Written Answers Nos. 217-243
217. Deputy Pearse Doherty asked the Minister for Finance the partial and full-year revenue that would be raised for the Exchequer by reducing the earnings cap for pension contributions from €115,000 to €70,000. [31237/14]
Amharc ar fhreagra218. Deputy Pearse Doherty asked the Minister for Finance the partial and full-year revenue that would be raised for the Exchequer by standardising the rate of relief awarded in respect of pension contributions. [31238/14]
Amharc ar fhreagra219. Deputy Pearse Doherty asked the Minister for Finance the partial and full-year revenue that would be raised for the Exchequer by standardising the rate of relief awarded in respect of pension contributions, excluding those of public sector workers. [31239/14]
Amharc ar fhreagra220. Deputy Pearse Doherty asked the Minister for Finance the partial and full-year revenue that would be raised for the Exchequer by reducing the earnings cap for pension contributions from €115,000 to €70,000 and standardising the rate of tax relief awarded in respect of pension contributions. [31240/14]
Amharc ar fhreagra221. Deputy Pearse Doherty asked the Minister for Finance the partial and full-year revenue that would be raised for the Exchequer by reducing the earnings cap for pension contributions from €115,000 to €70,000 and standardising the rate of tax relief awarded in respect of such contributions, excluding those made by public sector workers. [31241/14]
Amharc ar fhreagra222. Deputy Pearse Doherty asked the Minister for Finance the partial and full-year revenue that would be raised for the Exchequer by reducing the earnings cap relating to pension contributions from €115,000 to €70,000 and standardising the rate of relief awarded in respect of such contributions for those with salaries in excess of €50,000 and €60,000, respectively, per annum. [31242/14]
Amharc ar fhreagra223. Deputy Pearse Doherty asked the Minister for Finance the partial and full-year revenue that would be raised for the Exchequer by reducing the earnings cap relating to pension contributions from €115,000 to €70,000 and standardising the rate of relief awarded in respect of such contributions for those in the private sector with salaries in excess of €50,000 and €60,000, respectively, per annum, and excluding those contributions made by public sector workers. [31243/14]
Amharc ar fhreagra224. Deputy Pearse Doherty asked the Minister for Finance the partial and full-year revenue that would be raised for the Exchequer by standardising the rate of relief awarded in respect of all pension contributions for those with salaries in excess of €50,000 per annum. [31244/14]
Amharc ar fhreagra226. Deputy Pearse Doherty asked the Minister for Finance the partial and full-year revenue that would be raised for the Exchequer by increasing the imputed distribution rate for ARFs and PRSAs by 1% in both bands under and over €2 million, bringing the rates to 6% and 7%, respectively. [31246/14]
Amharc ar fhreagraI propose to take Questions Nos. 217 to 224, inclusive, and 226 together.
In the time available, having regard to the volume of questions, Revenue are not in a position to provide the information sought. However, I will arrange for the information to be supplied directly to the Deputy.
225. Deputy Pearse Doherty asked the Minister for Finance the partial and full-year revenue that would be raised for the Exchequer by reducing the tax exemption for lump sum pension payments on retirement to €80,000 and taxing the balance at the marginal rate. [31245/14]
Amharc ar fhreagraThe following arrangements currently apply to retirement lump sums paid under pension arrangements approved by the Revenue Commissioners. Lump sum amounts up to €200,000 are paid free of tax. They are also paid free of USC. The portion of a lump sum between €200,001 and €575,000 is taxed on a ring-fenced basis at 20%. This means that no tax credits or other tax reliefs can be set against this portion of the lump sum. No USC is chargeable. Any amount of a lump sum in excess of €575,000 is taxed at the individual's marginal rate of tax (credits and other tax reliefs are available). In this instance, USC is chargeable on the excess. These amounts are lifetime amounts with prior lump sums aggregating with later lump sums.
As there is no general requirement for data on retirement lump sums to be returned to my Department or to the Revenue Commissioners, I am not in a position to provide definitive figures on the Exchequer impact of reducing the tax-free retirement lump sum amount from €200,000 to €80,000. Furthermore, details of the marginal rate of income tax that each individual would pay on a taxable lump sum pension payment in the scenario outlined in the Deputy's question are not available. Based on broad assumptions and an extrapolation of certain available data in relation to the public service, it is estimated that the additional tax yield from taxing lump sums of €80,000 and over at the higher income tax rate of 41% could be about €20 million in a full year.
I have no data on which to provide a similar estimate in relation to the private sector. I should point out, however, that one significant difference between public sector and private sector pension schemes is that private sector schemes invariably allow scheme members the option of commuting part of their pension fund for a tax-free lump sum. The option of receiving benefits in the form of pension only is not available to members of public sector schemes. Depending on the impact of any new tax charge on retirement lump sums, the option to commute part of a pension fund may no longer be exercised by private sector pension scheme members or may be exercised in a manner that reduces the value of the lump sum taken to minimise or avoid any immediate tax charge.
