Written Answers Nos. 175-194
175. Deputy Neasa Hourigan asked the Minister for Finance if his Department, as part of developing budgetary proposals, has examined the potential of introducing a one-off corporate windfall tax or a wealth tax, as recommended by a report (details supplied); and if he will make a statement on the matter. [40470/23]
View answerI am aware that Oxfam International released a report in January 2023 regarding global wealth inequality entitled “Survival of the Richest” which proposes new wealth taxes in Ireland and in other jurisdictions.
While I understand the background to calls for a specific wealth tax in Ireland, it is not the case that wealth in Ireland is untaxed, as taxes on wealth are already in place here.
The Government is committed to creating a fairer, more equal Ireland. While the calls for a specific wealth tax are often made, there are already a number of wealth taxes in place including Capital Gains Tax, Capital Acquisitions Tax and Local Property Tax. Revenue estimates that these taxes raised over €2.8 billion last year.
The Oxfam report notes that “Two-thirds of countries do not have any form of inheritance tax on wealth and assets passed to direct descendants.” I would remind the Deputy that Ireland has a significant inheritance tax regime in place in the form of Capital Acquisitions Tax which is charged (with limited exemptions) at a rate of 33%.
Oxfam's report also notes that “Rates of tax on capital gains – in most countries the most important source of income for the top 1% – are only 18% on average across more than 100 countries.” I would again remind the Deputy that Capital Gains Tax is in place in Ireland and it is charged, again with limited exemptions, at a rate of 33% which is well above the 18% average reported by Oxfam.
Any revenue raised from a new wealth tax may not therefore be additional to the existing forms of wealth taxation, as revenues from those taxes could be affected by the introduction of such a new tax.
In addition to wealth taxes, the Government takes action against inequality through our tax and welfare system. For instance, the strong redistributive role of the Irish tax and welfare system is evident in the range of supports introduced to help mitigate the impact of the Covid-19 pandemic and the current cost of living pressures on vulnerable households and businesses. The overall distributional impact of Budget 2023 was strongly progressive, with the lowest three deciles experiencing the highest gains as a proportion of disposable income.
Ireland has one of the most progressive systems of taxes and social transfers of any EU or OECD country, which contributes to the redistribution of income and to the reduction of income inequality.
It is estimated that the top 1 per cent of income earners here, that is those earning in excess of €263,000, will pay 23 per cent of the total income tax and USC collected in 2023, while those earning less than €65,000, which represents 80 per cent of income earners, will contribute only 21 per cent of total income tax and USC receipts.
In relation to the Deputy’s reference to a one-off corporate windfall tax, as a small open economy, connected to Europe, the US and the wider world, Ireland has been and is committed to a competitive, transparent and stable corporation tax system. As the Deputy will be aware, the trading profits of companies in Ireland are generally taxed at the standard corporation tax rate of 12.5%. Ireland’s corporate tax regime has been built on certainty and predictability, and the 12.5% corporation tax rate on trading income has been a cornerstone of that regime for over 20 years. This stability has enabled companies to plan long-term investments in Ireland, generating employment and increasing economic activity.
The Deputy will be aware that Ireland, along with almost 140 other countries in the OECD/G20 Inclusive Framework, signed up to the two-pillar agreement on international corporate tax in October 2021. Pillar Two of the agreement will see the adoption of a global minimum effective tax rate of 15% applying to large corporate groups with global revenues in excess of €750m.
Pillar Two will be implemented in Ireland largely via the EU Minimum Tax Directive (Council Directive (EU) 2022/2523), and work is now well advanced to transpose the EU Minimum Tax Directive in October’s Finance Bill this autumn.
In conclusion, I can assure the Deputy that all potential taxation options are kept under consideration and it remains a priority of mine to ensure that Ireland maintains its progressive taxation system and continues to support substantial investment and economic activity in the State.
176. Deputy Neasa Hourigan asked the Minister for Finance if his Department, as part of developing budgetary proposals, has examined the potential introduction of a tax credit for trade union fees; and if he will make a statement on the matter. [40471/23]
View answerTax relief for trade union subscriptions was previously provided for under section 472C of the Taxes Consolidation Act 1997. The relief was introduced in 2001 and abolished from 2011 onward.
