Tuesday, 2 Jul 2013

Written Answers Nos. 235-255

Tax Credits

Ceisteanna (235)

Pearse Doherty

Ceist:

235. Deputy Pearse Doherty asked the Minister for Finance the cost to the Exchequer of increasing the PAYE tax credit by €5 per week for all income earners below €60,000 per annum. [31807/13]

Freagraí scríofa

Minister for Finance

I am advised by the Revenue Commissioners that the estimated full year yield to the Exchequer, estimated by reference to 2013 incomes, of increasing the employee (PAYE) tax credit in the manner mentioned by the deputy would be of the order of €235 million. This estimate is derived from the Revenue tax-forecasting model using actual data for the year 2010 adjusted as necessary for income and employment trends in the interim. It is therefore provisional and likely to be revised. It should also be noted that a married couple who has elected or has been deemed to have elected for joint assessment is counted as one tax unit.

Question No. 236 answered with Question No. 111.

Tobacco Smuggling

Ceisteanna (237)

Robert Dowds

Ceist:

237. Deputy Robert Dowds asked the Minister for Finance if he will provide an update on the number of tobacco seizures in each month since January 2011; and the amount of cigarettes and tobacco seized in each month since January 2011. [31811/13]

Freagraí scríofa

Minister for Finance

I am advised by the Revenue Commissioners that the monthly seizures of cigarettes and tobacco in 2011 and 2012, and this year to 31 May, are as detailed in the following tables.

2011

Month	Cigarette Seizures	Number of Cigarettes Seized	Tobacco Seizures	Quantity Seized (Kilograms)
January	789	10,939,140	111	472
February	822	8,091,205	134	133
March	1,155	10,794,099	132	210
April	777	5,435,572	73	121
May	1,133	7,848,277	128	321
June	831	20,834,846	133	205
July	752	11,029, 341	109	2,724
August	934	3,087,755	172	2,497
September	997	14,093,544	165	2,840
October	847	2,674,637	118	714
November	867	2,380,390	95	283
December	684	11,882,143	131	638

2012

Month	Cigarette Seizures	Number of Cigarettes Seized	Tobacco Seizures	Quantity Seized (Kilograms)
January	654	1,625,944	116	621
February	731	2,139,561	93	336
March	723	1,870,649	105	306
April	652	43,068,330	95	137
May	819	7,601,016	115	773
June	696	2,110,869	126	272
July	676	8,379,138	160	263
August	618	1,315,452	103	273
September	738	13,274,574	141	360
October	663	9,612,366	117	281
November	724	2,621,542	127	1,392
December	417	1,986,889	97	262

2013

Month	Cigarette Seizures	Number of Cigarettes Seized	Tobacco Seizures	Quantity Seized (Kilograms)
January	507	1,496,741	94	325
February	494	1,255,479	125	536
March	551	1,946,456	98	248
April	457	990,767	94	104
May	548	4,327,337	114	1,058

Property Taxation Application

Ceisteanna (238)

Martin Heydon

Ceist:

238. Deputy Martin Heydon asked the Minister for Finance if the local property tax is deductible as an expense against rental income; the plans and progress that have been made in this regard; and if he will make a statement on the matter. [31816/13]

Freagraí scríofa

Minister for Finance

The inter-departmental group, chaired by Dr Don Thornhill, which considered the design of a property tax (the “Thornhill Group”) recommended that the Local Property Tax (LPT) paid in respect of a rented property should be deductible for income tax or corporation tax purposes, in a similar manner to commercial rates. The Group recognised the considerable pressures on the public finances and the need to bridge the gap between expenditure and revenue, and therefore suggested that consideration be given to phasing in deductibility over a period of years. The Group also considered that it is for Government, having regard to the prevailing budgetary situation, to decide on the time span for phasing-in deductibility and on what percentage of LPT to allow as a deduction from gross rents for tax purposes. The Government accepted the recommendation of the Thornhill Group on this matter but has not considered the manner or the timing in which this will happen.

Questions Nos. 239 and 240 answered with Question No. 98.

Question No. 241 answered with Question No. 172.

National Treasury Management Agency Remuneration

Ceisteanna (242)

Pearse Doherty

Ceist:

242. Deputy Pearse Doherty asked the Minister for Finance if any bonuses were paid to National Treasury Management Agency staff in 2011 and 2012, and if so, to whom and the amount of each bonus. [31828/13]

Freagraí scríofa

Minister for Finance

The amounts of performance-related pay paid to staff of the National Treasury Management Agency (NTMA) and the number of staff in receipt of such payments in 2011 and 2012 are set out in the table below:

Year	Total Amount of Performance-related pay	Number of Staff who received Performance-related pay
2011	€62,610	5
2012	€43,100	6

The NTMA employed a total of 500 staff at the end of 2012. The staff who received performance-related payments were key personnel in various business units across the NTMA. No performance-related payments were made to members of the NTMA senior management team in respect of 2011 and 2012.

