Written Answers Nos. 202 to 216
202. Deputy Pearse Doherty asked the Minister for Finance the options available to a business person otherwise eligible for a National Asset Management Agency rent abatement scheme whose landlord is not co-operating with their application; and if he will make a statement on the matter. [3471/15]
Amharc ar fhreagraNAMA's Guidance Note on Upwards Only Rent Reviews, which has been in place since December 2011, is available on the NAMA website, www.nama.ie, and sets out for tenants both the process involved in making an application for rent abatement through a NAMA debtor or receiver and the financial information that must be submitted alongside such an application. NAMA can only assess applications submitted by debtors and receivers where all relevant information has been provided.
I am advised by NAMA that it has received 370 applications for rent abatement, through its debtors and receivers, under its Guidance Note and that, of these, 339 have been approved and a further 19 are currently being assessed. The aggregate annual value of approved rent abatements to date is €23m and NAMA has also approved long-term rent reliefs worth over €40 million to small and medium retailers around the country.
NAMA advises that if any tenant considers that his or her landlord is not engaging with them in accordance with the Guidance Note, he or she can contact NAMA directly at info@nama.ie and ask that NAMA look into the matter on their behalf.
203. Deputy Pat Rabbitte asked the Minister for Finance in view of the fact that Horse Racing Ireland is seeking to secure an adequate and consistent level of multi-annual funding from the Exchequer for horse racing here; if he proposes to increase the tax contribution from the thoroughbred breeding industry in view of the 2012 yields of €700,000 in income tax returns and €6.4 million in corporation tax returns; and if he will make a statement on the matter. [3481/15]
Amharc ar fhreagraI dealt comprehensively with the issue of profits and tax yields from the thoroughbred breeding industry in my replies to Questions Nos. 157 to 160, inclusive, on 18 November last year and Question No. 177 on 9 December last.
In these replies, I explained that there was a range of variables associated with the stallions industry and that profits from a number of activities within the thoroughbred breeding sector are not separately identifiable. As a result, it is unwise to draw any firm conclusions from the figures supplied.
The Deputy will be aware that the figures supplied related only to profits for income tax and corporation tax purposes and took no account of the overall contribution made by the sector in terms of employment taxes and VAT. I am advised by the Revenue Commissioners that these amounts may not include gains from the sale of stallions, nor does it include profits earned from the provision of stallion stud services that are owned by syndicates as these are not regarded as having been earned in the course of a trade. It is not possible to state the amount of any profits associated with these activities as they are not separately captured on tax returns.
As to plans to increase the tax contributions from the thoroughbred breeding industry, I have no plans for changes in this area at this time.
204. Deputy Seán Kenny asked the Minister for Finance the estimated cost to the Exchequer if the 13.5% VAT rate was reduced to 13%; and if he will make a statement on the matter. [3508/15]
Amharc ar fhreagraI am advised by the Revenue Commissioners that the cost of lowering the reduced rate of VAT from 13.5% to 13% is estimated at €130m.
205. Deputy Jack Wall asked the Minister for Finance if a person (details supplied) in County Kildare is due a tax refund; and if he will make a statement on the matter. [3541/15]
Amharc ar fhreagraI have been advised by the Revenue Commissioners that the person concerned is a chargeable person for income tax purposes. A tax return for 2013 has been received by Revenue and a refund issued to the person concerned in September 2014.
On receipt of the 2014 tax return, the position will be reviewed and any tax and/or universal social charge (USC) overpaid will be refunded.
The Revenue Commissioners have confirmed, that based on the information currently available to them, USC, should not be deducted from the pension of the person concerned. A revised tax credit and USC certificate will issue shortly to the person concerned and to their pension provider. When the amended certificate is received by the pension provider, the USC over deducted in 2015 will be refunded.