A review of the appropriate treatment for tax purposes of trade union subscriptions and professional body fees was carried out by the Department of Finance in 2016 and included in the 2016 report on tax expenditures published on Budget day 2016. The review may be found at the following link: assets.gov.ie/181475/91f597c2-bd98-41d8-998e-19f14c099eea.pdf
The review concluded that:
"... analysis of the scheme using the principles laid down by the Department’s Tax Expenditure Guidelines shows that it fails to reach the evaluation threshold to warrant introduction in this manner.
The reinstatement of this tax relief would have no justifiable policy rationale and does not express a defined policy objective. Given that individuals join trade unions largely for the well-known benefits of membership, and the potential value of the relief to an individual would equate to just over €1 per week, this scheme would have little to no incentive effect on the numbers choosing to join. There is no specific market failure that needs to be addressed by such a scheme, and it would consist largely of deadweight ."
In 2020, the Department of Finance carried out a further analysis which took stock of where matters stand in relation to the issue of tax relief for trade union subscriptions and set out a number of policy options for consideration. This exercise suggested that, based on certain assumptions about numbers of beneficiaries, the measure could cost at least €36.9 million if reintroduced at the same level of support as existed in 2010. However, it also drew attention to the potentially significant dead weight element which would accompany the measure. That analysis was published with the 2020 Tax Strategy Group papers at: assets.gov.ie/86995/006fad3c-ebb5-4b0e-b067-92f8102d6e43.pdf
In relation to the question of the potential introduction of a tax credit for trade union fees, it is a longstanding practice of the Minister for Finance not to comment, in advance of the Budget, on any matters that might be the subject of Budget decisions. I would add that any such decisions must have regard to the sound management of the public finances and my Department's Tax Expenditure Guidelines.
178. Deputy Claire Kerrane asked the Minister for Finance what mechanisms are being put in place to support farmers with having land that is actively being used for agricultural purposes and cannot be used for residential purposes, excluded from RZLT zoning; and if he will make a statement on the matter. [40636/23]
View answerThe Residential Zoned Land Tax (RZLT) is a new tax introduced in Finance Act 2021 which seeks to increase housing supply by encouraging the activation of development on lands which are suitably zoned and appropriately serviced. It aims to bring those lands which have benefitted from investment in services and are capable of being developed forward for housing. The tax is an action contained in Housing for All, the Government’s plan for housing, to increase housing supply and is supported in the Programme for Government.
The tax applies to land that is:
• zoned suitable for residential development whether it be solely or primarily for residential use, or for a mixture of uses, including residential use, and
• serviced (that is: reasonable to consider may have access, or be connected, to public infrastructure and facilities, including roads and footpaths, public lighting, foul sewer drainage, surface water drainage and water supply, necessary for dwellings to be developed and with sufficient service capacity available for such development)
In order to be liable for the tax the land must meet both criteria above.
Each local authority in the State was responsible for the preparation of an RZLT map for their functional area. The local authority, in preparing the draft RZLT maps, determined whether the zoned land is connected or able to connect to the six required categories of services. Any exclusions which would rule the land out of scope were applied. The local authority then published a draft RZLT map identifying the land which meets the requirements of the legislation and which may be liable to the tax. The tax will first be due and payable in 2024.
It is important to note that, to come within the scope of RZLT, farmland must be both zoned for residential use and serviced. Farmland that is zoned for residential use, but which is not currently serviced, is not within the scope of the tax and will only come within the scope of the tax should the land become serviced at some point in the future.
Agricultural land which is zoned solely or primarily for residential use meets the criteria set out within the legislation and therefore falls within the scope of the tax. Agricultural land that is zoned for a mixture of uses including residential is not in scope. These zonings are considered to reflect the housing need set out within the core strategy for the relevant local authority area and landowners within such zonings may fall within the scope of the tax, in the interests of ensuring an appropriate supply of housing on zoned lands.
