Written Answers Nos. 251-266
251. Deputy Michael McGrath asked the Minister for Finance the number of notice of attachments issued by the Revenue in respect of the bank accounts of businesses for each year since 2008 and to date in 2012; and if he will make a statement on the matter. [38244/12]
Amharc ar fhreagraI am informed by the Revenue Commissioners that the number of notice of attachments issued by Revenue in respect of the bank accounts of businesses is set out in column 6 of the following table. Attachment notices can also be served on parties other than financial institutions and in certain circumstances are served on ‘debtors to’ or ‘employer(s) of’ the taxpayer. For completeness the table additionally includes the total number and value of attachment notices issued, and the actual number of businesses on which attachment notices were served.
|
Year |
Total No. of Attachments Issued |
No. of businesses with attachments per year |
Total Value of referrals (€m) |
No. of Attachments specific to Banks / Building Society |
No. of businesses with Attachments specific to Banks / Building Society |
Value of Attachments specific to Banks / Building Society (€m) |
|
2008 |
2,362 |
Not available |
131.4 |
Not available |
Not available |
Not available |
|
2009 |
3,199 |
Not available |
205.5 |
Not available |
Not available |
Not available |
|
2010 |
4,228 |
2,887 |
232.7 |
3,342 |
2,644 |
182.1 |
|
2011 |
4,463 |
3,146 |
213.0 |
3,646 |
2,894 |
174.6 |
|
2012 |
2,793 |
2,073 |
126.8 |
2,299 |
1,870 |
105.3 |
[*Note : Data is not maintained in such a manner that facilitates provision of this information for years prior to 2010.]
I am advised by the Revenue Commissioners that in general, cases are referred for enforcement where a taxpayer or business has failed to comply with the obligation to pay tax that is due and where there are no satisfactory proposals towards addressing the debt. In every case, prior to enforcement action by Revenue, the taxpayer or business will have been informed that continuing non-compliance is likely to result in enforcement action.
I am satisfied that Revenue is very committed to engaging with viable businesses and taxpayers who want to pay their taxes but can’t in the short term. There are currently 16,000 businesses in phased payment arrangements involving liability of €123 million. It is critical that businesses or individuals that are experiencing payment difficulties engage with Revenue in a realistic way at the earliest opportunity. Revenue will not initiate enforcement proceedings in situations where there is meaningful engagement and where the terms of any agreement are being adhered to.
252. Deputy Michael McGrath asked the Minister for Finance if he will consider extending the remit of the Credit Review Office to include Permanent TSB in view of the fact that the bank has customers engaged in business and who may wish to have credit decisions reviewed from time to time. [38250/12]
Amharc ar fhreagraAs the Deputy is aware, the Credit Review Office (CRO) reviews decisions by the banks participating in NAMA to refuse, reduce or withdraw credit facilities (including applications for restructured credit facilities) from €1,000 up to €500,000. PTSB are not participating in NAMA. The Action Plan for Jobs 2012 contains a commitment to “assess the Credit Review Office to ensure SMEs are getting the support on bank lending they require.” One of the issues to be examined is whether the statutory basis under which the CRO operates should be adjusted, which may include a review of which banks participate in the process. My Department intends awarding the contract to the successful bidder for the assessment this week, with the final report due to be submitted in early November.
253. Deputy Michael McGrath asked the Minister for Finance if he will give details, for each covered institution, of the amount of secured and unsecured senior bonds outstanding at the end of September 2010 on the expiry of the bank guarantee under the credit institutions (financial support) scheme 2008. [38256/12]
Amharc ar fhreagraThe covered institutions have supplied me with the following information:
|
Institute |
Secured Senior Bonds at 30 Sept 2010 €bn |
Unsecured Senior Guaranteed Bonds at 30 Sept 2010 €bn |
Unsecured Senior Unguaranteed Bonds at 30 Sept 2010 €bn |
|
AIB(1) |
2.8 |
6.2 |
6.4 |
|
EBS |
2.0 |
1.0 |
1.0 |
|
IBRC (2) |
0.2 |
2.4 |
4.7 |
|
PTSB |
3.1 |
4.5 |
2.9 |
|
BOI |
12.7 |
8.3 |
5.1 |
(1) Does not exclude cross holdings between AIB & EBS as they were separate entities at 30 September 2010.
(2) Includes €0.6bn of unsecured senior unguaranteed bonds issued by the former INBS.
254. Deputy Michael McGrath asked the Minister for Finance the position regarding self-employed persons claiming tax relief on medical expenses through the MED1 form; and if he will make a statement on the matter. [38273/12]
Amharc ar fhreagraThe position is that Section 469 of the Taxes Consolidation Act 1997 provides the legislative basis for the granting of relief for qualifying health expenses incurred in respect of the provision of health care. The qualifying criteria in relation to the granting of relief are the same irrespective of whether an individual is self-employed or paying tax under the PAYE system. A self-employed individual can include a claim for relief for qualifying health expenses at the same time as he or she makes an annual tax return (Form 11) for a year of assessment and relief will be granted as part of the assessment for that year. Details of the health expenses claim can be entered on Panel I on the Form 11. For ROS filers the details can be entered under the Personal Tax Credits tab under ‘Other health expenses’.
Alternatively, where a return has already been made for the year of assessment and a claim for health expenses relief was not included on the return, the individual may submit a form Med 1 and request a revised assessment to include relief for the qualifying health expenses.
For a PAYE worker who pays tax by deduction on an ongoing basis throughout the tax year, it is only necessary to make a claim on Revenue’s PAYE Anytime service or to submit a form Med 1 to obtain relief.
However, in all cases, whether self employed or PAYE, all receipts for a period of six years must be retained by the claimant in case the claim is subsequently chosen for detailed examination.