227. Deputy Pearse Doherty asked the Minister for Finance the partial and full-year revenue that would be raised for the Exchequer by increasing the stamp duty on share transactions from 1% to 1.5%. [31247/14]
Amharc ar fhreagraI am advised by the Revenue Commissioners that the full year yield to the Exchequer from increasing Stamp Duty on share transactions from 1% to 1.5%, by reference to the expected 2014 outturn, is estimated to be in the region of an additional €143 million. A partial estimate is not provided as Stamp Duty is payable at time of transfer of the relevant stock or marketable security.
228. Deputy Pearse Doherty asked the Minister for Finance the partial and full-year revenue that would be raised for the Exchequer by increasing Revenue Commissioners' personnel by 125 qualified persons to target tax evasion and black-market activity, as per the Revenue Commissioners' contribution to the initial comprehensive review of spending. [31248/14]
Amharc ar fhreagraI am advised by the Office of the Revenue Commissioners that Revenue's Comprehensive Review of Expenditure 2011 noted that by increasing audit, investigation and compliance resources by c.125 staff an additional exchequer yield of €100m per annum could be achieved. In addition it noted that there is a significant deterrent and voluntary compliance effect on behaviour of an effective, risk based compliance programme. The additional yield was based on an estimate that each additional fully trained auditor has the capacity to bring in an average of €800,000 in audit yield. The investment in the training and development of a Revenue Auditor can take up to three years, depending on previous relevant experience. Therefore the full additional yield would not be available immediately.
Revenue undertakes a range of risk management interventions to target and confront those who do not comply, including tax evasion and black market activity. The objective is that people are deterred from filing inaccurate returns and from engaging in shadow economy activity and smuggling. The range of interventions has increased since 2011. Interventions include appraisals, aspect queries, profile interviews, assurance checks, enforcement, investigation and prosecutions, as well as audits. The appropriate intervention depends on the relevant risk. The average rate of return on each type of intervention varies depending on the intervention. In some types of interventions to tackle evasion and the black economy, such as enforcement, the focus is on the detection of drugs and fiscal smuggling where the direct exchequer yield is not the immediate objective.
It must also be recognised that Revenue has to prioritise its resources and must, for example, encourage voluntary compliance by making it easier and less costly to comply. I am satisfied that Revenue appropriately prioritises its available resources to achieve the strategic objective of a more tax and customs compliant society and a Revenue Administration that fosters economic recovery and development. The 2015-2017 Comprehensive Review process is on-going. Revenue proposes to publish its Comprehensive Review of Expenditure 2014 when the deliberative process is completed.
229. Deputy Pearse Doherty asked the Minister for Finance the partial and full-year revenue that would be raised for the Exchequer by standardising the relief relating to investment in film. [31249/14]
Amharc ar fhreagraI am informed by the Revenue Commissioners that on the basis of claims for investment in film relief for the tax year 2013, the latest full year available, the theoretical maximum yield from standardising the rate of Income Tax relief for investment in film production could be in the region of €35 million. The Deputy should be aware, however, that the current scheme of Income Tax relief for investment in film production is due to end in 2015. The scheme is being replaced by a new scheme of Corporation Tax relief to Film Producer Companies.
230. Deputy Pearse Doherty asked the Minister for Finance the partial and full-year revenue that would be raised for the Exchequer by standardising investment in rented residential relief under section 23. [31250/14]
Amharc ar fhreagraI am informed by the Revenue Commissioners that, as Section 23 relief is included in aggregated loss claims after the first year of claim, tax returns do not provide a basis for compiling estimates for the yield from standardising relief for all claims under the Section. If the Deputy had in mind to standardise the relief for properties that are yet to claim Section 23 relief for the first time, it is tentatively estimated, based on analysis of first time claimants in previous years' tax returns, that the Exchequer yield could be around €5 million over the period of claim.
231. Deputy Pearse Doherty asked the Minister for Finance the partial and full-year revenue that would be raised for the Exchequer by reducing mortgage interest deductions against rent for landlords from 75% to 41%, 40%, 35% and 30%, respectively. [31251/14]
Amharc ar fhreagraI am informed by the Revenue Commissioners that a breakdown between rent received from residential and other types of property is not sought or provided in tax returns. However, based on personal Income Tax returns filed by non-PAYE taxpayers for the year 2012, the latest year for which this information is available, and making certain assumptions about the data, it is estimated that the revenue that could be raised from reducing the level at which individuals can claim interest repayments against tax for residential rental properties from 75% to 41% , 40%, 35% and 30% may be in the region of €130 million, €134 million, €153 million and €172 million respectively. It should be noted that these estimates do not include returns by some PAYE taxpayers. However, a PAYE taxpayer with non-PAYE income greater than €3,174 is required to complete an Income Tax return Form 11. This return is the source of the figures provided in this reply in respect of individuals.