A landowner with land identified on any published draft map had the opportunity to make a submission to the local authority regarding the land, setting out why they consider that the land does not meet the criteria for inclusion within the scope of the tax. For example, if the land is not zoned for residential use, if the land does not have access to or there is no capacity for any of the six servicing criteria, or if the land benefits from an exclusion as outlined in the legislation. The local authority was required to assess any submission and inform the landowner of their decision to either remove or retain the land on the map by 1 April 2023. If dissatisfied with the local authority decision, the landowner could have appealed the determination to An Bord Pleanála, again setting out why the land does not meet the criteria for inclusion for the tax.
In addition to being able to make a submission regarding inclusion of land on a draft map, the landowner had the opportunity to submit a request to change the zoning of the land by variation of the adopted development plan. Where the zoning is amended to a use other than residential or mixed use including residential, it would not meet the criteria for the tax and would be removed from RZLT maps. Decisions on whether to amend zonings as a result of submissions or at any other time are a matter for the local authority, taking into account the need to ensure that housing supply targets across the county can be met. It is also worth noting that provision is made in the Planning and Development Act 2000 for elected members to seek a report from their Chief Executive on the matter of proposed re-zonings.
Furthermore, Finance Bill 2022 introduced an exemption for land that is within the scope of the tax but is subject to a contract that precludes the landowner from developing it. For the exemption to apply, the contract must have been entered into prior to 1 January 2022, i.e., prior to the introduction of RZLT. For example, where a farmer leased land prior to 1 January 2022 and the requisite conditions are met, the farmer may claim an exemption from the tax for the period of the lease.
It is acknowledged that the tax will impact on landowners, however if the land in question is zoned for a particular purpose under a plan adopted by the local authority and has been subject to investment by the local authority and the State in the services necessary to enable development for housing to accommodate increased population, it is intended that the land should be used for housing. This tax measure is a key pillar of the Government’s response to address the urgent need to increase housing supply in suitable locations.
Officials from Department of Finance and Department of Housing, Local Government and Heritage continue to engage with various representative bodies, including those representing the agricultural sector, in relation to the RZLT measure.
179. Deputy Kathleen Funchion asked the Minister for Finance if consideration will be given to waving VRT liability for adult disability services that specially adapt vehicles (not wheelchair adaption) for users with mobility issues; and if he will make a statement on the matter. [40638/23]
View answer180. Deputy Kathleen Funchion asked the Minister for Finance if consideration will be given to waving the VRT liability for an adult disability service (details supplied) that has had two vehicles specially adapted (not wheelchair adaption) for users with mobility issues, to include handrails, removal of seats for comfort of service users; and if he will make a statement on the matter. [40639/23]
View answerI propose to take Questions Nos. 179 and 180 together.
The Disabled Drivers and Disabled Passengers (Tax Concessions) Scheme (DDS) is legislated for under Statutory Instrument No. 353 of 1994(SI.353/1994) and provides relief from Vehicle Registration Tax and VAT on the use of an adapted vehicle, as well as an exemption from motor tax and an annual fuel grant.
I am advised by Revenue that Regulation 12[1A] of SI.353/1994 outlines certain criteria for a qualifying organisation’s vehicle(s) to be registered on the scheme. Specifically, the vehicle(s) must have either; a modified rear or side entry incorporating an integrated ramp or lift and a modified floor to facilitate direct wheelchair access, and wheelchair restraints or a wheelchair docking system or; a modified rear or side entry incorporating a lowered and modified floor to facilitate direct wheelchair access, and wheelchair restraints or a wheelchair docking system.
Given the information provided it would appear that the vehicles concerned are not specifically adapted in line with the regulations and therefore do not qualify for relief from VRT and VAT under this scheme. Notwithstanding, Revenue will make contact with the organisation concerned to clarify the matter in the coming days.
Further information in respect of this scheme is available on Revenue’s website: www.revenue.ie/en/vrt/reliefs-and-exemptions/scheme-for-persons-with-disabilities.aspx .