Note that the time limit for the making of a claim for relief is 4 years after the year of assessment in which the expenditure was incurred.
255. Deputy Pearse Doherty asked the Minister for Finance the estimated return to the Exchequer in a full year from the introduction of a new rate of tax of 48% on individual income in excess of €100,000. [38288/12]
Amharc ar fhreagraIt is assumed that the threshold for the proposed new tax rate mentioned by the Deputy would not alter the existing standard rate band structure applying to single and widowed persons, to lone parents and married couples. I am advised by the Revenue Commissioners that the estimated full year yield to the Exchequer, estimated by reference to 2013 incomes, of the introduction of a new 48% rate would be of the order of €365 million. However, given the current band structures, major issues would need to be resolved as to how in practice such a new rate could be integrated into the current system and how this would affect the relative position of different types of income earners.
This figure is an estimate from the Revenue tax-forecasting model using latest actual data for the year 2010, adjusted as necessary for income and employment trends in the interim. It is, therefore, provisional and subject to revision.
256. Deputy Pearse Doherty asked the Minister for Finance the estimated return to the Exchequer in a full year by increasing the rate of capital gains tax from 30% to 40%. [38289/12]
Amharc ar fhreagraI am advised by the Revenue Commissioners that the full year yield to the Exchequer, estimated in terms of expected 2013 gains, from increasing the CGT tax rate from 30% to 40% could be in the region of €160 million. This figure includes corporate gains. However, this estimate assumes no behavioural changes on the part of taxpayers, and large increases in rates such as are contemplated in the question may have a significant behavioural impact and may not produce a corresponding increase in tax yield. In current economic conditions any estimate of additional yield must be treated with caution. In addition, increasing the rate could, in theory, lead to a reduction in yield from the tax.
257. Deputy Pearse Doherty asked the Minister for Finance the estimated return to the Exchequer in a full year from raising the rate of capital acquisitions tax from 30% to 40% and reducing the thresholds by 25%. [38290/12]
Amharc ar fhreagraI am advised by the Revenue Commissioners that the estimated full year yield to the Exchequer from increasing the Capital Acquisitions Tax rate by 10% to 40 %, based on the expected outturn in 2012, could be in the region of €100 million, assuming no change in the existing thresholds. The additional full year yield from existing taxpayers from reducing the existing thresholds by 25% and applying the proposed rate of 40% to the additional amounts thus brought into charge is estimated at €50 million.
Revenue do not receive information on gifts and inheritances which currently do not have to be declared so it is not possible to estimate the potential yield if such benefits were brought into the tax net.
These estimates are based on transactions recorded in 2010, the latest year for which the necessary detailed information is available. It should be noted that these estimates are based upon an assumption that there would be no behavioural impact of these changes, which could lead to a less than expected impact on Exchequer yield. In addition, the realization of any estimated yield from an increase in taxation on assets relating to property is subject to movements in the value of such assets, which are currently occurring in the economy.
258. Deputy Pearse Doherty asked the Minister for Finance if he will provide a comprehensive list of all tax reliefs paid from the Exchequer in 2011, including the estimated full-year cost per relief; if he will further provide the full-year cost of each relief in 2010 when estimates are not available, in tabular form. [38291/12]
Amharc ar fhreagraI am advised by the Revenue Commissioners that the total identifiable costs to the Exchequer which are currently available relate to income tax and corporation tax allowances, reliefs, exemptions and tax credits available as set out in the following tables for 2008 and 2009, the most recent year for which the necessary detailed historical information is available. It should be noted that there have been changes since this period, i.e. some schemes have been abolished or modified and others have been introduced. For instance, as the Deputy will be aware, virtually all of the area-based and property tax incentive schemes have ended and this year’s Finance Act provided for a cap on property-based Accelerated Capital Allowance Schemes (in line with the tax life of the particular scheme) to be introduced from 1 January 2015. Relevant notes relating to items in the tables are also included.
Index of Tables and Notes
a) Note on the Cost of Tax Credits, Allowances and Reliefs 2008 and 2009
b) Table IT 6 showing Cost of Tax Credits, Allowances and Reliefs 2008 and 2009. Figures of cost in relation to corporation tax are included in the “Income Tax and/or Corporation Tax ” section of this table.
c) Notes on Table IT 6
d) Note on Green Paper on Pensions
e) Estimate of cost of certain property-based tax incentives and incomes exempt from tax for 2008 and 2009
f) Note on reliefs in respect of which costs are not currently quantifiable or are negligible or are not identifiable within total aggregates.
Work is ongoing to update the costs to 2010 terms but this is not yet complete.
a) Cost of Tax Credits, Allowances and Reliefs 2008 and 2009
The following table IT 6 shows the estimated cost in terms of revenue forgone of the personal tax credits and the main reliefs and deductions allowable under the income tax system. A number of reliefs which apply both to individuals and companies is also included and the cost shown in relation to these reliefs covers income tax and corporation tax.
An adjustment is included in the cost figures applying to income tax to compensate for incomplete numbers of tax returns on record at the time of compiling the estimates.
The tax credits and reliefs listed in the table serve varying purposes. Many are essentially structural reliefs through which individual tax liabilities are adjusted to reflect relative taxable capacity. The main personal tax credits are a good example of this since they may be regarded as part of the progressive income tax structure representing a band of income chargeable at a zero rate. Others, such as relief for interest paid in full or investment in corporate trades, are tax-based incentives in favour of specific groups or activities which are designed to promote certain aspects of public policy.
In computing taxable profits, account needs to be taken in some way of the depreciation of capital assets incurred in earning those profits. To this extent, the figures in the table of the “costs” of capital allowances should not be regarded as measuring a “loss of tax revenue” on profits. To compute such “loss”, regard would have to be had to the excess of the amount of the capital allowances at current rates over the amount of the normal allowances.
