Tuesday, 24 Jan 2023

Tax Yield

Questions (104)

Alan Dillon

Question:

104. Deputy Alan Dillon asked the Minister for Finance the industries that are the main contributors to income tax and corporation tax; the percentage of the 2022 tax receipts these industries accounted for; and if he will make a statement on the matter. [3057/23]

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Written answers

Minister for Finance

I am advised by Revenue that statistics on income tax and corporation receipts by sector are available on the Revenue website at:

revenue.ie/en/corporate/information-about-revenue/statistics/receipts/receipts-sector.aspx. These statistics are provided for the years 2013 to 2021 inclusive

Data is not yet available in respect of 2022, for reasons including that some of the tax return due dates have not yet passed. This data will be published on Revenue’s website when it becomes available.

Tax Code

Questions (105)

Christopher O'Sullivan

Question:

105. Deputy Christopher O'Sullivan asked the Minister for Finance if consideration will be given to reducing the excise duty on hydrotreated vegetable oil, in recognition of its use as a very low-emission fuel; and if he will make a statement on the matter. [3025/23]

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Written answers

Minister for Finance

Ireland’s taxation of fuel is governed by European Union law as set out in Directive 2003/96/EC, commonly known as the Energy Tax Directive (ETD). The ETD prescribes minimum tax rates for fuel with which all Member States must comply. ETD provisions on mineral oils are transposed into national law in Finance Act 1999 (as amended). Finance Act 1999 provides for the application of excise duty in the form of Mineral Oil Tax (MOT) to liquid fuels used for motor or heating purposes.

MOT is comprised of a non-carbon component and a carbon component with the carbon component being commonly referred to as carbon tax. The non-carbon component of MOT is often referred to as “excise”, “fuel excise”, “fuel tax” or “fuel duty” but it is important to note that both components are part of MOT which is an excise duty. Carbon tax rates are based on charging an amount per tonne of carbon dioxide emitted on combustion of the fuel concerned. Fuels with lower carbon dioxide emissions attract lower rates of carbon tax than fuels with relatively higher emissions.

As has been outlined in response to questions in recent weeks about biofuels such as Hydrogenated/Hydrotreated Vegetable Oil (HVO), the State’s MOT law - as governed by the ETD - relieves biofuels from the carbon component of MOT. This relief is provided for in section 100(5) of Finance Act 1999 which has been in place since 2012. Where a fuel meets the criteria of being produced entirely from biomass no carbon taxation currently applies.

MOT law specifies rates of taxation for certain fuels and uses. Standard rates apply to fuels used for propellant purposes including in road vehicles. Reduced rates apply to fuels used for all other purposes, such as heating. Full details on current MOT rates are published on the Revenue website at:

www.revenue.ie/en/tax-professionals/tdm/excise/excise-duty-rates/energy-excise-duty-rates.pdf

Where a liquid that is not specified in MOT law is used as a motor or heating fuel, “substitute fuel” rates apply. These are summarised in the table below, along with the effective rates applicable to biofuels that qualify for carbon tax relief.

Substitute fuel use	Excise Rate per 1,000 litres of Substitute Fuel
	Non-Carbon component of MOT	Carbon component of MOT	Total MOT(i.e. Non-Carbon plus Carbon)	Effective MOT if biofuel (i.e. Non-Carbon rate only)
Instead of petrol	€371.11	€112.23	€483.34	€371.11
Instead of auto-diesel	€295.64	€129.81	€425.45	€295.64
Non-propellant purposes such as heating	€00.00	€111.14	€111.14	€00.00

As the rates above indicate, biofuels such as HVO benefit from significantly lower MOT rates due to the carbon tax relief.

The MOT relief from carbon taxation for biofuels reflects a clear policy to incentivise the use of such fuels. As the ten-year trajectory of carbon tax increases introduced in Finance Act 2020 is implemented, the tax differential between biofuels and fossil fuels will continue to widen, further incentivising the uptake of biofuels.