206. Deputy Terence Flanagan asked the Minister for Finance the position regarding PRSA accounts (details supplied) in Dublin 5; and if he will make a statement on the matter. [3548/15]
Amharc ar fhreagraA Personal Retirement Savings Account (PRSA) is an easy access private pension savings vehicle designed to allow individuals save for retirement flexibly. PRSAs may be taken out by anyone, regardless of employment status, are transferable from job to job and are available from a variety of authorized providers. However, they have particular relevance for those who are not members of occupational pension schemes and the self-employed (where they operate as an alternative to retirement annuity contracts). In essence, a PRSA is a personally held contract-based defined contribution retirement arrangement between an individual and an authorised PRSA provider, such as an insurance company, credit institution or investment firm. They are maintained in the form of an account that holds units in investment funds managed by the authorized providers.
An individual may make tax-relieved contributions to a PRSA and, where the PRSA is effected by an employer in circumstances where there is no employer-sponsored occupational pension scheme, employers may also contribute but are not obliged to do so. Pension benefits under a PRSA may, with some exceptions, be taken from age 60 to age 75. A tax-free retirement lump sum not exceeding 25% of the fund can be taken, subject to a maximum tax-free amount of €200,000 with the remainder of the fund used to purchase an annuity, retained in the PRSA and drawn-down over time or used to avail of the flexible retirement options which include investing in an Approved Retirement Fund (ARF). All withdrawals are subject to income tax at the individual's marginal income tax rate as appropriate.
There are a number of reasons why, under existing policy, pre-retirement access to pension savings held in the form of pension plans or schemes is not permitted. The principal reason is that these arrangements (and the associated tax reliefs on contributions and pension fund growth) are designed to be long-term savings vehicles based on the principle that the benefits will be "locked away" to help fund an adequate income in retirement. This is why the Government encourages pension savings through generous tax relief on contributions and pension fund growth.
That said, in Budget and Finance Act 2013, I introduced Section 782A of the Taxes Consolidation Act 1997 to provide members of occupational pension schemes with a once-off opportunity to access a part of their Additional Voluntary Contributions (AVCs), including AVCs made by a scheme member to an AVC-PRSA product, prior to retirement. The option is available for a three year period from 27 March 2013, the date that the Finance Act 2013 was passed into law. The take-up of the measure to date has not been particularly significant and most individuals have decided to preserve their AVC pension savings. I would emphasise, of course, that the pre-retirement access allowed for in this initiative is to additional pension savings over and above an individual's core savings in his or her main employer-sponsored scheme. Main pension scheme savings are generally not accessible pre-retirement.
I appreciate that for those in financial difficulties, it is natural to look to their pension savings as a possible means of helping to solve those difficulties. However, I am strongly of the view that it is preferable not to allow early unplanned withdrawals of core pension savings as an inevitable result is to divert the savings, initially intended to finance retirement, to meet short term financial crises. Allowing such access would clearly pose retirement income adequacy issues and the impact of the early withdrawal of pension savings on the ultimate value of the pension pot at retirement should not be underestimated.
For these various reasons, I have no plans to extend pre-retirement access to pension savings beyond what is provided for in relation to AVCs.
207. Deputy Pearse Doherty asked the Minister for Finance the amount collected by each State backed bank in maintenance fees or overdraft facility charges for each of the past five years on bank accounts that have been inactive for at least three years. [3558/15]
Amharc ar fhreagraThe banks have been unable to provide the information as requested by the Deputy within the required timeframe as I understand that this data is not captured by the banks in the normal course of operations.
However one bank, permanent tsb, has provided my Department with an estimate of the information requested which would indicate that the amount over the past five years is not material as only a very small number of their accounts were charged the fees in question and were inactive at any point in time.
208. Deputy James Bannon asked the Minister for Finance if he has assessed the numbers of home repossessions which are ratified and are occurring; and if he will make a statement on the matter. [3577/15]
Amharc ar fhreagraThe Central Bank's Residential Mortgage Arrears and Repossession Statistics for Quarter 3 of 2014 can be accessed at the following link: http://www.centralbank.ie/polstats/stats/mortgagearrears/Pages/releases.aspx.