The figures shown for the basic personal tax credits (married, single and widowed) are the costs of these tax credits as if all other tax credits and the exemption limits did not apply. They do not include individuals who are not on Revenue records because their incomes are below the income tax thresholds. The cost figures for the exemption limits are based on the excess of the exemption limits over the basic personal tax credits.
The figures of cost are for 2008 and 2009 and all figures are based on tax due in respect of assessments for each year and not on tax receipts within that year.
The figure against each credit or allowance represents the additional tax which would become payable if the tax credit or allowance were withdrawn assuming no consequent change in the behaviour of taxpayers (for example, in relation to the reliefs for savings), or the amounts of payments (for example, interest payable on certain savings schemes might need adjustment to take account of the new tax liability).
The numbers of claimants of each credit or relief are shown for both years to the extent that they are available. The numbers included are the taxpayers who would be adversely affected by the withdrawal of the respective credit or relief.
In the calculations, each tax credit or allowance has been dealt with separately and on the assumption that the rest of the tax system remained unchanged. It would be therefore inaccurate to calculate the effect of withdrawing all the credits, reliefs and allowances by simply totalling the figures. For example, the costs shown for capital allowances and stock relief are also calculated on the basis of separate withdrawal of these reliefs. Their combined cost would be greater than the sum of the separate costs because allowances are not always fully set off against available profits. For instance, a person with €1,000 gross trading profits, €1,000 capital allowances and €1,000 stock relief would pay no tax if either of the reliefs were withdrawn but would pay tax on €1,000 profits if both reliefs were withdrawn. In this case, the cost of each relief separately is nil but the combined cost is tax on €1,000. Basic data is not available to enable an estimate of the combined cost of these reliefs to be made.
The figures for estimates based on tax returns have been grossed up to an overall expected level to adjust for incompleteness in the numbers of returns on record at the time the data was extracted for analytical purposes.
Apart from the artists exemption, these figures do not take account of the application of the restriction of reliefs originally provided for in section 17 of Finance Act 2006, which took effect from 1 January 2007. The restriction was extended by Section 23 Finance Act 2010.
Finally, the estimates shown in many cases are tentative and are subject to revision in the light of later information.
b) Table IT 6 showing Cost of Tax Credits, Allowances and Reliefs 2008 and 2009
INCOME TAX AND CORPORATION TAX
Cost of Tax Credits, Allowances and Reliefs 2008 and 2009
|
Tax Relief Provision |
Estimated cost for 2008 (1) |
- |
Estimated cost for 2009 (1) |
- |
|
INCOME TAX |
€m |
Numbers |
€m |
Numbers |
|
Exemption limits: |
- |
- |
- |
|
|
General Exemption (2) |
0.0 |
0 |
0.0 |
0 |
|
Child Addition (2) |
0.3 |
900 |
0.2 |
800 |
|
Age Exemption (2) |
90.8 |
57,700 |
82.4 |
54,900 |
|
Married Person's Credit (3) |
2,944.9 |
853,100 |
2,853.2 |
835,000 |
|
Single Person's Credit (3) |
2,406.8 |
1,503,300 |
2,088.2 |
1,316,900 |
|
Widowed Person's Credit (3) |
184.3 |
81,100 |
184.8 |
81,100 |
|
Additional Credit to Widowed Person in Year of Bereavement |
4.9 |
4,000 |
4.9 |
4,000 |
|
Additional Bereavement Credit to Widowed Parent |
6.9 |
2,300 |
6.2 |
2,400 |
|
Additional Personal Credit for Lone Parent |
197.4 |
116,700 |
174.1 |
103,600 |
|
Homecarer Credit |
79.5 |
93,100 |
63.9 |
77,500 |
|
Additional Credit for Incapacitated Child |
39.0 |
12,300 |
38.0 |
12,200 |
|
Employee (PAYE) Credit |
3,253.8 |
1,710,200 |
2,995.2 |
1,560,600 |
|
Dependent Relative Credit |
2.0 |
18,700 |
2.1 |
18,200 |
|
Person Taking Care of Incapacitated Taxpayer |
5.8 |
1,260 |
5.9 |
1470 |
|
Age Credit |
42.3 |
88,100 |
43.7 |
90,700 |
|
Blind Person's Credit (incl. Guide Dog Allowance) |
2.1 |
1,320 |
1.9 |
1190 |
|
Medical Insurance Premiums (4) |
321 |
1,322,400 |
589.6 |
1,233,900 |
|
Health Expenses |
266.8 |
542,600 |
145.5 |
492,800 |
|
Contributions Under Permanent Health Benefit Schemes, after Deduction of Tax on Benefits Received (5) |
4.0 |
29,200 |
3.9 |
27,300 |
|
Employees' Contributions To Approved Superannuation Schemes (6) |
655.0 |
792,600 |
729.0 |
713,600 |
|
Employers' Contributions To Approved Superannuation Schemes (6) |
165.0 |
362,700 |
153.0 |
342,200 |
|
Exemption of Investment Income and Gains of Approved Superannuation Funds (6) * |
685.0 |
N/A |
780.0 |
N/A |
|
Exemption of employers' contributions from employee BIK (6) |
595.0 |