Mortgage Interest Rates

Questions (106)

Matt Carthy

Question:

106. Deputy Matt Carthy asked the Minister for Finance the engagements he has had with the Central Bank regarding residential mortgage holders who were overcharged as a result of the tracker mortgage scandal and have had their mortgage contracts sold to third parties; and if he will make a statement on the matter. [3096/23]

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Written answers

Minister for Finance

Changes in the interest rate on a tracker mortgage are determined by any movement in the underlying rate being tracked, and in line with the terms and conditions of the mortgage contract, these changes are applied to tracker mortgages customers by their lenders. This approach applies to all tracker mortgage customers including those that have remained with the original lender that their tracker was drawn down with and customers whose tracker mortgages have been sold to a third party.

Where a loan is sold or transferred to another regulated entity, the protections that were available to borrowers prior to the transaction continue to be in place with the new owner. Under the Consumer Protection (Regulation of Credit Servicing Firms) Act 2018 if a loan is transferred or sold, the holder of the legal title to the credit must be authorised by the Central Bank and must comply with Irish financial services law that applies to ‘regulated financial service providers’.

This ensures that consumers whose loans are sold or transferred, maintain the same regulatory protections, including under the various Central Bank statutory Codes of Conduct, such as the Consumer Protection Code 2012 and the Code of Conduct on Mortgage Arrears 2013.

The Central Bank also advises that the protection of mortgage loan borrowers, including those in arrears, is a key priority and that it will continue to supervise compliance by regulated entities with the CCMA and will investigate any issues that arise, including patterns of behaviour which suggest that the CCMA process is not being followed.

I would also add that the Central Bank does keep its consumer protection framework under review and, as the Deputy will be aware, the Central Bank is currently undertaking a process to review its Consumer Protection Code and a discussion paper on this is now open for public consultation.

In relation to the tracker mortgage examination, the Central Bank's final report of the supervisory phase of the examination was published in July 2019. It outlined that over 40,000 customer accounts were impacted by lender failings and that almost €700 million of redress and compensation was paid to impacted borrowers. The Central Bank has also concluded enforcement actions and imposed fines on lenders for their tracker related failures which were BOI €100.5m; AIB/EBS €96.7m; Ulster Bank €37.8m; PTSB/Springboard €25.5m; KBC €18.3m.

The Central Bank has also informed me that it will now monitor developments in the Financial Services and Pensions Ombudsman (FSPO) and the courts in relation to the tracker issue to see if any further action is required by it arising from decisions which may be made in those for fora.

Mortgage Interest Rates

Questions (107)

Ged Nash

Question:

107. Deputy Ged Nash asked the Minister for Finance if he is concerned about the impact on households of the increased costs of servicing mortgages on homes as a result of rising interest rates; if he is considering any policy interventions to assist mortgage-holders; and if he will make a statement on the matter. [3087/23]

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Written answers

Minister for Finance

The formulation and implementation of monetary policy is an independent matter for the European Central Bank. The interest rate on the ECB’s main refinancing operations, which provides the bulk of liquidity to the banking system, is currently at 2.5%, an increase of 250 basis points since last summer.

In December 2022, the ECB Governing Council indicated that interest rates will still have to rise significantly at a steady pace to reach levels that are sufficiently restrictive to ensure a timely return of inflation to the 2% medium-term target.

Any decision to change official interest rates – and the timing of any such decision – is solely a matter for the ECB. In addition any decisions taken by mortgage lenders in relation to passing on interest rate increases are a matter for those lenders which are run on an independent commercial basis. Neither the Central Bank nor I as Minister for Finance have any function or role in such decision making matters by credit institutions.

However, there is a comprehensive consumer protection framework in place related to mortgages and mortgage lending in Ireland that has been introduced and enhanced in recent years. For example, the Central Bank Code of Conduct on Mortgage Arrears (CCMA), seeks to ensure that Central Bank regulated entities are transparent and fair in all their dealings with borrowers and that borrowers are protected from the beginning to the end of the mortgage life cycle, for example, through protections at the initial marketing/advertising stage, in assessing the affordability and suitability of the mortgage and at a time when borrowers may find themselves in financial difficulties.

In addition, the Central Bank introduced a number of increased protections for variable rate mortgage holders in February 2017. The enhanced measures, which are provided for in an Addendum to the Consumer Protection Code 2012 (the Code) require lenders to explain to borrowers how their variable interest rates have been set, including in the event of an increase.

The measures also improve the level of information required to be provided to borrowers on variable rates annually about other mortgage products available from their lender which could provide savings for the borrower. The lender must also signpost the borrower to the CCPC’s mortgage switching tool.