I am very aware of this issue and a number of initiatives have been put in place to address it. While the administration of the Courts is a matter for my colleague, the Minister for Justice and Equality, it is important to note that there are important protections available to borrowers under the Code of Conduct on Mortgage Arrears (CCMA).
In accordance with the CCMA, any lender must have complied with the CCMA before a threat of repossession can be made. The CCMA provides an integrated and cohesive package of consumer protection measures for borrowers facing or in mortgage arrears.
Under the CCMA, a lender may only commence legal proceedings for repossession of a borrower's primary residence, where:
a) the lender has made every reasonable effort under the CCMA to agree an alternative repayment arrangement with the borrower or his/her nominated representative; and
b) (i) for co-operating borrowers, eight months from the date the arrears arose, or three months from the date of the letter informing the borrower that an alternative repayment arrangement is not deemed to be appropriate; or
(ii) where the borrower has been classified as not co-operating and the lender has issued the notification required under the CCMA.
While the repossession of a principal dwelling house consequent upon mortgage default should only be considered as a last option for a person in genuine difficulty, repossessions do arise and this can be expected to continue as long as the mortgage crisis remains. It should be noted, however, that when repossessions do arise most are of a voluntary nature and that the legal repossession route only arises in a minority of cases.
It is important to point out, however, that even if a repossession case has commenced in the legal system, the Land and Conveyancing (Law Reform) Act 2013 now provides a power to the Court to adjourn a repossession proceeding in relation to a principal private residence to enable the borrower to consult a personal insolvency practitioner (PIP) and, where appropriate, to instruct the PIP to make a Personal Insolvency Arrangement (PIA) proposal. In formulating a proposal for a PIA, the Personal Insolvency Act 2012 places an onus on a PIP to do so on terms that shall not insofar as reasonably practicable, require the borrower to dispose of an interest or cease to occupy a principal private residence.
The strong view of the Government is that, in respect of co-operating borrowers under the Mortgage Arrears Resolution Process, repossession of a person's primary home should only be considered as a last resort and that every effort should be made to agree a sustainable arrangement as an alternative to repossession.
209. Deputy Jim Daly asked the Minister for Finance his views on correspondence (details supplied) regarding altering the conditions of private pensions; and if he will make a statement on the matter. [3617/15]
Amharc ar fhreagraIn the details supplied with the Deputy's question, I assume that the issues raised regarding private sector funded pensions are to do with the pension fund levy. I announced in my Budget 2014 speech that the 0.6% Pension Fund Levy introduced to fund the Jobs Initiative in 2011 would be abolished from the 31st of December 2014. I did, however, introduce an additional levy on pension funds at 0.15% for 2014 and 2015. I did this to, among other things, continue to help fund the Jobs Initiative. I confirmed in my Budget 2015 speech that the additional 0.15% levy will expire at the end of 2015.
The issues raised in the details supplied regarding public service pensions are matters for my colleague the Minister for Public Expenditure and Reform, Mr Brendan Howlin TD.
210. Deputy Michael McGrath asked the Minister for Finance the steps that have been taken to establish a central credit register here; when the register will be up and running; and if he will make a statement on the matter. [3632/15]
Amharc ar fhreagraThe Credit Reporting Act 2013 provides that the Central Bank is responsible for the establishment and operation of the central credit register (CCR).
The Central Bank has informed me that it completed a public procurement process in 2014. The purpose of the process was to select a partner and solutions to support the CCR. The Bank is currently negotiating the final details of the contract with the preferred supplier. The Bank also engaged with representative industry groups to explain its approach and gain an understanding of the likely implications of the CCR for lenders.
I understand that the Central Bank intends to take a phased approach to the establishment and development of the register. The initial phase of the CCR will focus on the consumer credit market and is expected to become operational by mid-2016. A later phase will address commercial credit and is tentatively scheduled to be operational by end- 2017.