362,700 |
558.0 |
342,200 |
|
Tax Relief on "tax free" lump sums (6) |
140.0 |
N/A |
140.0 |
N/A |
|
Retirement Annuity Premiums |
352.8 |
116,000 |
237.2 |
101,300 |
|
Personal Retirement Savings Accounts |
73.8 |
53,900 |
77.0 |
56,200 |
|
Interest paid: |
||||
|
Loans relating to Principal Private Residence |
704.6 |
778,100 |
486.3 |
782,700 |
|
Other (7) |
48.5 |
5,400 |
26.5 |
5,000 |
|
Rent Paid in Private Tenancies |
96.5 |
222,100 |
85.9 |
196,900 |
|
Expenses Allowable to Employees under Schedule E |
75.2 |
835,900 |
73.7 |
744,300 |
|
Third Level Education Fees |
19.9 |
36,000 |
20.6 |
34,700 |
|
Exemption of Certain Earnings of Writers, Composers and Artists |
21.8 |
2,630 |
22.1 |
2,590 |
|
Dispositions (Including Maintenance Payments made to Separated Spouses) |
22.33 |
7,820 |
19.5 |
6,840 |
|
Exemption of Interest on Savings Certificates, National Installment Savings & Index Linked Savings Bonds |
88.1 |
N/A |
138.2 |
N/A |
|
Rent a Room |
5.6 |
3,600 |
5.6 |
3,770 |
|
Exemption of Income of Charities, Colleges, Hospitals, Schools, Friendly Societies, etc. ( 8) ( 10) |
35.8 |
N/A |
40.7 |
N/A |
|
Retirement Relief for certain Sports Persons.( 9) |
0.2 |
17 |
0.2 |
15 |
|
Exemption of Irish Government Securities where owner not ordinarily resident in Ireland (10) * |
320.8 |
N/A |
486.7 |
N/A |
|
Exemption of Statutory Redundancy Payments ( 11)* |
85.4 |
29,800 |
147.8 |
77,000 |
|
Service Charges |
27.1 |
455,200 |
26.8 |
452,600 |
|
Top Slicing Relief - Reduced Tax Rate for Payments in Excess of Exemption Amounts Made as Compensation for Loss of Office |
44.7 |
3,790 |
47.8 |
6,110 |
|
Revenue Job Assist allowance |
0.2 |
330 |
0.3 |
390 |
|
Allowance for seafarers |
0.3 |
160 |
0.2 |
150 |
|
Trade Union Subscriptions |
26.4 |
341,900 |
26.7 |
345,800 |
|
Exemption From Tax of Certain Social Welfare Payments: |
||||
|
Child benefit * |
435.3 |
401,200 |
390.7 |
372,900 |
|
Early childcare Supplement* |
98.3 |
195,200 |
47.5 |
154,300 |
|
Maternity allowance * |
18.2 |
23,420 |
19 |
23,300 |
|
Foster Care Payments |
28.09 |
3,470 |
28.4 |
3,360 |
|
Exemption of Income arising from the Provision of Childcare Services |
0.8 |
440 |
0.8 |
470 |
|
Approved Profit Sharing Schemes * |
99 |
111,190 |
37.6 |
62,900 |
|
Savings-Related Share Option Schemes* |
1.3 |
2,800 |
0.8 |
1,800 |
|
Approved Share Option Schemes* |
0.1 |
280 |
0.5 |
370 |
|
Relief for New Shares Purchased by Employees |
0.3 |
280 |
0.3 |
250 |
|
Investment in Corporate Trades (BES) |
55.7 |
3,200 |
25.6 |
1,640 |
|
Investment in Seed Capital |
1.7 |
56 |
2.9 |
77 |
|
Stock Relief * |
2.0 |
N/A |
2.0 |
N/A |
|
Exempt Rental Income from Leasing of Farm Land |
N/A |
N/A |
4.4 |
2,960 |
|
Relief for expenditure on significant buildings and gardens |
5.9 |
290 |
4.6 |
150 |
|
Donation of Heritage items |
4.7 |
5 |
0.7 |
2 |
|
Donation of Heritage property to the Irish Heritage Trust. |
3.6 |
4 |
0 |
0 |
|
INCOME TAX AND/OR CORPORATION TAX ( 12) |
|
|
|
|
|
Donations to Approved Bodies |
52.4 |
131,100 |
54.1 |
155,100 |
|
Donations to Sports Bodies. (9) |
0.3 |
850 |
0.7 |
2100 |
|
Employee Share Ownership Trusts* |
8.4 |
29,200 |
1.3 |
16,400 |
|
Total Capital Allowances:( 13) |
2,176.6 |
270,200 |
2,281.60 |
298,800 |
|
of which Energy Efficient Capital Allowances |
N/A |
N/A |
1.60 |
93 |
|
Rented Residential Relief - Section 23 (13) * |
74.7 |
2,429 |
46.9 |
1,620 |
|
Effective Rate of 10% for Manufacturing and Certain Other Activities ( 15) |
160.9 |
1,046 |
340.6 |
1,370 |
|
Double Taxation Relief |
596.5 |
18,000 |
589.1 |
18,900 |
|
Investment in Films* |
32.8 |
3200 |
42 |
2,553 |
|
Group Relief |
450.3 |
2430 |
390.5 |
2,507 |
|
Research & Development Tax Credit ( 16) |
146 |
582 |
216.1 |
900 |
c) Notes on Table IT 6
(1) Figures accompanied by an asterisk * are particularly tentative and subject to a considerable margin of error.
(2) The cost figures for the exemption limits are based on the excess of the exemption limits over the basic personal tax credits. They include the cost of marginal relief for taxpayers whose incomes are not greatly in excess of the exemption limits.
(3) The figures shown for the basic personal tax credits (married, single and widowed) are the costs of these tax credits as if all other tax credits and the exemption limits did not apply. They do not include individuals who are not on Revenue records because their incomes are below the income tax thresholds.
(4) Arising from the change over to Tax Relief at Source the figures relate to the number of policies issued. These include policies where subscriptions were paid by businesses on behalf of their employees.
(5) Part of the cost of contributions to Permanent Health Benefit Schemes is not identifiable as a result of the move to a “net pay” basis for contributions by PAYE taxpayers from 6 April 2001.
(6) See the following note on “Green Paper on Pensions” for background commentary on the basis of the cost figures.