Question No. 243 answered with Question No. 98.

EU Directives

Ceisteanna (244)

Andrew Doyle

Ceist:

244. Deputy Andrew Doyle asked the Minister for Finance if he will outline measures taken at the June ECOFIN meeting to secure protections against excessive financial speculation in the food and other commodity derivative markets through the review of the Markets in Financial Instruments Directive; the progress that has been made on this issue at administrative level; and if he will make a statement on the matter. [31934/13]

Freagraí scríofa

Minister for Finance

On June 13 2013, the Irish Presidency reached a breakthrough in talks at Council level on the MiFID II and MiFIR proposals which aim to make financial markets more efficient, resilient and transparent, and to strengthen the protection of investors. The achievement of a Council General Approach, which was endorsed at Ecofin on 21 June 2013, signals a significant step forward by the EU towards protecting against excessive financial speculation in the food and other commodity derivative markets.

The regulation of derivative trading in the EU has been part of Council discussions within the EU since September 2010 when the Commission published its proposal for the European Market Infrastructure Regulation (EMIR) to regulate this market in the context of over-the-counter (OTC) trades. This EU Regulation, which is directly applicable in all Member States, entered into force on 16 August 2012.

In particular, the Council text of MiFID II contains important provisions relating to position management, position limits and product intervention. These provisions are in respect of all financial instruments, including commodity derivatives, and have the purpose of providing regulators with tools to avoid excessive speculation in financial instruments, including commodity derivatives. Competent authorities will be obligated to establish and apply position limits on the size of a position in a commodity derivative which a person can have over a specified period of time.

Furthermore, competent authorities will have product intervention powers whereby they may prohibit or restrict trading of financial instruments or prohibit or restrict investment activities when there is a threat to the orderly functioning and integrity of financial markets or commodity markets. The European Securities and Markets Authority (ESMA) will have contingency and coordination powers in position management and product intervention to ensure consistent application across all Member States. In the exercise of its powers, ESMA will also have to consult public bodies competent for the oversight, administration and regulation of physical agricultural markets.

EMIR and MiFID II combined are expected to result in a tighter regime for all derivatives, including food securities, whether traded OTC or through exchanges. The measures are intended to keep pace with trends in derivatives trading, in line with G20 commitments made at the 2009 Pittsburgh summit. Council General Approach will be progressed further by the Lithuanian Presidency when they begin negotiations with the European Parliament at Trilogues. We will continue to monitor developments on this file throughout the legislative process.

Questions Nos. 245 and 246 answered with Question No. 111.

Bank Guarantee Scheme Bond Repayments

Ceisteanna (247)

Michael McGrath

Ceist:

247. Deputy Michael McGrath asked the Minister for Finance the losses imposed on subordinated bondholders in covered institutions from liability management exercises in each year since 2008; the number of legal actions currently under way against the State in respect of these actions; and if he will make a statement on the matter. [31963/13]

Freagraí scríofa

Minister for Finance

The following table details the liability management exercises.

Liability Management Exercises

-	2008	2009	2010	2011	2012
-	€m	€m	€m	€m	€m
Total Subordinated Bonds:
BoI(1)
Consideration2	600	700*	3,300*	800*	N/a
Nominal Value	600	1,700	4,700	2,300	N/a
Average Discount	0%	59%	30%	65%	N/a
AIB (incl EBS)
Consideration	200	1,366	1,842	1,052	N/a
Nominal Value	200	2,470	2,377	4,882	N/a
Average Discount	0%	34.97%	37.80%	72.58%	N/a
Permanent TSB
Consideration	162	N/a	N/a	455*	N/a
Nominal Value	162	N/a	N/a	1,459	N/a
Average Discount	0%	N/a	N/a	69%	N/a
IBRC (incl INBS)3	Ended 30 Sep 2008	Ended 31 Dec 2009	Ended 31 Dec 2010	Ended 31 Dec 2011	Ended 31 Dec 2012
Consideration	72	895	301	34	N/a
Nominal Value	102	2,784	1,890	174	N/a
Average Discount	29.4%	67.8%	84.1%	80.5%	N/a

*Includes amounts redeemed at par

1) BOI figures are rounded to their nearest hundred million.

2) Consideration provided as part of the Liability Management Exercises was in the form of cash, equity and other debt instruments.

3) Foreign exchange rates are as at end financial period.

The purpose of the Liability Management Exercise (LME) transactions was to create additional core tier 1 capital and to strengthen the quality of the capital base of the Banks.

Since this Government came to into power, we reduced the cash required from the State by €5.8bn, from burden-sharing with subordinated bondholders. The contribution from burden-sharing with bondholders amounts to approximately €15bn since the banking crisis began.

There are currently no legal actions under way against the State in respect of these actions.