The operational implementation of the credit register is a complex process and the final timeline will be influenced by:
1. the scale of technical and operational changes to be implemented by over 500 lenders within the scope of the CCR; and
2. the final detailed obligations to be set out in regulations.
It is anticipated that 2015 will be spent in developing and testing the technical solutions in partnership with relevant stakeholders with credit data being supplied by lenders on a phased basis during the course of late 2015 and into 2016.
211. Deputy Mick Wallace asked the Minister for Finance his plans to introduce financial transaction taxes and carbon tax on airline ticket levies in order to raise additional resources to fund sustainable development at scale, as encouraged by the UN Secretary General in his December 2014 Synthesis Report on the post-2015 sustainable development agenda (A69/700); and if he will make a statement on the matter. [3693/15]
Amharc ar fhreagraThe Government's position is that a Financial Transactions Tax (FTT) would be best applied on a wide international basis to include the major financial centres to prevent the danger of activities gravitating to jurisdictions where taxes are not levied on financial transactions. Notwithstanding this, the Government is not prepared to stand in the way of EU Member States that wish to work together to implement a Financial Transactions Tax and in this regard adoption of a decision formally authorising enhanced cooperation took place during the Irish Presidency of the EU in January 2013.
The proposal for a Directive from the European Commission in the area of financial transaction tax was published in February 2013. Ireland had many concerns about the proposal as drafted, not least of which were the potential impacts on, and the trading of, Irish Sovereign debt in the secondary market and in total, the potential negative impact on the liquidity of the financial sector as a whole. Members of the Economic and Financial Sub-Committee on EU Sovereign Debt Markets have stated that the introduction of the FTT would have a significantly negative effect on Sovereign Debt Markets and may impair the good-functioning of secondary markets for sovereign debt resulting in reduced liquidity, reduced investor demand and therefore higher financing costs for States.
Our concerns are widely shared amongst the Member States, including some of the participating countries. These concerns have led to the issuing of a communique by the participating Member States, announcing that they have agreed to implement a financial transaction tax in a progressive manner, with the first step being a charge on shares and some derivatives. However, significant technical and legal discussions will continue to be required at the Council Working Party before the text of the proposed Directive can be finalised. With this in mind, the targeted implementation date for the FTT has been rescheduled to 1 January 2016.
As the Deputy will be aware, Ireland already has a tax on financial transactions, a Stamp Duty on transfers of shares in Irish incorporated companies, which currently stands at 1%. I am informed by the Revenue Commissioners that the provisional yield from this charge in 12014 was €283.67m.
Ireland was one of the first Member States to introduce a Carbon Tax on fossil fuels which as well as providing for much needed revenues also went some way towards addressing environmental concerns. The tax was introduced, at an initial rate of €15 per tonne of CO2 emission, on a phased basis in Budget 2010 and applied to petrol and diesel from budget night 2009 and to all other fossil fuels (except solid fuels) from 1st May 2010. The rate was increased to €20 per tonne of CO2 emission in Budget 2012. It was extended to solid fuels from May 2013 at a rate of €10 per tonne which increased to €20 per tonne in May 2014. The provisional carbon tax receipts for 2014 are €385.2m.
An Air Travel Tax with a general rate of €10, and €2 for shorter journeys, was introduced in the 2009 Budget, effective from 30 March 2009. The Finance Act 2011 provided for a single rate of Air Travel Tax of €3 for all passengers with effect from 1 March 2011, replacing the €2 and €10 distance related rates. Following the success of the 'The Gathering' in 2013, Budget 2014 provided for the removal of the Air Travel Tax from 1st April 2014. This was to encourage the development of new routes, increasing capacity and traffic flows which in turn would boost tourism and lead to the creation of jobs. This built on the success of the 9% VAT rate for tourism related services that was introduced in 2011 as part of the Jobs Initiative. Employment in the accommodation and food service sector has increased by over 20% between the period Q2 2011 to Q2 2014 an increase of 23,000 jobs in the sector.