(7) “Other” relates to borrowings for purposes such as acquiring an interest in a company or partnership.
(8) The income on which the cost of exemption from income tax for charities, colleges, hospitals, schools, friendly societies, etc. is based includes dividend income on which income tax deducted at source has been repaid, other investment income, payments received under covenant, donations by the PAYE sector to approved bodies together with the associated tax relief and donations by the self-employed and corporate sectors to approved bodies and approved sports bodies. Information is not available about other income received gross.
(9) The cost figures for relief for certain Sports Persons are based on income tax self assessment returns and for donations to Approved Sports Bodies are based on income tax and corporation tax self assessment returns.
(10) In the absence of other information, tax has been assumed at the standard rate of income tax even though a different rate might be more appropriate.
(11) The costs and numbers for the Exemption of Statutory Redundancy Payments are based on external data. From 2009 the “numbers” indicate the numbers of claims received in the year and not the numbers of claims approved.
(12) The costs included for corporation tax are by reference to accounting periods which ended in the years 2008 and 2009.
(13) The cost shown for capital allowances does not include any cost associated with “unused capital allowances”, that is, capital allowances which are not absorbed by a company in the accounting period in which they arise because they exceed the amount of the company’s profits of that accounting period which are available for offset. Unused capital allowances can be offset as losses against taxable profits arising in the previous accounting period and against certain profits arising in future accounting periods and can be offset against the profits of another company in the same group of companies. It is estimated that €3587 million and €5373 million of unused capital allowances were claimed in respect of 2008 and 2009 accounting periods respectively but as the proportion of this item which is included in previous years losses and in group relief is not separately identifiable a reliable estimate of the cost of the capital allowance element cannot be provided.
(14) The tax cost shown for section 23 type relief is the estimated ultimate tax cost relating to the total allowable expenditure in respect of claims made in 2008 and 2009 tax returns for the first time. The cost shown is for income tax cases only.
(15) the cost shown for manufacturing relief for 2008 is compiled using the basic data available but for technical reasons associated with a system redesign it is understood to be understated by at least €100m.
(16) The costs shown for R&D is for claims for R&D on corporation tax returns for accounting periods ending in 2008 and 2009. However, the cost for 2009 includes the amount of credit allowed against 2009 tax together with the amount offset against tax of previous accounting periods and as payable credits.
d) Note on Green Paper on Pensions - Review of estimates of cost
As part of the work on the Green Paper on Pensions, a review was carried out of the current regime of incentives for supplementary pension provision with a view to developing more comprehensive and reliable estimates of the cost of reliefs in this area. The review examined, among other things, the current reliefs and incentives for investment in supplementary pensions and the data available on which to base reliable estimates of the costs in revenue foregone to the Exchequer.
The review drew on newly available 2006 aggregate data on contributions to pension schemes by employers and employees arising from a P35 initiative introduced on foot of provisions that were included in Finance Act 2004 with a view to improving data quality. Estimates of the cost of tax for private pension provision updated for 2008 and 2009 are included in table IT6.
The breakdown and make-up of these estimated costs of reliefs differ from presentations of costs in this area for years PRIOR TO 2005 in a number of respects and are not directly comparable. further details on the cost of tax and other reliefs and the changes in the methodology are contained in pages 106 and 107 of the Green Paper on Pensions which is available at www.pensionsgreenpaper.ie.
e) Estimate of cost of certain property-based tax incentives and incomes exempt from tax for 2008 and 2009
Certain property-based tax incentives and incomes exempt from tax - uptake and estimated potential cost to the Exchequer in terms of income tax and corporation tax forgone based on 2008 and 2009 tax returns
Provisions were included in the Finance Acts of 2003 and 2004 to enable new statistical data on the uptake of tax relief for certain property-based tax incentives and incomes exempt from tax to be obtained from tax returns. This information, derived from changes introduced by the Revenue Commissioners to income tax returns and corporation tax returns for 2008 and 2009, is set out in the following tables.
The figures shown include the amounts claimed in the year but exclude amounts carried forward into the year either as losses or capital allowances, and include any amounts of unused losses and/or capital allowances which will be carried forward to subsequent years.