In respect to a general waiver of VRT liability for adult disability services that specially adapt vehicles, the Deputy should be aware of the final report of the NDIS Transport Working Group's review of mobility and transport supports including the Disabled Drivers and Disabled Passengers Scheme (DDS). The report endorsed proposals for a modern, fit-for-purpose vehicle adaptation scheme in line with international best practice that would replace the DDS, as it is no longer fit-for-purpose on any and all aspects.
Access to transport for people with disabilities is a multifaceted issue that involves work carried out by multiple Government departments and agencies. Officials from relevant Departments and agencies are meeting to discuss the issues arising from the NDIS report and to map a way forward. My officials are proactively engaging with this work as an important step in considering ways to replace the DDS.
The Government is committed to providing services for people with disabilities which will empower them to live their lives, provide greater independence in accessing the services they choose and enhance their ability to tailor the supports required to meet their needs and plan their lives.`
181. Deputy Peadar Tóibín asked the Minister for Finance how much revenue the Government has collected from the vacant property tax in 2022 and to date in 2023. [40646/23]
View answerAs the Deputy is aware, the Vacant Homes Tax is a new measure announced in Budget 2023, which aims to increase the supply of homes for rent or purchase to meet demand. Legislative provision for the tax was made in the Finance Act 2022. The first chargeable period commenced on 1 November 2022. The first self-assessed returns are due on 7 November this year and the tax will be payable on 1 January 2024. Therefore, there is no data available yet in respect of the revenue that will be collected.
A residential property will be within the scope of the Vacant Homes Tax if it has been occupied as a dwelling for less than 30 days in a chargeable period. The Vacant Homes Tax will be charged at a rate equal to three times the property’s existing base Local Property Tax liability, and must be paid in addition to Local Property Tax. A small number of narrow exemptions are available to ensure that home-owners are not excessively penalised for normal temporary vacancy. As with Local Property Tax, the Vacant Homes Tax will apply only to habitable residential properties - it will not apply to derelict or uninhabitable properties.
This measure aims to increase the supply of homes for rent or purchase to meet demand, rather than raise revenue. It is a new measure which comes into operation this year. The estimated yield is low, as I anticipate this tax will influence behaviour and lead to property owners putting their vacant properties to more effective use.
183. Deputy Pearse Doherty asked the Minister for Finance the projected cost of extending the reduced rate of VAT to electricity and gas to end-December 2023. [40706/23]
View answerThe estimated cost of extending the reduced rate of VAT to electricity and gas to end-December 2023 is €57.4m (€40.6m for electricity and €16.9m for gas).
184. Deputy Cathal Crowe asked the Minister for Finance if he will consider giving a tax concession to small-scale landlords in Budget 2024, in line with the tax concession that is currently been given to those who rent out rooms in their own homes under the rent-a-room relief scheme, with a view to helping to keep such landlords in the rental system; and if he will make a statement on the matter. [40709/23]
View answerDecisions regarding tax incentives and reliefs, whether in respect of the introduction of new measures or the amendment of existing measures, are normally made in the context of the annual Budget and Finance Bill process. Such decisions must have regard to the sound management of the public finances and my Department's Tax Expenditure Guidelines. Tax reliefs, no matter how worthwhile in themselves, may serve to narrow the tax base and can make general reform of the tax system that much more difficult. As the Deputy will appreciate, it is a longstanding practice of the Minister for Finance not to comment specifically on any matters that might be the subject of Budget decisions, in advance of the Budget.
It is also important to note that a wide array of tax reliefs and exemptions are already available for landlords and the property sector. The combined cost of these, in tax receipts forgone, is significant. For landlords subject to income tax, the current position is that, after the deduction of allowable expenses, rental income is subject to tax as part of the total taxable income of the landlord. Individual landlords may therefore be subject to income tax at their marginal rate of tax in addition to which USC and PRSI will also apply.
