysis suggests that the amount of corporation tax receipts that could be unsustainable is in the region of €4 to €6 billion. As a result, the headline figures may look very positive but can mask very real vulnerabilities in our public finances.
In order to highlight this ongoing risk, Government will publish an alternative measure of the fiscal position, excluding estimates of windfall corporation tax receipts, as part of the Budget Day documentation next week.
118. Deputy Alan Farrell asked the Minister for Finance the estimated number of individuals who would benefit from a 30% income tax rate; and if he will make a statement on the matter. [46210/22]
View answer120. Deputy Alan Dillon asked the Minister for Finance the number of persons and the percentage of the workforce that pay income tax at the higher rate; and the number of full-time workers who would benefit from a 30% income tax rate. [46361/22]
View answerI propose to take Questions Nos. 118 and 120 together.
I am advised by Revenue that their estimates are based on taxpayer units, where taxpayers who are married or in a civil partnership who elect to be jointly assessed are counted as one taxpayer unit. These estimates encompass all taxpayer types, such as those in employment, self-employed, or in receipt of taxable income from other sources. Due to the nature of taxable income, which arises from multiple sources, it is not possible to allocate taxpayers to tax bands based solely on earned income. It is also not possible to estimate changes for full-time workers only, as Revenue does not hold information on hours worked.
An estimated allocation of taxpayer units into tax bands for 2023 is set out on page 2 of Revenue’s Ready Reckoner, which is published on the Revenue website at www.revenue.ie/en/corporate/documents/statistics/ready-reckoner.pdf.
All taxpayer units who are currently liable to income tax at the higher rate would benefit from a reduction in the higher rate, such as the introduction of an intermediate 3rd rate of tax. On the assumption that the standard rate income bands remain unchanged, the number of taxpayer units who would benefit from a 30% income tax rate is estimated to be 1.07 million (33% of taxpayer units) in 2023.
119. Deputy Pádraig O'Sullivan asked the Minister for Finance if the VAT rate of 9% for the tourism and hospitality sector will be extended beyond February 2023 in view of the cost-of-living crisis and the pressures facing businesses; and if he will make a statement on the matter. [46194/22]
View answer131. Deputy Christopher O'Sullivan asked the Minister for Finance his plans to extend the 9% VAT rate for the hospitality sector; and if he will make a statement on the matter. [46257/22]
View answerI propose to take Questions Nos. 119 and 131 together.
As the Deputy will be aware, it is a long-standing practice that the Minister for Finance does not comment, in advance of the Budget, on any tax matters that might be the subject of Budget decision.
121. Deputy Cathal Crowe asked the Minister for Finance his plans to introduce new personal taxation treatment to encourage stay at home parents to enter part-time employment in strategic areas (details supplied);; and if he will make a statement on the matter. [46101/22]
View answerWith regard to the Deputy’s proposal to introduce new personal taxation treatment to encourage stay at home parents to enter part-time employment in strategic areas, I understand the rationale behind the Deputy's question. At the same time, the sectors mentioned by the Deputy are not the only sectors that are currently facing recruitment challenges in what is fortunately a very buoyant labour market. As such, it would in my view be potentially inequitable to single out certain sectors for particular treatment through the personal tax system.
The Home Carer Tax Credit can be claimed by couples who are married or in a civil partnership and have elected to be jointly assessed to tax, where either spouse or civil partner, the ‘home carer’, cares for one or more dependent persons. For 2022, where the home carer earns less than €7,200 the full credit of €1,600 can be claimed. Where the individual earns more than €7,200 but less than €10,400, a reduced tax credit can be claimed. The credit cannot be claimed where the home carer’s income is €10,400 or greater. As such, the home carer can undertake part-time employment, subject to the above income thresholds, and continue to avail of the Home Carer Tax Credit.
This credit was introduced in the context of the move towards individualisation, in recognition of the choices made by families where one spouse stays at home to care for children or the elderly.
The Programme for Government states that “the Home Carer Tax Credit is an effective mechanism to support couples where one decides to home parent rather than working or availing of childcare subsidies and also where one parent stays at home to meet other caring needs. It will be increased to support stay-at-home parents as we increase subsidies for childcare”.