|
TaxIncentive / Income Exemption 2008 |
Amount Claimed €m |
Assumed maximum tax cost €m |
Number of claimants |
|
Urban renewal |
230.8 |
87.0 |
3,367 |
|
Town Renewal |
61.6 |
24.2 |
998 |
|
Seaside Resorts |
16.1 |
6.4 |
1,091 |
|
Rural Renewal |
88.4 |
35.7 |
2,803 |
|
Multi-storey car parks |
16.8 |
6.6 |
134 |
|
Living Over the shop |
6.4 |
2.6 |
81 |
|
Enterprise Areas |
6.3 |
2.5 |
138 |
|
Park and Ride |
1.8 |
0.7 |
21 |
|
Holiday Cottages |
36.9 |
14.8 |
844 |
|
Hotels |
305.5 |
116.4 |
1,996 |
|
Nursing Homes |
48.4 |
19.8 |
734 |
|
Housing for the Elderly/infirm |
7.4 |
3.0 |
179 |
|
Hostels |
1.68 |
0.69 |
22 |
|
Guest Houses |
0.29 |
0.12 |
10 |
|
Convalescent Homes |
1.4 |
0.5 |
32 |
|
Qualifying Private Hospitals |
30.2 |
12.3 |
342 |
|
Qualifying sports injury clinics |
4.1 |
1.7 |
60 |
|
Buildings Used for certain child care purposes |
30.3 |
12.2 |
519 |
|
Qualifying Mental Health Centres |
0.1 |
0.0 |
3 |
|
Student Accommodation |
60.0 |
23.5 |
814 |
|
Caravan Camps |
1.5 |
0.6 |
10 |
|
Mid-Shannon Corridor Tourism Infrastructure |
1.8 |
0.7 |
12 |
|
Exemption of profits or gains from Greyhounds |
0.0 |
0.0 |
10 |
|
Exemption of profits or gains from Stallions |
92.3 |
15.1 |
192 |
|
Exemption of profits or gains from Woodlands |
51.0 |
13.6 |
2,492 |
|
Exempt Patents (Section 234, TCA 1997) |
198.3 |
51.7 |
1,209 |
|
Totals |
1,299.2 |
452.6 |
18,111 |
|
Tax Incentive / Income Exemption 2009 |
Amount Claimed €m |
Assumed maximum tax cost €m |
Number of claimants |
|
Urban renewal |
233.8 |
93.1 |
3410 |
|
Town Renewal |
45.4 |
18.3 |
1,001 |
|
Seaside Resorts |
13.3 |
5.3 |
875 |
|
Rural Renewal |
70.0 |
28.0 |
2,653 |
|
Multi-storey car parks |
13.2 |
5.2 |
130 |
|
Living Over the shop |
4.1 |
1.7 |
66 |
|
Enterprise Areas |
5.4 |
2.1 |
118 |
|
Park and Ride |
2.0 |
0.8 |
20 |
|
Holiday Cottages |
34.7 |
13.9 |
786 |
|
Hotels |
263.2 |
102.1 |
1,906 |
|
Nursing Homes |
54.4 |
21.6 |
750 |
|
Housing for the Elderly/infirm |
6.8 |
2.8 |
145 |
|
Hostels |
0.73 |
0.3 |
14 |
|
Guest Houses |
0.24 |
0.1 |
8 |
|
Convalescent Homes |
1.3 |
0.5 |
28 |
|
Qualifying Private Hospitals |
30.5 |
12.5 |
346 |
|
Qualifying sports injury clinics |
3.6 |
1.5 |
67 |
|
Buildings Used for certain child care purposes |
30.8 |
12.5 |
527 |
|
Qualifying Mental Health Centres |
0.1 |
0.0 |
1 |
|
Student Accommodation |
48.3 |
19.1 |
751 |
|
Caravan Camps |
0.6 |
0.2 |
2 |
|
Mid Shannon Corridor Tourism Infrastructure |
0.6 |
0.2 |
2 |
|
Exemption of profits or gains from Greyhounds |
0.0 |
0.0 |
5 |
|
Exemption of profits or gains from Stallions |
2.0 |
0.4 |
32 |
|
Exemption of profits or gains from Woodlands |
48.2 |
14.4 |
3,570 |
|
Exempt Patents (section 234, TCA 1997) |
260.7 |
71.7 |
1,268 |
|
OtherTotals |
52.61,226.6 |
19.5447.8 |
63519,116 |
These figures do not take account of the application of the restriction of reliefs originally provided for in section 17 of Finance Act 2006 and which took effect from 1 January 2007.The restriction was extended by Section 23 Finance Act 2010. As the Deputy will be aware, virtually all of the area-based and property tax incentive schemes have ended and this year’s Finance Act provided for a cap on property-based Accelerated Schemes (in line with the tax life of the particular scheme) to be introduced from 1 January 2015.
Notes:
- The figures shown relate to the various reliefs/incentives and exemptions as specified in the 2008 and 2009 form 11 and CT1.
- There were concerns that in some instances the new, separately categorised data on property incentives may not have been correctly entered on the Tax returns. Revenue drew the attention of the relevant tax practitioner bodies to these deficiencies to rectify them in future returns and also increased awareness among its own staff involved in processing tax returns of the need to ensure, through closer examination of the returns, that they are correctly completed.
- The estimated costs have assumed tax foregone at the 41% rate in the case of income tax and 12.5% in the case of corporation tax. This means the figures shown correspond to the maximum Exchequer cost in terms of income tax and corporation tax. However, the actual Exchequer cost could be lower, particularly in relation to the exempt income items, as the income could be subject to deductions for allowable expenses and other costs thereby reducing the level of income that would be actually subject to tax.
- Some of the costs shown above are included in the costs shown for capital allowances and section 23 relief in Table IT6. However, exempt income included above is not part of capital allowances.
f) Note on reliefs in respect of which costs are not currently quantifiable or are negligible or are not identifiable within total aggregates.
Examples of this type of relief would include:
Relief from averaging of farm profits;
Exemption for income arising from payments in respect of personal injuries;
Exemption of certain payments made by Haemophilia HIV Trust;
Exemption of lump sum retirement payments;
Relief for allowable motor expenses;
Tapering relief allowable for taxation of car benefits in kind;
Reduced tax rate for authorised unit trust schemes;
Reduced tax rate for special investment schemes;
Exemption of certain grants made by Údarás na Gaeltachta;
Relief for investment income reserved for policy holders in life assurance companies;
Relief for various business related expenses such as staff recruitment, rent, legal fees, and other general expenses;
Exemption in certain circumstances on the interest on quoted bearer Eurobonds;
Exemption of payments made as compensation for loss of office;
Exemption of scholarship income
Exemption for income received under Scéim na bhFoghlaimeóirí Gaeilge.
259. Deputy Pearse Doherty asked the Minister for Finance the earnings cap for pensions contributions; and the estimated return to the Exchequer if the earnings cap was reduced to €75,000 and pensions tax reliefs then granted at 20%. [38292/12]
Amharc ar fhreagraI assume that the Deputy is referring to the current annual earnings cap of €115,000 which operates to limit the level of tax-relieved personal pension contributions in any one year. The annual earnings cap acts, in conjunction with age-related percentage limits of annual earnings, to put a ceiling on the annual amount of tax relief an individual taxpayer can obtain on pension contributions. A breakdown of the cost of tax relief on employee contributions to occupational pension schemes is not available by income tax rate, as tax returns by employers to the Revenue Commissioners of employee contributions to such schemes are aggregated at employer level. An historical breakdown is available by tax rate of the tax relief claimed on contributions to personal pension plans — Retirement Annuity Contracts (RACs) and Personal Retirement Savings Accounts (PRSAs) — by the self-employed and others, to the extent that the contributions have been included in the personal tax returns of those taxpayers. There is, therefore, only a limited statistical basis for providing definitive figures.