Some examples of deductible expenses currently available to landlords include:
• the cost of maintenance, repairs, insurance and management of the property; property management fees;
• the cost of registering a residential tenancy with the Residential Tenancies Board; the cost of letting, such as letting agency fees; and the cost to the landlord of any goods provided or services rendered to a tenant;
• with effect from 1 January 2019, 100% of the interest on mortgages for residential rental properties may also be deducted;
• wear and tear allowances are available in respect of furniture, fixtures and fittings provided by a landlord. These allowances are granted at the rate of 12.5% per annum over a period of 8 years;
• owners of rental properties are also entitled to claim deductions of up to €10,000 against rental income from that premises for various expenses incurred prior to it being first let after a six-month period of non-occupancy; and
• Finance Act 2022 provided for the deduction of up to €10,000 in certain retrofitting expenses incurred by landlords on rented residential properties where tenants remain in situ.
With that said, my Department continues to monitor all aspects of the property market, and I will continue to work with my colleagues in Government to ensure that any further interventions in the housing market are appropriately calibrated, represent the best use of scarce public resources and boost the supply of housing in both the public and private sectors.
186. Deputy Richard Bruton asked the Minister for Finance the number of taxpayers who make claims for unreimbursed medical expenses each year; whether the Revenue Commissioners have made any estimates of the amount of under-claiming in respect of medical expenses; and if he will make a statement on the matter. [40737/23]
View answerI am advised by Revenue that the number of taxpayer units who availed of tax relief on health expenses incurred is included in the ‘Cost of Tax Expenditures’ publication which is available on the Revenue website at
www.revenue.ie/en/corporate/documents/statistics/tax-expenditures/costs-tax-expenditures.pdf
For the Deputy’s convenience, the below table breaks down the number of taxpayer units and cost of health expenses relief for the years 2018 to 2021. It should be noted, that a taxpayer unit can be included in the totals for Health Expenses (excluding nursing homes expenditure) and Health Expenses (including nursing homes expenditure) claimants.
|
2021 €m Units |
2020 €m Units |
2019 €m Units |
2018 €m Units |
|
|
Health Expenses (Total) |
208.2 571,800 |
181.4 541,900 |
206.2 572,200 |
190.1 527,100 |
|
Health Expenses (Excluding Nursing Homes) |
172.0 567,900 |
145.8 538,000 |
169.0 568,200 |
155.5 522,800 |
|
Health Expenses (Nursing Homes Only) |
36.2 7,000 |
35.6 7,100 |
37.2 8,000 |
34.7 7,700 |
I am further informed by Revenue that health expenses claims that are submitted by taxpayers and their agents form the basis on which the tax relief is provided. Accordingly, there is no available data from which to estimate the quantum of health expenses that would be eligible for tax relief but for which the relief was not claimed.
187. Deputy Cathal Crowe asked the Minister for Public Expenditure, National Development Plan Delivery and Reform for an update on the long-awaited increase to pensions for former An Post workers (details supplied); and if he will make a statement on the matter. [39570/23]
View answer189. Deputy Neasa Hourigan asked the Minister for Public Expenditure, National Development Plan Delivery and Reform his plans to grant approval for the increase in pensions and deferred pensions for members of the An Post superannuation scheme; and if he will make a statement on the matter. [39596/23]
View answer190. Deputy Brendan Howlin asked the Minister for Public Expenditure, National Development Plan Delivery and Reform when he proposes to approve the Labour Court recommended increase in pension entitlements for An Post pensioners who have been due pension increases from 1 January 2022 and further increases from January 2023 and July 2023; and if he will make a statement on the matter. [39621/23]
View answer191. Deputy Michael Ring asked the Minister for Public Expenditure, National Development Plan Delivery and Reform when approval will issue on a matter (details supplied); and if he will make a statement on the matter. [39648/23]
View answer192. Deputy Jim O'Callaghan asked the Minister for Public Expenditure, National Development Plan Delivery and Reform when the pension increases for An Post pensioners, approved by the Labour Court in January 2023, will be approved by his Department; and if he will make a statement on the matter. [39650/23]
