Written Answers Nos. 156 - 172
156. Deputy Joan Burton asked the Minister for Finance the discussions his Department has had with an organisation (details supplied) regarding the establishment of a local public banking network; and if he will make a statement on the matter. [26546/16]
Amharc ar fhreagraIn 2015, Sparkassenstiftung für Internationale Kooperation (Savings Banks Foundation for International Cooperation - SBFIC), with the support of the Public Banking Forum of Ireland, submitted a proposal to the Department of Finance regarding the development of a local public banking system in Ireland. This proposal was considered in detail by officials in my Department and there was engagement with Sparkassenstiftung für Internationale Kooperation, the Public Banking Forum of Ireland and Irish Rural Link on the issue.
The current Programme for Government contains a commitment to investigate the German Sparkassen model for the development of local public banks that operate within well-defined regions. The Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs are the lead department in respect of this commitment and therefore have primary responsibility for this matter. Minister of State Murphy, along with officials from my Department, recently met with Sparkassenstiftung für Internationale Kooperation and Irish Rural Link and advised them that, in the first instance, they should make contact with the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs as the lead department on this matter.
157. Deputy Joan Burton asked the Minister for Finance if his Department has had discussions with the Irish League of Credit Unions and the Credit Union Development Association regarding the establishment of a local public banking network; and if he will make a statement on the matter. [26547/16]
Amharc ar fhreagra158. Deputy Joan Burton asked the Minister for Finance if his Department has had discussions with the European Investment Bank regarding the establishment of a local public banking network; and if he will make a statement on the matter. [26548/16]
Amharc ar fhreagraI propose to take Questions Nos. 157 and 158 together.
I refer the Deputy to my response to her previous question on local public banking. The Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs has primary responsibility for the Programme for Government commitment to investigate the German Sparkassen model for the development of local public banks. My Department has not engaged with the Irish League of Credit Unions, the Credit Union Development Association or the European Investment Bank on this issue.
Minister of State Murphy, along with officials from my Department, recently met with Sparkassenstiftung für Internationale Kooperation and Irish Rural Link and advised them that, in the first instance, they should contact the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs as the Department with primary responsbility for this matter.
159. Deputy Jack Chambers asked the Minister for Finance his plans to allow for a system of tax incentives for elite athletes who avail of sponsorship; and if he will make a statement on the matter. [26567/16]
Amharc ar fhreagraI have no plans to introduce a system of tax incentives to assist elite athletes to attract sponsorship. The Deputy may be aware that the State already provides support to athletes both directly and indirectly, and my colleague the Minister for Transport, Tourism, and Sport has responsibility for such support.
I would draw the Deputy's attention to the sportsperson's relief, which takes the form of a deduction from earnings and can be claimed for any 10 years of assessment chosen by a qualifying professional sportsperson from the period comprising the year of retirement and the preceding 14 years of assessment. Qualifying professional sportspersons include athletes, badminton players, boxers, cyclists, footballers, golfers, jockeys, motor racing drivers, rugby players, squash players, swimmers, tennis players and cricketers. The amount of deduction available is set at 40% of the gross receipts, before deducting expenses, which arose wholly and exclusively from engaging in the sport. It does not apply where no direct sports earnings exist and is restricted to direct earnings from participation in certain sports.
As you will appreciate, I receive numerous requests for the introduction of new tax reliefs and the extension of existing ones. You will also appreciate that I must be mindful of the public finances and the many demands on the Exchequer. Tax reliefs, no matter how worthwhile in themselves, reduce the tax base and make general reform of the tax system that much more difficult.
160. Deputy Pearse Doherty asked the Minister for Finance the expected yield in 2017 and 2018 from proposed changes to section 110 of the Taxes Consolidation Act, which would restrict the use of profit participating loans where they are used to finance business of section 110 companies related to Irish property transactions; and if he will make a statement on the matter. [26587/16]
Amharc ar fhreagra191. Deputy Róisín Shortall asked the Minister for Finance further to his announcement on 6 September 2016 regarding a proposed amendment to section 110 of the Taxes Consolidation Act 1997, the anticipated yield from this measure in each of the next five years. [26949/16]
Amharc ar fhreagraI propose to take Questions Nos. 160 and 191 together.