However, by making certain assumptions about the available information, the Revenue Commissioners inform me that the combined estimated full year yield to the Exchequer from reducing the current annual earnings cap of €115,000 to €75,000 and confining tax relief to the standard rate of 20% in respect of individual contributions to occupational pension schemes, RACs and PRSAs would be about €540 million.
260. Deputy Pearse Doherty asked the Minister for Finance the estimated once-off saving for the Exchequer by abolishing the ability of incorporated bodies to claim trading losses against profits made in previous years for the purposes of tax returns. [38293/12]
Amharc ar fhreagraThe availability of relief for losses incurred in a business is a well-established feature of the corporation tax regime, which is in recognition of the fact that a business cycle runs over several years and that it would be unbalanced to tax profits in one year and not allow losses in another. Under Irish tax legislation a company incurring a trading loss in an accounting year can carry that loss back for offset against profits in the immediately preceding year. The carry back of a trading loss is limited to one accounting year back and there must be profits in that year for the provision to be of use to a company. A trading loss in an accounting year may also be carried forward for offset against trading profits of the same trade in subsequent years.
I am informed by the Revenue Commissioners that the potential saving to the Exchequer, if future claims by incorporated bodies for losses to be offset against previous year’s profits were to be disallowed, would depend on the amounts of losses incurred by companies and the extent to which there are profits in the preceding accounting year against which such losses would otherwise be available for set-off. It is not possible to anticipate what these would be.
By way of illustrating this latter point, data from corporation tax returns for 2009 and 2010 (the latest years available) show that for 2009 the amount of trading losses carried back for offset against profits earned in a previous year was €868m while the comparable figure for 2010 was a much lower figure in the region of €445m. The actual saving to the Exchequer in respect of those years under the Deputy’s proposal would depend on the tax rate applicable to the profits of the companies concerned but assuming that this was the standard 12.5% rate, the savings under the proposal would have amounted to about €109m in 2009 and about €56m in 2010. The Deputy should note, however, that the estimated savings for 2009 and 2010 are not necessarily indicative of what the savings might be for future years. Also, since under the proposal companies could continue to carry forward losses for offset against future profits, the estimated Exchequer savings outlined would be temporary in nature.
I should add that losses incurred in a trade are a fact of business life and the provision of relief for such losses is a standard feature of our tax code and that of all other countries in the OECD. It would be difficult to justify taxing business income without taking due account of business losses.
261. Deputy Pearse Doherty asked the Minister for Finance the estimated savings for the Exchequer in 2013 and in a full year from standardising tax reliefs. [38294/12]
Amharc ar fhreagraI am advised by the Revenue Commissioners that the deductions and reliefs which are allowable for tax at an individual’s marginal rate of income tax and for which estimates of cost can be provided are set out below together with estimated costs for the year 2009, the most recent year for which the necessary estimates are available. If relief for these deductions and reliefs was confined to the standard rate of income tax the saving to the Exchequer could be of the order of €1,000 million. This estimate does not take into account any possible behavioural change on the part of taxpayers as a consequence of such a change or the economic effect of such a change. This applies in particular to the BES, Film Relief and Capital Allowances regime. The standard rating of employee pension reliefs would also have an impact on workers’ take home pay.
It should be noted that there have been changes since this period, i.e. some schemes have been abolished or modified and others have been introduced. For instance, as the Deputy will be aware, the BES was re-launched as the Employment and Investment Incentive, with changes to the amount of relief payable and types of companies that can qualify.
|
Tax Relief Provision |
Total 2009 Cost |
Saving if Standard Rated |
|
€m |
€m |
|
|
Person Taking Care of Incapacitated Taxpayer |
5.9 |
2.4 |
|
Health Expenses (Nursing Homes) |
23.1 |
6.1 |
|
Contributions Under Permanent Health Benefit Schemes, after Deduction of Tax on Benefits Received |
3.9 |
1.6 |
|
Employees' Contributions To Approved Superannuation Schemes |
729.0 |
345.2 |
|
Retirement Annuity Premiums |
237.2 |
105.6 |
|
Personal Retirement Savings Accounts |
77.0 |
26.5 |
|
Interest paid relating to borrowings for purposes such as acquiring an interest in a company or partnership or to pay death duties |
26.5 |
11.6 |
|
Expenses Allowable to Employees under Schedule E |
73.7 |
27.4 |
|
Retirement Relief for certain Sports Persons. |
0.2 |
0.1 |
|
Revenue Job Assist allowance |
0.3 |
0 |
|
Allowance for seafarers |
0.2 |
0 |
|
Investment in Corporate Trades (BES) |
25.6 |
13.1 |
|
Investment in Seed Capital |
2.9 |
1.2 |
|
Stock Relief |
2.0 |
0.6 |
|
Relief for expenditure on significant buildings and gardens |
4.6 |
2.2 |
|
Donation of Heritage items |
0.7 |
0.6 |
|
Donation of Heritage property to the Irish Heritage Trust |
0 |
0 |
|
Donations to Approved Bodies (Income Tax only) |
51.11 |
19.8 |
|
Donations to Sports Bodies (Income Tax only). |
0.6 |
0.2 |
|
Capital Allowances (Income Tax only) |
1,004.9 |
395.9 |
|
Rented Residential Relief -Section 23 |
46.9 |
24.0 |
|
Investment in Films |
42.0 |
25.6 |
|
Total |
2,358.3 |
1,009.7 |
262. Deputy Pearse Doherty asked the Minister for Finance if he will list remaining property tax reliefs; if he will state the legacy cost of these reliefs on the Exchequer and the estimated return for the Exchequer of abolishing these reliefs in 2013 and in a full year. [38295/12]
Amharc ar fhreagraIt is assumed that the Deputy is referring to the cost, in terms of tax forgone, of the following two property based tax incentive schemes that remain in the tax code: Mid-Shannon Corridor Tourism Infrastructure Investment (only 80% of expenditure can qualify in certain areas) and Qualifying Specialist Palliative Care Units (subject to Commencement Order). I am informed by the Revenue Commissioners that based on information regarding the cost of the Mid-Shannon Scheme, which has been received and collated for the tax year 2010, the latest year for which data is available, the annual yield to the Exchequer from the abolition of this relief could be in the region of €0.2 million. The Palliative Care Units Scheme was not commenced. All other such schemes have been terminated, subject to transitional arrangements for certain schemes where projects were already in the pipeline. However, due to their nature these reliefs continue to entail ongoing costs on the Exchequer in terms of tax foregone.