An important example is the requirements put in place by the Central Bank complement the European legislative framework, including the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 which requires, for example, to include the interest rate in pre-contractual information provided to consumers.

These are important regulatory provisions and I believe will be of benefit to mortgage holders in the current interest rate environment.

In relation to policy interventions to assist mortgage-holders, Mortgage Interest Relief (MIR) was phased out on a gradual basis over the period 2009 to 2020. The decision to abolish MIR was taken in the wake of the financial crisis with the cost of the relief being one of the influencing factors. MIR cost over €700 million in 2008. It should be noted that prior to its curtailment and eventual abolition, in 2005, the top two income deciles accounted to close to half of the tax forgone through the measure.

However, is also worth noting that the total size of Budget 2023 was €11 billion, and it contained many measures to assist families with the increased cost of living including:

- a €12 increase in weekly social welfare rates for pensioners and people of working age;

- an increase of €40 in the Working Family Payment threshold;

- increased eligibility for the fuel allowance;

- the abolition of inpatient hospital charges;

- the provision of GP visit cards to those on or below the median income;

- the introduction of a free books scheme for primary school pupils;

- an income tax package of €1.1 billion that included a number of measures such as an increase in the standard rate cut off point, an increase in the main tax credits and the introduction of a rental tax credit.

This substantial cost of living package which included a large range of one-off measures will assist households with cost of living pressures.

Business Supports

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Written answers

Minister for Finance

I propose to take Questions Nos. 108, 117, 118, 124, 128, 130 and 143 together.

The Temporary Business Energy Support Scheme (TBESS) was introduced to support qualifying businesses with increases in their electricity or natural gas costs over the winter months.

Sections 100 to 102 of the Finance Act 2022 make provision for the TBESS. The scheme provides support to qualifying businesses in respect of energy costs relating to the period from 1 September 2022 to 28 February 2023. The TBESS is available to eligible tax compliant businesses carrying on a trade or profession, the profits of which are chargeable to tax under Case I or Case II of Schedule D.

Qualifying businesses can claim for 40% of the increases in their energy bills between the ‘claim period’, September 2022 to February 2023 and the ‘reference period’, the corresponding calendar month in the previous year. Payments are generally subject to a monthly cap of €10,000 per trade or profession. Businesses which are eligible for TBESS can register for the scheme via Revenue’s online service and comprehensive guidelines on the operation of the scheme are available on the Revenue website.

I am advised by Revenue of the following registrations and claims by county.

County	All Applications	Approved Registrations	Value of Approved Claims
Carlow	179	177	€246,869
Cavan	247	239	€288,170
Clare	338	329	€445,847
Cork	1,624	1,591	€1,769,841
Donegal	486	480	€618,030
Dublin	2,941	2,869	€3,917,659
Galway	804	784	€800,288
Kerry	532	516	€660,106
Kildare	476	466	€503,351
Kilkenny	306	294	€257,051
Laois	176	173	€193,600
Leitrim	125	124	€84,953
Limerick	574	562	€589,309
Longford	148	146	€114,108
Louth	389	380	€464,029
Mayo	441	431	€543,688
Meath	503	497	€653,171
Monaghan	223	219	€301,547
Offaly	221	216	€199,788
Roscommon	169	164	€195,799
Sligo	203	194	€266,030
Tipperary	498	487	€473,885
Waterford	388	376	€362,935
Westmeath	344	337	€280,950
Wexford	483	471	€600,293
Wicklow	336	327	€322,880

I am advised by Revenue that applications received from businesses are reviewed to determine eligibility and this accounts for the variance in the figures for ‘all applications’ and ‘approved registrations’. In addition, Revenue is publishing detailed statistical reports in relation to the TBESS which are updated on a weekly basis. These reports are available on Revenue’s website.

Question No. 109 answered with Question No. 95.

Question No. 110 answered with Question No. 68.

Banking Sector

Questions (111, 136)

Louise O'Reilly

Question:

111. Deputy Louise O'Reilly asked the Minister for Finance his plans with regards to banking remuneration policy; his position with respect to the recommendation of the finance committee in its report on banking that the current restrictions on banking remuneration should remain in place; and if he will make a statement on the matter. [3102/23]

View answer

Pearse Doherty

Question:

136. Deputy Pearse Doherty asked the Minister for Finance his views on banking remuneration policy; if he agrees with the recommendation of the Oireachtas finance committee in its report on banking that the current restrictions on banking remuneration, including the €500,000 cap on annual pay, should remain in place; and if he will make a statement on the matter. [3147/23]

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Written answers

Minister for Finance

I propose to take Questions Nos. 111 and 136 together.

