Written Answers Nos. 121-140
121. Deputy Pearse Doherty asked the Minister for Finance his views, and his Department's analysis, of the recent departure of companies from Euronext Dublin; the causes of these departures and potential policy measures to support the Irish stock exchange; and if he will make a statement on the matter. [43139/23]
View answerOver the years, companies have delisted from the Irish Stock Exchange for various commercial reasons. Regarding recent announcements, I have taken note of these developments and my officials have engaged with Euronext Dublin on this and related matters and beyond that it would not be appropriate for me to comment on individual commercial decision-making of specific companies.However, it is clear that public equity markets in Europe, including Ireland, have been facing significant challenges over the last decade due to a variety of overlapping reasons. Competition from private equity and from more liquid US capital markets are material factors in this context. The increasing importance of large stock market indices linked to the rise in passive investment strategies has also been a pull factor in listings activity gravitating towards the largest stock exchanges. As such EU solutions will need to be found to address the common challenges faced by EU exchanges.In this regard the EU Capital Markets Union Plan seeks to promote companies’ access to public equity markets through various measures, such as the establishment of EU markets infrastructure, reforms to listings rules, measures designed to increase retail investor participation in capital markets and to promote SME investment research. Ireland is a strong supporter of the CMU Action Plan and is actively involved in its development, including measures specifically designed to promote companies seeking to access funding through Initial Public Offerings (IPOs).The recent political agreement on the review of the Markets in Financial Instruments Regulation provides for the establishment of a European consolidated tape. Unlike the EU, the USA has had a consolidated tape since the 1970’s, which has significantly helped their capital markets develop. This tape will bring together the prices and volumes of financial instruments, such as shares and bonds, from hundreds of execution venues across all Member States into a single stream of information, equally accessible for everybody. The tape will enable both retail and institutional investors to have a reliable and transparent view of prices and liquidity in one centralised place, improving their ability to assess whether they have achieved best execution outcomes.Another pertinent CMU initiative currently under negotiation is the Listings Package, which aims to advance the CMU project by supporting improved access to market-based sources of financing for EU companies (particularly smaller firms such as those listed on SME Growth Markets). Key elements of the package include the introduction of simpler prospectus rules and more proportionate market abuse rules, provisions to allow companies use multiple vote share structures thereby retaining control of the original owners’ vision while accessing public markets, as well as measures to enhance the production and distribution of investment research on midcaps and SMEs. The Listing Review reached council general agreement in June.Finally, I would note that Euronext Dublin remains a global and group centre of excellence for debt and fund listings, supporting companies and investors active in the capital markets and recently conducted a study on Irish equity capital markets.
123. Deputy James Lawless asked the Minister for Finance if he has any plans with regard to the application of VAT to returns under the deposit return scheme; and if he will make a statement on the matter. [43168/23]
View answerAs the Deputy will be aware the planned ‘go-live’ date for the operation of the Deposit Return Scheme (DRS) is February 2024.
The appropriate VAT treatment for the scheme has been considered and discussed with the European Commission. I intend to amend the VAT Consolidation Act 2010 in Finance Bill (no.2) 2023 to set out the operating principles of the scheme with further details set out in Regulation.
The intention is that the operator of the scheme account for VAT on unredeemed deposits. This means that no business in the supply chain, such as wholesalers and retailers, will have to account for VAT on deposits at any point.
This approach is in line with the VAT Directive and with the principles of the proposed Deposit and Return Scheme.
127. Deputy Richard Boyd Barrett asked the Minister for Finance if he is considering additional tax measures in budget 2024 on information and communication companies, including social media and digital streaming companies, to fund public broadcasting; and if he will make a statement on the matter. [43150/23]
View answerThe Deputy will be aware that it is a longstanding practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.
Nevertheless, I can state that one of the key outcomes of the work of the Future of Media Commission was that reform of the current funding model is necessary to provide a more sustainable basis for supporting public service media content. Following its consideration of the Commission’s report, Government established a Technical Working Group to examine the options for reform of the TV licence system. While consideration of this matter was paused by Government in light of the controversy surrounding lapses in proper governance and controls at RTÉ, Government remains committed to the necessary reform. However, pending further consideration by Government, it is not appropriate to speculate on the basis for any reformed funding model.
128. Deputy Pádraig O'Sullivan asked the Minister for Finance the value of uncollected local property tax in 2022 as a consequence of exemptions and deferrals; if he will provide the figure as a percentage of gross; and if he will make a statement on the matter. [42849/23]
View answerI am advised by Revenue that the available information in respect of the number of Local Property Tax exemptions and deferrals claimed for the year 2022 is published on the Revenue website at: www.revenue.ie/en/corporate/documents/statistics/lpt/lpt-stats-update-120723.pdf
As of July 2023, €510 million has been collected from all sources for the Local Property Tax year 2022. For the same period, the estimated Local Property Tax foregone as a result of exemptions is approximately €5.4 million. The estimated tax forgone as a result of deferrals is approximately €2.9 million.