Rental income of companies is returned as net of interest on borrowings and the figures for interest are not separately distinguished in Corporation Tax returns. There is, therefore, no basis for an estimate of the cost of reducing the tax relief for corporate landlords. I am advised by the Revenue Commissioners that the estimated cost of interest relief on residential properties is based on assuming that tax relief is allowed at the Income Tax rate of 41% and the figures provided could therefore be regarded as the maximum Exchequer cost in respect of those taxpayers. This figure is subject to adjustment in the event of late returns being filed or where returns already filed are subsequently amended.
232. Deputy Pearse Doherty asked the Minister for Finance the partial and full-year revenue that would be raised for the Exchequer by increasing withholding tax on royalties, where it applies, from 20% to 22%, 23%, 24% and 25%, respectively. [31252/14]
Amharc ar fhreagraIn the time available, having regard to the volume of questions, Revenue are not in a position to provide the information sought. However, I will arrange for the information to be supplied directly to the Deputy.
233. Deputy Pearse Doherty asked the Minister for Finance the partial and full-year cost to the Exchequer of abolishing the local property tax. [31253/14]
Amharc ar fhreagraI am advised by the Revenue Commissioners that the estimated potential cost to the Exchequer of abolishing Local Property Tax would be in the region of €500m per annum. However, it should be borne in mind that under the terms of the Stability and Growth Pact, once Ireland is out of the corrective arm and until it has reached its objective of a balanced budget in structural terms, we may not introduce discretionary revenue reductions unless they are matched by other revenue increases or expenditure reductions. This means that Government must consider carefully any tax changes as any reductions will have to be offset elsewhere.
234. Deputy Pearse Doherty asked the Minister for Finance the partial and full-year cost to the Exchequer of reducing windfall tax from 80% to 60%, 50% and 40%, respectively, for development land disposals. [31254/14]
Amharc ar fhreagraThe windfall tax rate of 80% applies to the portion of the profit or gain on a disposal of land which is attributable to a "relevant planning decision" a rezoning, where both the rezoning and the disposal of land giving rise to the windfall happen after 30 October 2009; or a "material contravention" decision by a Local Authority, where both the decision and the disposal happen after 4 February 2010. I am informed by the Revenue Commissioners that on the basis of the Form 11 Income Tax returns and Corporation Tax returns for 2010-2012 (the latter being the latest tax year for which the necessary information is available), there is no record of any such profits or gains having been returned. The windfall gains provisions were introduced primarily to discourage overheating of the property market by way of speculative transactions involving rezoned land rather than as a revenue raising measure. There is no reliable basis for estimating the impact on revenues to the Exchequer from reducing the 80% rate to 60%, 50% and 40% respectively for development land disposals.
235. Deputy Pearse Doherty asked the Minister for Finance the partial and full-year cost to the Exchequer of raising the VAT registration threshold for small medium enterprises with low turnover from €70,000 to €100,000, €150,000, €175,000, €200,000 and €250,000, respectively. [31255/14]
Amharc ar fhreagraIn the time available, having regard to the volume of questions seeking costings on individual measures, Revenue are not in a position to provide the information sought. However, I will arrange for the information to be supplied directly to the Deputy.
237. Deputy Pearse Doherty asked the Minister for Finance the partial and full-year cost to the Exchequer of extending the disabled drivers and disabled passengers tax concession scheme to those who would otherwise qualify but are disqualified because they do not buy their cars from authorised dealers. [31257/14]
Amharc ar fhreagraI am informed by the Revenue Commissioners that it is not possible to estimate the cost to the exchequer of removing the requirement that a vehicle must be purchased from an authorised person to benefit from a repayment of VRT and VAT. However, all applicants are advised of the requirement, which is not intended to exclude qualifying persons from benefiting from the schemes, and therefore the cost of its removal would be negligible if not zero. The restriction does not apply when a qualifying person imports and applies for remission of VRT on registration of an adapted vehicle. I have asked my officials to examine the Regulations with a view to streamlining and modernising the scheme and addressing any anomalies. I expect that this examination to be concluded shortly.