Finally, with less than a week to go to the Budget, it would be inappropriate for me to comment further on any matter that may or may not be the focus of budgetary decisions.
122. Deputy Brian Leddin asked the Minister for Finance his views on reforming motor vehicle taxation to improve energy efficiency of the car fleet in Ireland and uphold the tax revenue; and if he will make a statement on the matter. [46327/22]
View answerRecent Budgets have seen major changes to Motor Tax and VRT structures with the aim of incentivising the purchase of more efficient and 'greener' vehicles.
Budget 2021 saw the transition to the more accurate Worldwide Harmonized Light Vehicles Test Procedure (WLTP); and restructured the VRT and motor tax regimes with a view to strengthening their environmental rationale in line with Government commitments as set out in the Programme for Government and Climate Action Plan. The VRT rates were changed again in Budget 2022 to increase the fiscal gap between low emission vehicles and the rest, thus incentivising motorists in the market for a new car to make ‘greener choices’. The structure is based on the 'polluter pays' principles, with a reduced rate for battery electric vehicles (BEVs) of 7% of open-market selling price (OMSP), while vehicles falling into the highest emissions band are liable to a rate of 41%. Similarly, in motor tax, WLTP-tested vehicles are charged motor tax according to their emissions profile; the rate for BEVs is €120 and scales up to €2400 for the most pollutant vehicles.
Budget 2020 introduced a VRT surcharge on nitrogen oxide (NOx) emissions in recognition of the environmental health costs caused by pollutants emitted in particularly high quantities by diesel vehicles. Budget 2021 saw an adjustment to the NOx surcharge structure by increasing rates to incentivise the uptake of cleaner cars.
There are also a broad range of measures in support of Climate Action Plan commitments to increase the electrification of the fleet. This include a €5,000 VRT relief, SEAI purchase grant, low VRT and motor tax rates, and a €50,000 Benefit-in-Kind exemption for Battery Electric Vehicles.
I am satisfied that the current vehicle taxation regime is based on an environmental rationale which incentivises low emission vehicles and consequently provides strong disincentives for the most polluting ones. Officials from my Department keep vehicle taxes under review as part of the Tax Strategy Group process.
123. Deputy Brendan Smith asked the Minister for Finance the discussions he and his Department have had with the Central Bank in relation to the difficulties that have arisen for some customers of banks (details supplied) in opening new accounts with other financial institutions. [46295/22]
View answerI am in regular contact with the Central Bank of Ireland on a range of matters and my officials also meet regularly with the Central Bank to discuss the withdrawal of Ulster Bank and KBC from the Irish market.
The decisions of Ulster Bank and KBC to leave the Irish market are regrettable and my focus is on ensuring an orderly withdrawal and minimising the disruption to impacted consumers.
The Central Bank, as regulator, has been clear that it expects all retail banks, both those exiting the market and those remaining, to have plans in place to manage the impact of the broader changes and consolidation in the retail banking sector in Ireland.
As part of the Central Bank's supervisory engagement, it has met with the CEOs of the five main retail banks a number of times over the summer in relation to the large scale migration of customer accounts and outlined the need for better planning, customer focused arrangements, proactive communications and system wide engagement.
On 9 September 2022, the Central Bank released statistics on account migration, which indicate that 24% of the current and deposit accounts that were open at the beginning of the year in Ulster Bank and KBC Bank had been closed by end-August 2022. While the numbers are encouraging, I concur with the Central Bank, that the focus must continue to be on ensuring adequate resources and training are in place to ensure a positive customer experience when switching their accounts from KBC and Ulster Bank.
It is the responsibility of the individual banks to ensure that they are putting their customers first, ensuring fair treatment of customers and that customers understand what the changes mean for them.
In this regard, I want to welcome the round table discussion with direct debit originators and their regulatory authorities, hosted by the Banking and Payments Federation of Ireland (BPFI) yesterday, as well as Bank of Ireland's recent announcement that it will open 61 of its branches on the first four Saturdays in October to provide information on moving accounts and to support customers in the account opening process.
My officials and I will continue to monitor the migration of current accounts from the exiting banks and engage with relevant stakeholders, including the Central Bank, to ensure that impacted customers face the least amount of disruption in migrating their accounts over the coming months.