I have recently published a proposed amendment to section 110 TCA 1997 which I intend to introduce in the Finance Bill. I am informed by Revenue that it is not yet possible to accurately cost the measure. This proposal was published on 6 September 2016, in draft form, in order to obtain constructive feedback and views from interested bodies.
It should be noted that the tax returns and financial statements for 2015 are due to be filed from the end of next month, after which Revenue will have the opportunity to examine the activities for 2015 in full. Until a larger number of accounts covering a number of years are fully examined it will be difficult to estimate the likely impact of the proposed amendment. It is Revenue's intention to conduct a thorough investigation of companies availing of section 110 who have acquired Irish distressed debt.
The matters being reviewed concern complex transactions and the appropriate accounting treatment for such transactions. Where a company acquires a loan book there will be three possible sources of profits which are: the interest payments that are made by the borrowers; the capital repayments made by the borrowers that exceed the capital cost of the loan book to the lender; and any gain arising on the disposal of a loan or any property on which a loan is secured.
In addition, to accurately estimate the full impact of the measure would require ex ante knowledge of any behavioural changes on the part of taxpayers as a consequence of the amendment. Revenue would not therefore be in a position to anticipate the extent and impact of any such behavioural changes or corresponding impact on the tax yield. The proposed amendment is not finalised which also leads to difficulties predicting any potential yield.
161. Deputy Marc MacSharry asked the Minister for Finance the estimated yield per annum in the current market in the event of the National Treasury Management Agency raising 50-year money; and if he will make a statement on the matter. [26642/16]
Amharc ar fhreagra162. Deputy Marc MacSharry asked the Minister for Finance the estimated yield per annum in the current market in the event of the National Treasury Management Agency raising 100-year money; and if he will make a statement on the matter. [26643/16]
Amharc ar fhreagraI propose to take Questions Nos. 161 and 162 together.
I am advised by the National Treasury Management Agency (NTMA) that it does not speculate about the interest rates at which it could potentially issue debt.
The number of variables that impact interest rates including yields in other markets at the time; the demand for the relevant maturity at a point in time; and the size of the issue would make the calculation of meaningful estimates impractical.
As the Deputy may be aware, the NTMA issued €100 million of a 100-year note earlier this year at a yield of 2.35 per cent.
163. Deputy Marc MacSharry asked the Minister for Finance the impact an additional €10 billion in borrowing would have on the debt-to-GDP ratio; and if he will make a statement on the matter. [26644/16]
Amharc ar fhreagraThe most recent official forecast of general government debt (GGD) for 2016, published in the Stability Programme Update in April 2016, was €203.8 billion, which equated to 88.2% of GDP. The impact of an additional €10 billion in borrowing would increase this debt to GDP ratio by 4.4 percentage points to 92.6%.
New macroeconomic and fiscal forecasts are currently being prepared for the Budget day publication. These will take account of developments up to that time, including both the outcome of the UK referendum in June and the GDP revisions for 2015 published in July by the CSO.
164. Deputy John Brassil asked the Minister for Finance the position regarding the large 28-acre property in Rathmore that is owned by NAMA; the reason the local authority was not informed that this property was in the NAMA portfolio; and if he will make a statement on the matter. [26659/16]
Amharc ar fhreagraThe Deputy will appreciate that NAMA does not own or sell properties. It has acquired loans and its relationship to the properties securing those loans is, like a bank, that of a secured lender. NAMA is bound by both statutory and contractual obligations of confidentiality. Neither NAMA nor I can comment on individual cases. Specifically, NAMA is subject to similar requirements as banks and other lenders that do not allow them to disclose information relating to individual debtors or information relating to properties that may have been pledged as security for NAMA loans.