Government policy on banking remuneration had remained unchanged since the financial crisis, which was over a decade ago. Extensive restrictions were in place and they affected c. 20,000 workers across the three banks in which the State has/had a shareholding, from the most junior staff to the most senior ranks as variable pay, including bonuses and many other benefits, could not be paid. These restrictions created recruitment and retention problems for AIB, Bank of Ireland and Permanent TSB.

The skill set required in the banking sector is evolving with the greatest demand for staff now in areas such as IT, cyber, risk management, legal and compliance. These skills are in demand right across the economy and so the banks are competing for this talent against companies who have more flexible and attractive remuneration structures.

In the case of Bank of Ireland, the State is no longer a shareholder in the bank but the remuneration restrictions remained in effect. Bank of Ireland repaid all its State aid some time ago and the taxpayer has recovered more money from its support for the bank than it invested. The remuneration restrictions were anti-competitive and unsustainable in an environment where the State no longer has a shareholding in the bank. Therefore, in November 2022, all contractual pay restrictions at Bank of Ireland were removed by the Minister for Finance, with the exception of variable pay awards above €20,000 per annum.

The State continues to be majority shareholder in AIB (c. 57%) and Permanent TSB (c. 62%). While restrictions around variable pay up to €20,000 and fringe benefits have also been removed for AIB and PTSB, both banks will continue to abide by the total compensation cap of €500,000 per annum that is currently in place. This additional restriction relative to Bank of Ireland will remain in place but will be reviewed at the appropriate time, which has yet to be decided upon and ultimately will be a matter for the Government.

It continues to be this Government’s belief that banking in the main is an activity that should be provided by the private sector and that taxpayer funds which were used to rescue the banks should be recovered and used for more productive purposes.

Tax Credits

Questions (112, 227)

Paul McAuliffe

Question:

112. Deputy Paul McAuliffe asked the Minister for Finance if he will provide an update on the rental tax credit; the number of persons who are currently availing of it; and if he will make a statement on the matter. [3055/23]

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Ivana Bacik

Question:

227. Deputy Ivana Bacik asked the Minister for Finance if he will report on the number of renters who have claimed the renter's credit to date. [2746/23]

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Written answers

Minister for Finance

I propose to take Questions Nos. 112 and 227 together.

The rent tax credit, as provided for in section 473B of the Taxes Consolidation Act 1997 (TCA 1997), was introduced by Finance Act 2022 and will be available in respect of qualifying payments made during the 2022 to 2025 years of assessment inclusive. I am advised by Revenue that up to 23 January 2023, over 78,400 claims for the rent tax credit in respect of the 2022 year of assessment have been made. These claims have been made by PAYE taxpayers by submitting an Income Tax return for the 2022 year of assessment through Revenue’s online facility myAccount.

Self-assessed taxpayers will be able to claim the rent tax credit for the 2022 year of assessment by submitting his or her Income Tax Return through the Revenue Online Service (ROS) from 24 January 2023. The statutory filing date for the 2022 tax return for self-assessed taxpayers is 31 October 2023. For claims relating to the 2023 year of assessment, those in receipt of income which is subject to tax under the PAYE system will be able to claim the rent tax credit due to them in-year, from mid-February 2023 onwards, or by way of an end of year claim included in his or her Income Tax return for 2023.

Inflation Rate

Questions (113)

Peadar Tóibín

Question:

113. Deputy Peadar Tóibín asked the Minister for Finance if his attention has been drawn to a prediction by the Governor of the Central Bank that inflation rates will continue to rise; and if he will make a statement on the matter. [56213/22]

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Written answers

Minister for Finance

Consumer price (HICP) inflation picked up sharply over the past year, with annual average inflation of just over 8 per cent recorded in 2022, compared with around ½ per cent over the past decade. Every advanced economy is in the same position, with euro area inflation averaging 8.4 per cent last year.

As highlighted in their latest Quarterly Bulletin in October, the Central Bank forecast an easing of headline inflation from the fourth quarter of 2022, broadly consistent with the Department’s perspective at the time of Budget 2023 in September.

