Written Answers Nos. 40-48
40. Deputy Michael McNamara asked the Minister for Finance the funding East Clare Community Co-Op Society Ltd has received from his Department in 2010, 2011, 2012 and to date in 2013; and if he will make a statement on the matter. [53406/13]
Amharc ar fhreagraNo funding has been received by the East Clare Community Co-Op Society Ltd from my Department in 2010, 2011, 2012 and 2013.
41. Deputy Jack Wall asked the Minister for Finance if changes are permitted to a relevant tax to ensure employment opportunities are not prevented (details supplied) in County Kildare; and if he will make a statement on the matter. [53431/13]
Amharc ar fhreagraI am advised by the Revenue Commissioners that the relevant taxes referred to by the Deputy are Customs Duties and VAT at Import. It is not open to Revenue to vary the rate of tax/duty involved. Additionally, while certain reliefs and exemptions apply in respect of both of these taxes/duties, none apply in the scenario outlined by the Deputy.
42. Deputy Finian McGrath asked the Minister for Finance if he will send the local property tax bill to a person (details supplied) in Dublin 9. [53436/13]
Amharc ar fhreagraI am informed by Revenue that a key aspect of the work undertaken in regard to Local Property Tax (LPT) was the development of a comprehensive register of residential properties in the State. During the building of the Property Register some matching difficulties were encountered when consolidating the various Government and non-Government data sources used, and in a small number of cases the linkage of properties to their relevant owners was not correct.
As part of its comprehensive LPT communications strategy, Revenue clearly stated that errors in the compilation of the Property Register were inevitable given the scale of the task and requested that anybody who received incorrect information in regard to their properties make contact via the LPT Helpline as soon as possible. Revenue stressed that non-engagement would lead to individuals being incorrectly made liable for LPT and as a consequence prone to enforcement activity, including mandatory deduction at source from salary or certain Government payments or pensions.
In regard to the case to which the Deputy refers, an LPT Return in respect of 2013 incorrectly issued to the daughter of the person in question in March 2013. The Return was subsequently sent back to Revenue indicating that she (the daughter) was ‘not the liable owner’, but no details were provided confirming the identity of the correct owner. The daughter also returned a compliance reminder letter that issued to her on 18 October again stating that she was ‘not the liable owner’ and also again making no reference to the correct owner.
Revenue has confirmed to me that it has recently made contact with the person to confirm the liable person in respect of the property in question and on the basis of the conversation has removed the daughter from the Property Register. The person is now correctly linked to the property and has also selected her payment options in respect of both 2013 and 2014.
43. Deputy Terence Flanagan asked the Minister for Finance the position regarding the exit from the bailout (details supplied); and if he will make a statement on the matter. [53439/13]
Amharc ar fhreagraAt the outset it should be noted that the exit from the EU-IMF Programme of Assistance without a precautionary credit line will have no bearing on whether a bank is likely to be bailed in or not in the future.
The rules relating to bail-in are set out in the proposed EU Directive on Bank Recovery and Resolution (BRRD), which is currently at an advanced stage of negotiation with the European Parliament. The BRRD proposal provides a common framework of rules and powers to help EU countries manage arrangements to deal with failing banks at national level as well as cross-border banks, whilst preserving essential bank operations and minimising taxpayers' exposure to losses.
There are three pillars to the BRRD framework to facilitate a range of appropriate actions by authorities:
- Preparatory and preventative measures including reinforced supervision and robust recovery and resolution planning for major institutions;
- Early intervention which would include supervisory powers, implementing recovery plans and appointing a special manager; and
- Resolution tools including sale of business, bridge bank and asset separation tools and also the use of bail-in mechanisms.
The BRRD will apply to all 28 Member States and will ensure that losses incurred by a credit institution are allocated to its shareholders and creditors in accordance with a pre-defined hierarchy of claims. This is an important means of ensuring that a bank’s losses are absorbed by those who fund its activities and not taxpayers.
The proposed directive also includes a proposal for a resolution fund. This fund can be used for operational purposes, such as the provision of capital to a bridge bank and in some cases it can be used to provide solvency support to an institution in resolution. The resolution fund would be funded by the wider banking industry and in a banking union context this will be set up at a European level, thereby increasing the amount of funding available.
In relation to the events in Cyprus earlier this year, I have said before that it was an exceptional case which took place in the absence of a clearly defined resolution regime. The BRRD now addresses this and provides for a common framework for resolution for all EU Member States. This therefore should reduce ad-hoc solutions to bank crises going forward.