I am generally not in favour of the hypothecation of taxes as it reduces the flexibility of the Government to prioritise and allocate funds as necessary at a particular time.
212. Deputy Mick Wallace asked the Minister for Finance his plans to introduce a 1% billionaires' tax as proposed by the UN in the World Economic and Social Survey 2012 the revenue of which could be used to aid Ireland in its commitment to a more carbon-efficient economy, particularly in view of the estimation by Princeton Environmental Institute director (details supplied) that the 500 million richest persons on the planet are responsible for about half of all global emissions; and if he will make a statement on the matter. [3694/15]
Amharc ar fhreagraI have no plans to introduce a tax along the lines suggested by the Deputy.
Ireland was one of the first Member States to introduce a Carbon Tax on fossil fuels which as well as providing for much needed revenues also went some way towards addressing environmental concerns. The tax was introduced, at an initial rate of €15 per tonne of CO2 emission, on a phased basis in Budget 2010 and applied to petrol and diesel from budget night 2009 and to all other fossil fuels (except solid fuels) from 1 May 2010. The rate was increased to €20 per tonne of CO2 emission in Budget 2012. It was extended to solid fuels from May 2013 at a rate of €10 per tonne which increased to €20 per tonne in May 2014. The provisional carbon tax receipts for 2014 are €385.2m.
I am generally not in favour of the hypothecation of taxes as it reduces the flexibility of the Government to prioritise and allocate funds as necessary at a particular time.
213. Deputy Dan Neville asked the Minister for Finance if appropriate tax credit will be applied in the case of a person (details supplied) in County Limerick; and if he will make a statement on the matter. [3741/15]
Amharc ar fhreagraI am advised by the Revenue Commissioners that the person concerned has recently written to them on this matter. Based on the information provided in this communication, an amended Tax Credit Certificate including a Single Parent Child Carer Credit as claimed, will issue shortly.
214. Deputy Jack Wall asked the Minister for Finance if a person (details supplied) in County Kildare is on their correct tax payments; and if he will make a statement on the matter. [3775/15]
Amharc ar fhreagraI am informed by the Revenue Commissioners that the 2015 tax credits of the person concerned have been reduced to collect underpayments of tax arising in prior years. The person concerned was advised of the amounts to be collected in the PAYE Balancing Statements (P21s) that issued to him on 1 April 2011 and 9 May 2014. Taking into account these reductions and based on the information available to Revenue, the person concerned is in receipt of the correct tax credits for the current year. A tax credit certificate confirming this position will issue shortly to the person concerned.
The Revenue Commissioners have also advised me that they have written to the person concerned requesting his P60 for 2014 so that his tax liability for that year can be reviewed.
215. Deputy Mary Mitchell O'Connor asked the Minister for Finance the reason under 18 year old persons who have a savings bank account must pay 41% DIRT tax on their savings interest; and if he will make a statement on the matter. [3786/15]
Amharc ar fhreagraUnder Section 257 of the Taxes Consolidation Act 1997 all deposit takers are obliged to deduct Deposit Interest Retention Tax (DIRT) from payments of interest made to an account unless the account qualifies as an exempt account. There is no specific exemption in the case of interest paid on deposit accounts held by children.
The wider tax code does not provide for an exemption from tax for children. Children could be liable to a range of taxes. Not many children have an income that exceeds the relevant thresholds, but those that do are taxable on it.
To provide an exemption from DIRT to children's accounts could be difficult to administer, from the point of view of establishing the beneficial ownership of the account.
A number of State Savings Products offered by the National Treasury Management Agency through An Post are tax free, subject to certain conditions.
216. Deputy Jack Wall asked the Minister for Finance the reason a person (details supplied) is paying a high level of tax; and if he will make a statement on the matter. [3791/15]
Amharc ar fhreagraI have been advised by the Revenue Commissioners that according to their records, the person concerned ceased employment in August 2014 and is not currently employed.
The Revenue Commissioners are writing to the person concerned to confirm the position and will arrange for a tax credit certificate to be issued, if required.