Since then inflation has remained elevated, at 8.2 per cent in December, but has moderated relative to the peak of 9.6 per cent reached last summer, and 9.4 as recently as October. This faster than anticipated easing of the inflation rate is explained largely by movements in wholesale energy prices. Following a surge in prices over the summer and early autumn, gas prices have moderated in recent months. This primarily reflects the milder winter, high European gas storage levels and sufficient LNG supplies with market prices now at around £1.70 per therm, compared with £4 per therm at Budget time. Oil prices have also declined due to the slowdown in global demand.

This easing in wholesale energy markets suggests that inflation has now peaked and is on a downward trajectory. That said, the inflation rate is expected to remain high over the coming months, with a more pronounced easing of the inflation rate anticipated from the second quarter of this year as ‘base effects’ drop out of the annual rate. Despite this, the price level consumers face will remain elevated. Furthermore, due to continued energy supply concerns there remains significant uncertainty around the outlook for inflation.

To prevent inflationary pressures becoming entrenched, central banks across advanced economies have tightened monetary policy, with the ECB raising interest rates by a cumulative 2½ percentage points since last July - the fastest pace of tightening in the history of the single currency. As Minister for Finance, monetary policy is not a part of my remit and it would be inappropriate for me to comment or speculate on the setting of Eurozone interest rates.

My Department will continue to monitor incoming economic developments closely and will publish updated inflation forecasts in the Stability Programme Update in April.

Tax Code

Questions (114)

Richard Boyd Barrett

Question:

114. Deputy Richard Boyd Barrett asked the Minister for Finance if his attention has been drawn to reports that leading global tax researchers from the University of California, Berkeley and the University of Copenhagen (details supplied) have identified Ireland as a major tax haven and estimate that Ireland artificially attracts €130 billion in profits from other countries and gains €7.2 billion in tax revenue from this profit shifting; and if he will make a statement on the matter. [3109/23]

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Written answers

Minister for Finance

I understand that the Deputy is referring to a report "The Missing Profits of Nations" that examines attribution of profits by multinational enterprises (MNEs) around the world.

The central analysis of the paper looks at links between the level of profit booked, and the level of wages paid in a country. This creates a misleading impression that corporate profits are or should be directly linked to wage levels rather than to the outputs of investment in all income generating activities such as investment in R&D, intangible assets, capital intensive machinery and investment in staff etc. A small country with high levels of high value adding FDI relative to the size of the domestic economy will of course appear like an outlier in this type of analysis.

Ireland has a competitive corporation tax rate, an attractive and stable tax regime and a strong reputation and commitment to transparency. Ireland’s tax regime is designed to encourage the location of real, substantive and high-value adding investment in the country. This is evidenced by the substantial number of NMEs who have chosen Ireland as their home and the hundreds of thousands of both direct and indirect jobs they contribute to the economy.

Ireland is a strong supporter of the BEPS process and has fully implemented both Anti-Tax Avoidance Directives within all agreed timeframes. Furthermore, Ireland fully supports the two pillared solution to address the challenges brought about by the digitalisation of the economy.

Having recently agreed to the EU Minimum Tax Directive that ensures the MNEs will pay a minimum effective tax rate of 15% it is my intention to bring forward legislation in this years Finance Bill which will transpose Directive into domestic legislation.

Question No. 115 answered with Question No. 76.

Tax Reliefs

Questions (116, 145)

Paul McAuliffe

Question:

116. Deputy Paul McAuliffe asked the Minister for Finance the number of persons who received assistance under the help-to-buy scheme in 2022; and if he will make a statement on the matter. [3056/23]

View answer

Peter Fitzpatrick

Question:

145. Deputy Peter Fitzpatrick asked the Minister for Finance the number of persons that claimed the help-to-buy scheme since its inception to purchase a home; the value of these claims, broken down by county; and if he will make a statement on the matter. [2935/23]

View answer

Written answers

Minister for Finance

I propose to take Questions Nos. 116 and 145 together.

The Help to Buy (HTB) incentive is a scheme to assist first-time purchasers with the deposit they need to buy or build a new house or apartment. The incentive gives a refund of Income Tax and Deposit Interest Retention Tax (DIRT) paid in the State over the previous four years, subject to limits outlined in the legislation. The incentive is accessed via an online-only application process which has been available since 3rd January 2017, currently covering the period 19 July 2016 to 31 December 2024.