I am informed by the Revenue Commissioners that the information provided in tax returns on the annual amounts of claims for property based tax reliefs is not sufficiently detailed to provide a basis for deriving an estimate of the remaining legacy cost to the Exchequer. I am not therefore in a position to provide the information requested by the Deputy related to savings. The estimated annual cost to the Exchequer of all “legacy” property-related tax schemes in 2010 was €327 million.
263. Deputy Pearse Doherty asked the Minister for Finance the estimated return to the Exchequer from introducing a tax on online gambling of 5%. [38296/12]
Amharc ar fhreagraIt was announced in Budget 2011 that the necessary arrangements are being made to ensure that bets placed on the internet by domestic punters are subject to the same level of betting duty as applies to high street betting shops. This will serve to broaden the tax base and increase betting duty receipts. The Finance Act 2011 provides for the taxation of bets that remote bookmakers enter into with persons in the State. This means, for example, that a business which engages in online bookmaking and which accepts bets from people in this country will be liable for betting duty on those bets, irrespective of where that business is based. The existing betting duty (1%) will be applied to such bets. The Finance Act also provides for the taxation of Betting Exchanges under the new arrangements; however the calculation of the tax will take account of their particular business model, in other words a 15% tax on the commission charged. In addition, excise duties are being applied to the granting and renewal of remote bookmakers’ and remote betting intermediaries’ licences.
The Betting (Amendment) Bill, which was published in July, will establish the regulatory framework for these licences. The tax changes provided for in the Finance Act can only be implemented once the Betting (Amendment) Bill is enacted.
It is estimated that the full year yield from the taxation of remote betting would be around €20 million. Therefore a straight line calculation of the 5% suggested by the Deputy would suggest a yield of €100 million. However this would not take account of the impact of such a rate on betting activity or any other variables.
264. Deputy Pearse Doherty asked the Minister for Finance the estimated return to the Exchequer from increasing the tax on betting shop profits from 1% to 5%. [38297/12]
Amharc ar fhreagraIt is assumed that the Deputy is referring to an increase in the rate of Betting duty, which currently stands at 1% and which is on top of other taxes such as corporation tax and income tax as appropriate. I am informed by the Revenue Commissioners that if the rate was increased from 1% to 5%, the yield would be in the region of €135m in a full year. However, this is a straight line calculation and does not take account of the impact of such a rate on betting activity or any other variables.
265. Deputy Pearse Doherty asked the Minister for Finance if he has examined the potential for a wealth tax; and the estimated return to the Exchequer from a 1% wealth tax on individual wealth in excess of €1 million. [38298/12]
Amharc ar fhreagraThe Government does not propose at this time to introduce a wealth tax, although all taxes and potential taxation options are constantly reviewed. To estimate the potential revenue from such a wealth tax, we would need to identify the wealth held by individuals. I am informed by the Central Statistics Office that the institutional sector accounts do not give an indication of the number of households or persons classified by the categories of wealth they hold. These statistics are based on aggregate information collected from financial institutions and do not contain the demographic details which would enable such a breakdown of the statistics. So while the CSO’s institutional sector accounts show that households held c. €126 billion on deposit in 2010, this is not broken down by income or wealth categories.
However, I understand that, following discussions between the Department of Public Enterprise and Reform, the CSO and the Central Bank, the CSO has commenced a “Household Finance and Consumption Survey”, which will include, inter alia , a survey of wealth. The first results of this survey will be available in 2014. The data to be collected by the CSO as part of this survey is primarily targeted as general information on the financial situation and behaviour of households. I am informed by the Revenue Commissioners that they have no statistical basis for compiling estimates in relation to a potential annually recurring tax on wealth. It is therefore not possible to provide the information requested by the Deputy on the potential return from a 1% wealth tax on individual wealth in excess of €1 million.
266. Deputy Pearse Doherty asked the Minister for Finance if a preliminary impact assessment, including an assessment of the cost to the Exchequer of the measures contained within, of the 2012 Finance Act has been undertaken; and if so, if he will state its findings. [38299/12]
Amharc ar fhreagraThe Budget Book published on December 6th contained a full assessment of the yield and cost on each of the measures proposed. There was no substantial change in the Finance Act compared with the Budget Statement in December. Finance Act 2012 contained no major new expenditure item. Indeed, many of the individual measures in the Act, which were not specifically referred to in the Budget, are technical in nature. However if the Deputy would care to highlight measures in the Act which are of particular interest to him, I will see that information relating to these is provided.