Departmental Staff Numbers

Ceisteanna (248, 249)

Pearse Doherty

Ceist:

248. Deputy Pearse Doherty asked the Minister for Finance the number of senior staff in his Department who were in the Department at the time of the banking guarantee in 2008; and if he will make a statement on the matter. [31964/13]

Pearse Doherty

Ceist:

249. Deputy Pearse Doherty asked the Minister for Finance the number of senior staff in his Department, who were there at the time of the banking guarantee and who are in the same positions they held at the time. [31966/13]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 248 and 249 together.

At the end of 2008 the number of senior staff serving in my Department was as follows:

Senior Staff	Nos.
Secretary General Finance	1.00
Secretary General PSMD	1.00
Second Secretary	3.00
Assistant Secretary	14.00
Principal	56.50

Since 2008 my Department has changed its organisational structure and its deployment of staff in response to recent events in the economy and the financial system. It has demonstrated considerable flexibility in dealing with these issues.

A Resource and Priority Review for the Department was recently undertaken by the Management Advisory Committee (MAC). Our objectives and resources are reviewed on an on-going basis and the context of this review was the significant block of work reflected in the Department, business plans, particularly, as we draw to the end of the Presidency and move into the earlier budgetary cycle this year and the parallel development of the Economic Plan present a perfect time to undertake this Resource and Priority Review. The intention is to have a further planning review of resources and priorities towards the end of this year in preparation for 2014.

Tax Code

Ceisteanna (250)

Finian McGrath

Ceist:

250. Deputy Finian McGrath asked the Minister for Finance if he will give a commitment to not taxing maternity benefit; and if he will support the Commission on Taxation on this issue. [31974/13]

Freagraí scríofa

Minister for Finance

The position is, as I have stated on many occasions in the House, that from the 1st of July 2013, Maternity Benefit will be treated as taxable income. The underpinning legislation for this measure was contained in the Finance Act 2013, which was passed by the Oireachtas and signed into law on 27 March 2013.

Revenue Commissioners Investigations

Ceisteanna (251)

Joe Carey

Ceist:

251. Deputy Joe Carey asked the Minister for Finance the extent to which the cash purchase of housing or other properties is monitored by the Revenue Commissioners to determine the origin of the cash; and if he will make a statement on the matter. [32001/13]

Freagraí scríofa

Minister for Finance

I am informed by the Revenue Commissioners that they have available to them a range of information sources from which they can monitor cash purchases of houses and other real estate which allows the Commissioners determine whether any tax issues arise from any such cash transactions. Under Section 42 of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 all designated bodies (including all financial institutions) are required to report to An Garda Síochána and the Revenue Commissioners all suspicious transactions, including any unusually large cash movements. Similarly, any solicitors or other practitioners who execute property transfer instruments are also designated persons for the purposes of the money laundering legislation and must satisfy themselves as to the source of purchase monies in drawing up the transfer instrument and report anything untoward to the Gardaí and to Revenue.

In addition, citizens can, and do, report directly to Revenue instances of unusually high amounts of cash used by individuals in transactions and Revenue reviews all such useful information supplied. This affords all citizens an opportunity to assist in combatting possible shadow economy, money laundering or other nefarious activities.

I am further advised that the Revenue Commissioners audit and compliance programmes are under constant review to ensure that they are focussed on the areas of greatest risk, with a specific focus on those sectors that traditionally have been susceptible to shadow economy activity specifically cash businesses, such as the hospitality sector, including bars, nightclubs, fast-food/restaurants and entertainment, and white collar cash activities, such as doctors, dentists, solicitors, accountants, engineers etc. The Commissioners recognise that a use to which undeclared cash can be put is to purchase properties and Revenue’s risk systems are geared to identify possible instances of such behaviour.

To facilitate and enhance this approach, Revenue has a well established computerised Risk Evaluation Analysis and Profiling (REAP) system. This contains large amounts of data that has been sourced directly from taxpayers via their tax returns as well as information received from a wide range of third parties. As the Commissioners administer the Stamp Duties regime, they also have access to details of all real property sales, purchases and voluntary transfers in the State and this data is also fed into the REAP system.

While REAP ranks the full taxpayer population in terms of risk, it also facilitates the selection of individual cases based on single or multiple business rules. One such rule identifies cases where significant capital expenditure has been incurred, specifically the purchase of houses and other real property, which is out of line with the person’s visible or declared means. Additional data sources available to Revenue that would help identify whether a property was purchased using loans from financial institutions include the Tax Relief at Source system as well as information on borrowings returned by taxpayers in their tax returns. In due course, Local Property Tax data will be analysed to identify property ownership patterns which may be further indicators of risk. I am satisfied that the Revenue Commissioners have a very strong focus on the risk to tax compliance posed by all aspects of the cash economy and have a range of programmes in place to manage the tax risks involved.

Question No. 252 answered with Question No. 111.

Questions Nos. 253 to 255, inclusive, answered with Question No. 98.