In respect of Deputy McAuliffe's question, I am advised by Revenue that in 2022, 17,596 Help to Buy applications were approved, which resulted in 5,109 fully verified claims and an additional 188 await verification by the developer/solicitor in order to release rebate funds. Of this total of 5,297 claims, 82% relate to PAYE taxpayers, 5% relate to Self-Assessed taxpayers and 13% are a combination of both. Some €175 million was paid out in 2022 in approved HTB applications, of which 73% were new properties bought from developers and 27% were self builds.

In response to Deputy Fitzpatrick's question, Revenue have advised that 37,300 claims for the Help to Buy scheme have been approved to date since inception, with the number of applicants associated with these claims totalling 68,600. The value of the approved claims broken down by county is outlined in the table below.

County	€m
Carlow	6.4
Cavan	6.3
Clare	11.8
Cork	100.6
Donegal	10.1
Dublin	174.1
Galway	35.5
Kerry	8.7
Kildare	97.8
Kilkenny	11
Laois	14
Leitrim	1.8
Limerick	22.6
Longford	2.5
Louth	25.2
Mayo	13.6
Meath	82.9
Monaghan	7
Offaly	10.3
Roscommon	6.1
Sligo	5.2
Tipperary	11.1
Waterford	15.9
Westmeath	9.6
Wexford	20.6
Wicklow	31.8
Total	742.5

The Deputies may wish to note that further statistical information in relation to the Help to Buy scheme is available on the Revenue website at:

www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/index.aspx

Question No. 117 answered with Question No. 108.

Question No. 118 answered with Question No. 108.

Tax Yield

Questions (119)

Cathal Crowe

Question:

119. Deputy Cathal Crowe asked the Minister for Finance his expectations for corporation tax revenues in 2023; and if he will make a statement on the matter. [2991/23]

View answer

Written answers

Minister for Finance

At the time of Budget 2023, corporation tax this year was estimated to reach €22.7 billion.

While corporation tax receipts last year were higher than anticipated, much of this performance is considered to be once-off in nature and is not expected to be repeated this year.

My Department estimates that around €10 billion in corporation tax is excess or windfall in nature and could be at risk. If these receipts are excluded, there is a very large underlying deficit in the public finances, estimated at around €5¼ billion for last year.

It is also worth highlighting that corporation tax receipts are highly concentrated, with just ten large firms paying well over half of all corporation tax receipts. This means that these receipts are vulnerable to the business decisions of a small number of multinational companies.

My Department has regularly warned that the large increase in corporation tax is not a suitable basis for permanent expenditure commitments. On this basis, Government is actively mitigating the exposure of our public finances to this volatile revenue stream: last year, €2 billion in windfall corporation tax receipts were transferred to the National Reserve Fund, with a further €4 billion transfer to follow this year.

Economic Data

Questions (120)

Peadar Tóibín

Question:

120. Deputy Peadar Tóibín asked the Minister for Finance if his attention has been drawn to the reduction in the growth of activity and new business within the Irish economy in November, which is the lowest in 21 months; and if he will make a statement on the matter. [61738/22]

View answer

Written answers

Minister for Finance

The Russian invasion of Ukraine and the resultant restriction of gas supplies triggered an exceptionally large energy price shock which reverberated throughout the globe, with Europe at its epicentre.

With the global energy markets in flux, almost every advanced economy has had to grapple with the effects of multi-decade high inflation over the past year. In Ireland, consumer price inflation averaged 8.1 per cent over the course of 2022.

Over recent months, a number of high frequency indicators have highlighted the real impact of rising price pressures on both consumers and businesses. The latest Purchasing Manger’s Service Index (PMI) release from December suggests that momentum in the services sector moderated toward the back end of last year as upward pressure on input prices continued to weigh on business activity, though the release showed that activity overall was still up on the previous month.

Wholesale gas markets have begun to ease significantly over recent months. Whilst the inflation rate remains elevated at 8.2 per cent in December, the rate has begun to moderate and now appears to have passed its peak and is on a downward trajectory. That said, the rate of inflation is still expected to remain high.