135. Deputy James O'Connor asked the Minister for Finance if his Department is considering further emergency measures to reduce fuel prices in budget 2024; and if he will make a statement on the matter. [43091/23]
View answer205. Deputy Niamh Smyth asked the Minister for Finance if correspondence will be reviewed in light of budget 2024 (details supplied); and if he will make a statement on the matter. [43249/23]
View answerI propose to take Questions Nos. 135 and 205 together.
As the Deputies will be aware, it is a longstanding practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.
136. Deputy Richard Boyd Barrett asked the Minister for Finance if he is considering any changes to the tax treatment of REITs and other property-related investment vehicles in budget 2024; and if he will make a statement on the matter. [43151/23]
View answerAs part of its 2022 Report, the Commission on Taxation and Welfare recommended that a review of both the Real Estate Investment Trust and Irish Real Estate Fund tax regimes with regard to institutional investment in the Irish property market should be undertaken. This recommendation has been incorporated into the Terms of Reference for the “Funds Sector 2030” Review which were published on 6 April this year.
In line with the Terms of Reference, the Funds Review will consider:
“an examination of the regimes for Real Estate Investment Trusts (REITs) the Irish Real Estate Funds (IREFs) and their role in the property sector, including how they support housing policy objectives”.
A multi-disciplinary Review Team, made up of Department of Finance and Central Bank of Ireland officials, has been established. The Review Team, led by the Department of Finance, will also work closely with the Revenue Commissioners. A public consultation was launched in late June with a deadline of 15 September which has now passed. In addition to this consultation exercise, there will be extensive direct engagement with relevant public sector and private sector stakeholders throughout the period of the Review.
As this review process is ongoing, it is unlikely that any changes will be made in 2023. It is considered prudent to await the outcome of the review before announcing any further changes to the regimes.
137. Deputy Joe Flaherty asked the Minister for Finance if he will be reviewing the tax reliefs available for the SME sector; and if he will make a statement on the matter. [43190/23]
View answerSMEs are the foundation underpinning the Irish economy, accounting for the majority of employment in the State. Their vital importance to our economy is reflected in our Programme for Government commitments.
My Department has been proactive in supporting SMEs by introducing and enhancing a number of taxation measures which help small businesses access investment, scale-up and expand. Measures include the section 486C relief for certain start-up companies; the Key Employee Engagement Programme (KEEP); the Employment Investment Incentive (EII); the Start-Up Relief for Entrepreneurs (SURE); and the Start-Up Capital Investment (SCI). Further information on these incentives is available on the Revenue website at www.revenue.ie.
These tax incentives have undergone significant change in recent years following reviews and feedback from stakeholders, in particular the SME community.
Notwithstanding the number of tax incentives and supports available to SMEs, I am committed to continuing to keep the current suite of enterprise tax measures under review to ensure that they are working properly, and fulfilling their potential for our economy, in line with my Department’s guidelines on Tax Expenditures.
As the Deputy will be aware, it is a longstanding 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 decisions.
138. Deputy Brian Leddin asked the Minister for Finance what measures he intends to apply in budget 2024 to reverse the trend in sales of large and heavy vehicles for private use, in recognition of the increased safety risk to vulnerable road users posed by heavier and larger vehicles, the increased demand for fuel and energy and the overall impact on the carbon budget for the transport sector; and if he will make a statement on the matter. [43174/23]
View answerOfficials from the Department of Finance continue to monitor developments in the vehicle taxation area. New proposals are considered and current vehicle tax policies are kept under review as part of the Tax Strategy Group and Budgetary cycle. Going forward, it is possible that vehicle taxes may shift to weight-based in order to protect the vehicle tax base, as outlined in this year’s Tax Strategy Group Paper.
The scale of the proposed ‘electrification’ of the national car fleet will entail significant revenue risk, with the Exchequer estimated to lose approximately €1.5 billion worth of revenue annually from motor tax, VAT, fuel excise from Internal Combustion Engines (ICE) vehicles. Additionally, as Battery Electric Vehicle (BEV) uptake increases, the financial sustainability of supports for BEVs will have to be reconsidered.
However, it is important to note that the existing vehicle tax structures in this State currently have a strong environmental rationale, with the more pollutant vehicles paying higher rates of tax. Additionally, as many heavier vehicles currently on the market are more pollutant – with the notable exception of large EVs - those heavier vehicles incur higher rates of tax, between Motor Tax, Vehicle Registration Tax and the NOX Charge. In summary, vehicle weight generally correlates with vehicle emissions, therefore within the existing tax system the larger more pollutant cars are those which are already subject to higher rates of tax whereas lighter, more efficient cars are subject to lower rates of tax.
Regarding any future decisions on EV relief, it is a longstanding practice of the Minister for Finance not to comment further, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.