44. Deputy Terence Flanagan asked the Minister for Finance his plans to reinstate tax relief at source on health insurance policies, in view of the fact that many customers will be forced to cancel their policies as a result of changes announced in budget 2014; and if he will make a statement on the matter. [53440/13]
Amharc ar fhreagraThe position is as I stated in my Budget day speech, that from 16 October 2013, tax relief for medical insurance premiums has been restricted to the first €1,000 per adult and the first €500 per child insured. Any portion of premium paid in excess of these ceilings will no longer qualify for tax relief. The current system of income tax relief for medical insurance premiums is provided at source at the standard rate of income tax. Therefore, the State was paying 20% of the cost of all medical insurance premiums.
The cost of Income Tax relief in respect of medical insurance has increased significantly in recent years, estimated at €404 million in 2011, €448 million in 2012 and €500 million in 2013. Despite the increasing cost of the relief, the numbers insured are estimated to have reduced by approximately 170,000 over the same period, while at the same time the level of medical cover has decreased on some policies. Against this background the increase in costs is unsustainable. If the relief were to remain unchanged and the trend was to continue, the cost would increase to approximately €1 billion by 2020.
Currently, the tax system is supporting those who can afford private medical insurance to the level of half a billion euros per annum. Effectively that means that those taxpayers who could never afford private health insurance, or who have had to give up their policies due to personal circumstances, are providing financial support via the tax system to those individuals who can afford such insurance.
It should be noted that the Commission on Taxation in its 2009 report recommended the retention of medical insurance relief but that it should be limited. The introduction of an upper ceiling on the amount of medical insurance premiums that will qualify for tax relief achieves this recommendation.
I am advised by the Revenue Commissioners that based on 2012 data, the most up to date data available, it is estimated that up to 577,000 policy holders, which provide cover for 1.1 million individuals, may be affected by this measure. The Revenue estimate is based on an analysis carried out on the annual returns and the gross premium prices (i.e. before tax relief at source is applied) submitted by the Health Insurers in respect of the 2012 tax year. However, it should be noted that many will only be affected marginally, depending on the cost of the policies that individuals purchase.
The new ceilings will ensure continuing support via the tax system for those who purchase medical insurance policies, while reducing Exchequer exposure to more expensive policies. In addition, individuals can of course opt for less expensive policies and therefore avoid the impact of this measure entirely.
I have no plans to reverse my decision to restrict tax relief in respect of medical insurance premiums.
45. Deputy Bernard J. Durkan asked the Minister for Finance the basis on which the Revenue Commissioners have contacted the employers of a number of non-EU nationals employed here, in some instances for up to ten years, occasionally employed by State agencies, who are meeting their statutory requirements in respect of PRSI, income tax and all of their obligations but who, due to lack of a permit or update of residency status, are now being informed by their employer, on the instructions of the Revenue Commissioners, to the effect that their employment must cease notwithstanding the fact that many such persons hold pivotal positions in the workforce, have made a contribution to society and continue to do so; the way it has been determined that their employment is illegal but that the payment of their taxes and PRSI contributions was accepted and that subsequent employers employed such persons in good faith on the basis that they had a good employment record; and if he will make a statement on the matter. [53445/13]
Amharc ar fhreagraI am advised by the Revenue Commissioners that the question of whether an employee has a work permit is not relevant to the operation of the tax system and that Revenue does not advise employers to cease employing employees on the basis of their residency or work permit status. If the Deputy has information to the contrary he should forward the details to Revenue.
46. Deputy Finian McGrath asked the Minister for Finance if the pension levy is here to stay or if it will end soon. [53451/13]
Amharc ar fhreagraI announced in my Budget 2014 speech that the 0.6% Pension Fund Levy introduced to fund the Jobs Initiative in 2011 will be abolished from the 31st of December 2014. I will however, introduce an additional levy on pension funds at 0.15% to, among other things, continue to help fund the Jobs Initiative. The additional levy, within the existing legal framework, will apply to pension fund assets in 2014 and 2015.
47. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 275 of 21 May 2013, if he will confirm that the proceeds of the sale of Bank of Ireland preference shares will accrue to the National Pension Reserve Fund, if the proceeds will then form part of the resources available for the Ireland Strategic Investment Fund which is being established; and if he will make a statement on the matter. [53454/13]
Amharc ar fhreagraI can confirm to the Deputy that I have given instructions that the proceeds arising from the Bank of Ireland preference shares transaction should remain with the National Pensions Reserve Fund for the time being. No decision has yet been made whether the proceeds will form part of the resources of the new Ireland Strategic Investment Fund. Further consideration will be given as to how best to utilise the proceeds having regard to the NTMA’s debt management plan and the future profile of our cash balances.
48. Deputy Seán Kenny asked the Minister for Finance his views regarding the cost of kerosene and gas-oil supplied as home heating fuel; if it has increased or decreased during the years 2010, 2011, 2012 and to date in 2013; the reasons for any increase or decrease; and if he will make a statement on the matter. [53466/13]
Amharc ar fhreagraAs Minister for Finance I have no jurisdiction or control over market pricing of fuel. I have responsibility only for the tax element of fuels.