Against this backdrop, growth prospects for this year remain subdued in the short-term. My Department expects the domestic economy to effectively move sideways over the coming months, before returning to modest growth in the second half of the year. For the year as a whole, my Department forecasts growth in modified domestic demand - a measure of the domestic economy - of just 1¼ per cent. These forecasts will be updated in the Stability Programme Update in the spring.

Despite the numerous headwinds facing the domestic economy the labour market remains remarkably resilient, with well over 2½ million people in employment in the third quarter and an unemployment rate of just 4.3 per cent in December 2022.

Given the high degree of uncertainty at present, the risks to the outlook remain considerable. My Department continues to closely monitor macroeconomic developments and will publish updated macroeconomic projections as part of the Stability Programme Update in April.

Tax Reliefs

Questions (121, 241)

Catherine Connolly

Question:

121. Deputy Catherine Connolly asked the Minister for Finance further to Parliamentary Question No. 126 of 10 November 2022, his plans for the phasing out of the help-to-buy-scheme; the timeline for same; and if he will make a statement on the matter. [3091/23]

View answer

Catherine Connolly

Question:

241. Deputy Catherine Connolly asked the Minister for Finance the status of the implementation of the recommendations of a report (details supplied); and if he will make a statement on the matter. [3133/23]

View answer

Written answers

Minister for Finance

I propose to take Questions Nos. 121 and 241 together.

As indicated in my predecessor's Budget 2023 address to the House on 27 September 2022, the Help to Buy scheme has been a significant support for first time buyers of new homes. Since its inception in 2017, over 36,000 first-time buyers, either singly or as part of a couple, have benefited from the scheme. To reiterate the response to Parliamentary Question No. 126 of 10 November 2022, it remains the case that, as with any tax expenditure, the scheme will be kept under review and that there are a number of recommendations within the recent Mazars report on the scheme which the Government will consider for future budgets. In the meantime, however, the Government has decided to continue the scheme, at current rates, until the end of 2024 and this has been legislated for in the Finance Act 2022. The future of the measure beyond end-2024 will be considered in due course.

Question No. 122 answered with Question No. 100.

Mortgage Interest Rates

Questions (123)

Pearse Doherty

Question:

123. Deputy Pearse Doherty asked the Minister for Finance if he has engaged or will engage with the Central Bank regarding residential mortgage holders who were victims of the tracker mortgage scandal, have had their mortgage contracts sold to third parties or funds and are now subject to significant mortgage interest rate increases; and if he will make a statement on the matter. [3146/23]

View answer

Written answers

Minister for Finance

Changes in the interest rate on a tracker mortgage are determined by any movement in the underlying rate being tracked, and in line with the terms and conditions of the mortgage contract, these changes are applied to tracker mortgages customers by their lenders. This approach applies to all tracker mortgage customers including those that have remained with the original lender that their tracker was drawn down with and customers whose tracker mortgages have been sold to a third party.

Where a loan is sold or transferred to another regulated entity, the protections that were available to borrowers prior to the transaction continue to be in place with the new owner. Under the Consumer Protection (Regulation of Credit Servicing Firms) Act 2018 if a loan is transferred or sold, the holder of the legal title to the credit must be authorised by the Central Bank and must comply with Irish financial services law that applies to ‘regulated financial service providers’.

This ensures that consumers whose loans are sold or transferred maintain the same regulatory protections, including under the various Central Bank statutory Codes of Conduct, such as the Consumer Protection Code 2012 and the Code of Conduct on Mortgage Arrears 2013.

I would add that the Central Bank has informed me that it has engaged with lenders to ensure the operational capacity is in place to facilitate people to switch at a system wide level.

In relation to the tracker mortgage examination, the Central Bank's final report of the supervisory phase of the examination was published in July 2019. It outlined that over 40,000 customer accounts were impacted by lender failings and that almost €700 million of redress and compensation was paid to impacted borrowers. The Central Bank has also concluded enforcement actions and imposed fines on lenders for their tracker related failures which were BOI €100.5m; AIB/EBS €96.7m; Ulster Bank €37.8m; PTSB/Springboard €25.5m; KBC €18.3m.

I have been informed by the Central Bank that it will now monitor developments in the Financial Services and Pensions Ombudsman (FSPO) and the courts in relation to the tracker issue to see if any further action is required by it arising from decisions which may be made in those for fora.