239. Deputy Pearse Doherty asked the Minister for Finance the partial and full-year cost to the Exchequer of allowing entrepreneurs-small to medium enterprise start-ups a three-year capital gains tax window for selling on their ideas or businesses. [31259/14]
Amharc ar fhreagraSection 45 of Finance (No 2) Act of 2013 provides for a capital gains tax relief for entrepreneurs who reinvest the proceeds from the disposal of assets made on or after 1 January 2010 in certain chargeable business assets. Commencement of the relief is subject to EU state-aid approval. Subject to EU approval, the relief will apply from 1 January 2014 to individual entrepreneurs:
- Who have made disposals of assets since 1 January 2010 on which they have paid capital gains tax;
- Who invest at least €10,000, in the period from 1 January 2014 to 31 December 2018, in acquiring chargeable business assets that will be used in a new business and
- Who subsequently (after a minimum period of 3 years) dispose of those chargeable business assets at a gain giving rise to a capital gains tax liability.
The relief will be given on the tax due on any chargeable gain arising on the subsequent disposal of the chargeable assets after a minimum period of 3 years and will amount to the lower of:
- the full amount of capital gains tax paid on the initial disposal made since 1 January 2010 or
- 50% of the CGT payable on the disposal of the new chargeable business assets.
If an entrepreneur reinvests the proceeds of that subsequent disposal in a further new business, the relief can also apply on a subsequent disposal of the chargeable business assets of that further new business. Where less than the full proceeds of a disposal on which capital gains tax has been paid are reinvested, only that proportion of the capital gains tax relative to the amount reinvested will qualify for relief. The relief will be given in the form of a tax credit equal to the lower of the capital gains tax paid on the disposal of assets made on or after 1 January 2010 or 50% of the capital gains tax on any gain from the future disposal of the chargeable business assets. The relief is estimated to have a full year cost of €20 million by 2018.
241. Deputy Pearse Doherty asked the Minister for Finance the cost of maintaining the 9% VAT rate for the hospitality sector; and his plans to continue with this measure. [31261/14]
Amharc ar fhreagraThe 9% reduced VAT rate for tourism related services was introduced in July 2011 as part of the Government Jobs Initiative. The measure was designed to boost tourism and create additional jobs in that sector. In Budget 2014 I announced that the 9% VAT rate would be retained indefinitely at a cost of €290 million in 2014 and €350 million in a full year. The Budget change means that the 9% rate is not due to expire, but it is subject to change in the normal course of the budgetary and Finance Bill process, as with all taxes. In this context, there would be no additional cost of maintaining the 9% VAT rate in 2015 and subsequent years.
242. Deputy Pearse Doherty asked the Minister for Finance the amount carried over to 2015 as a result of budget 2014 measures; and if he will provide detailed breakdown thereof. [31262/14]
Amharc ar fhreagraIt is estimated that there will be a small negative carryover into 2015 as a result of Budget 2014 measures in the region of €2 million. The exact impacts of carryover will be reviewed as part of the Budget 2015 process, as there are a lot of moving parts to be considered, such as economic growth, take up of various schemes and specific tax relevant factors, which could impact on the expected return from the measures. These will be reflected in the White Paper on Receipts and Expenditure which will be published in advance of Budget 2015.
|
Tax Head |
2015 Carryover €m |
|
Income Tax |
+13 |
|
VAT |
-2 |
|
Excise Duties / (carbon tax) |
-8 |
|
Stamp Duty |
-5 |
243. Deputy Pearse Doherty asked the Minister for Finance if the pension provisions of budget 2013 pertaining to contributions no longer receiving tax relief once the pension fund has exceeded the standard fund threshold have been enacted; if so, the amount the measures generated or if recently enacted what they are planned to generate. [31263/14]
Amharc ar fhreagraI introduced changes in Finance (No. 2) Act 2013 to deliver on the commitment I made in Budget 2013 in the supplementary pensions area. The changes involve a reduction from 1 January 2014 in the value of the maximum allowable pension fund at retirement for tax purposes (the Standard Fund Threshold - SFT) from €2.3 million to €2 million and an increase from the current single factor of 20 used to value Defined Benefit pensions for SFT purposes to a range of higher factors varying with the age at which the pension is drawn down. This latter change will place a higher capital value for SFT purposes on Defined Benefit pension entitlements accrued after 1 January 2014 and drawn down at retirement. The use of a range of capitalisation factors will improve the equity of the SFT regime as between Defined Contribution and Defined Benefit pension arrangements and between those retiring at earlier ages and those retiring at older ages.
The Deputy might note that the SFT regime does not involve the non-application of tax relief to pension contributions. Instead, the regime addresses the problem of pension overfunding and excessive pension accrual by imposing a much higher effective tax charge on the value of retirement benefits above set limits when they are drawn down, thus discouraging the building up through contributions of large pension funds in the first place or the unwinding of the tax advantage of such overfunding by way of the higher effective tax charge. The yield from the changes made to the SFT regime is estimated at €120 million in 2014 and in a full year.