View answer194. Deputy Catherine Connolly asked the Minister for Public Expenditure, National Development Plan Delivery and Reform pursuant to a Labour Court recommendation (details supplied), for a status update on the process to increase pensions in payment to all pensioners in the An Post superannuation scheme; the timeline for same; and if he will make a statement on the matter. [39686/23]
View answer198. Deputy Róisín Shortall asked the Minister for Public Expenditure, National Development Plan Delivery and Reform if he will take steps to approve the long-awaited pension increase for An Post pensioners (details supplied); the reason for the delay; and if he will make a statement on the matter. [39700/23]
View answer200. Deputy Paul Kehoe asked the Minister for Public Expenditure, National Development Plan Delivery and Reform when An Post pensioners will receive long-delayed increases to their pension; and if he will make a statement on the matter. [39724/23]
View answer201. Deputy Paul Murphy asked the Minister for Public Expenditure, National Development Plan Delivery and Reform if, given that the 7,000 An Post pensioners awaiting increases to their pension have been left waiting for nearly nine months for same, he will provide the final approval to allow these increases to take effect as a matter of urgency (details supplied); and if he will make a statement on the matter. [39782/23]
View answer203. Deputy Verona Murphy asked the Minister for Public Expenditure, National Development Plan Delivery and Reform if his Department has approved the An Post pension increases as approved by the Labour Court in January 2023; what date will payment of approved increases be made; and if he will make a statement on the matter. [39886/23]
View answer205. Deputy Rose Conway-Walsh asked the Minister for Public Expenditure, National Development Plan Delivery and Reform when he will provide the necessary Ministerial approval to increase pensions and deferred pensions for members of the An Post superannuation scheme; and if he will make a statement on the matter. [39983/23]
View answer206. Deputy Seán Canney asked the Minister for Public Expenditure, National Development Plan Delivery and Reform when approval will be given to allow communication workers to access pension increases as approved by the Labour Court; and if he will make a statement on the matter. [40011/23]
View answerI propose to take Questions Nos. 187, 189, 190, 191, 192, 194, 198, 200, 201, 203, 205 and 206 together.
Under the rules of the An Post Main Superannuation Scheme pension increases are subject to the authorisation of the Minister for the Environment, Climate and Communications given with the concurrence of the Minister for Public Expenditure, NDP Delivery and Reform.
On 9 March 2023 An Post wrote to the Minister for the Environment, Climate and Communications requesting Ministerial approval for three increases to pensions under the Scheme. The Department for the Environment, Climate and Communications wrote to this Department on 29 August requesting my consent for the increases.
The increases concerned are:
I. 5.0% increase effective from 1 January 2022
II. 2.0% increase effective from 1 January 2023
III. 1.0% increase effective from 1 July 2023
I gave my consent for the increases on 8th September 2023 and this has been communicated to the Department for the Environment, Climate and Communications.
The payment of the increases is now a matter for the trustees and administrators of the An Post Superannuation Scheme.
188. Deputy Rose Conway-Walsh asked the Minister for Public Expenditure, National Development Plan Delivery and Reform to provide the total office rental expenditure each year for the OPW since 2006; and if he will make a statement on the matter. [39571/23]
View answerThe following table shows the rents paid by the Commissioners of Public Works (OPW) on behalf of Government Departments and certain Agencies from 2016 to year-end 2022.
In the timeframe given for answering this PQ, it was not possible to compile all of the historical data from 2006 to year-end 2015. This information will be forwarded as soon as it is collated.
It should be noted that the figures include some rents paid by the OPW that are subsequently recovered from certain Agencies.
|
Year |
Total Office Rent 2016 to YE 2022€m |
|
2022 |
€97.7 |
|
2021 |
€99.9 |
|
2020 |
€96.8 |
|
2019 |
€98.5 |
|
2018 |
€96.2 |
|
2017 |
€96.7 |
|
2016 |
€90.5 |
193. Deputy Holly Cairns asked the Minister for Public Expenditure, National Development Plan Delivery and Reform to detail the preparations being undertaken by his Department in advance of the European Accessibility Act (Directive (EU) 2019/882); the guidance that is being issued by his Department to organisations and businesses in advance of the enactment of the directive; and if he will make a statement on the matter. [39673/23]
View answerI wish to advise the Deputy that a deferred reply will be issued to her in respect of this Parliamentary Question, in line with Standing Order 51(1)(b).