More generally, it would not be feasible or practicable for NAMA, or indeed any bank or financial institution, to advise each local authority of each parcel of land that secures its loans. However, a large number of Government departments, State agencies and local authorities have engaged directly with NAMA in relation to their specific property requirements. In turn, NAMA has facilitated debtors and receivers to sell or lease properties, on commercial terms, to public bodies to meet a wide range of demonstrable public purposes.
I am advised, by NAMA, that such transactions include the sale and long-term leasing of over 2,000 houses and apartments for social housing; the sale of sites for new primary and secondary schools; the sale of sites and properties for the provision of primary healthcare facilities; and the sale of strategic sites to local authorities for urban economic, environmental and cultural regeneration. For example, NAMA facilitated the sale of the Hanging Gardens building on Limerick's Henry Street to Limerick City and County Council for redevelopment as a major commercial development hub to act as a catalyst for inward investment into the mid-west.
These transactions have been facilitated by NAMA in accordance with NAMA's established Board policy which gives public bodies, where feasible, first option on the purchase of property securing its loans at its assessed market value.
If the Deputy wishes to discuss a particular matter regarding NAMA, I would encourage him to contact NAMA directly using the dedicated email address for members of the Oireachtas - oir@nama.ie - which is regularly monitored.
165. Deputy Niall Collins asked the Minister for Finance if he proposed to recommence the option for persons to withdraw on a once-off basis up to 30% of their AVCs from their pension plan; and if he will make a statement on the matter. [26673/16]
Amharc ar fhreagraFinance Act 2013 introduced Section 782A of the Taxes Consolidation Act 1997 which provided members of occupational pension schemes with a once-off opportunity to access up to 30% of their Additional Voluntary Contributions (AVCs) prior to retirement. The option was available for a three year period from 27 March 2013, the date that Finance Act 2013 was passed into law, and came to an end on 26 March 2016.
There are a number of reasons why pre-retirement access to pension savings is not permitted on a general basis, the principal one being 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.
The pre-retirement access to a portion of AVCs which I introduced in Budget and Finance Act 2013 was allowed on a tax-neutral basis the contributions were tax-relieved at the individual's marginal rate on the way in and were taxed at the individual's marginal rate on withdrawal. This was a measure designed to enable rather than incentivise individuals to access part of their pension savings beyond their regular or compulsory pension contributions.
I am informed by the Revenue Commissioners that 18,671 individuals availed of the early access facility over the 3 year period to the amount of just over €200m gross in drawdowns, on which tax of some €79 million was paid.
It is important that individuals continue to provide for their retirement and, it would appear, most individuals with AVCs decided to preserve their AVC pension savings. I have no plans to re-introduce the measure along the lines suggested in the question.
166. Deputy Brendan Griffin asked the Minister for Finance if the budget 2016 measure of doubling the tax-free gift certificate for employees from €250 to €500 is applicable to previously existing gift cert schemes within organisations or if it is only applicable to new schemes; if the latter is the case, if this is an unintended consequence; if the matter will be addressed in the forthcoming budget to allow existing schemes to benefit from the change; and if he will make a statement on the matter. [26693/16]
Amharc ar fhreagraI am advised by Revenue that section 112B of the Taxes Consolidation Act 1997 provides that employers may provide tax free benefits to employees once a year provided the benefit does not exceed €500 in value and is not in the form of cash. This new exemption replaces the previous concession operated by Revenue known as the small benefits exemption which applied to benefits up to €250 in value.
The exemption applies to all vouchers or benefits granted on or after 22 October 2015, subject to the €500 limit and regardless of whether there already was a scheme in existence within the relevant company. Any benefit granted up to and including 21 October 2015 will be subject to the €250 limit and no employee may receive more than one benefit in a tax year.
167. Deputy Mattie McGrath asked the Minister for Finance if there are proposals or plans by a bank (details supplied) to engage in the sale of its loan book to so-called vulture funds; and if he will make a statement on the matter. [26713/16]
Amharc ar fhreagraAs the deputy is aware, significant progress has been made across the Irish banking sector in reducing the level of non-performing loans (NPLs) since the financial crisis. This has been primarily achieved by customers engaging directly with their banks and agreeing a sustainable payment plan which allows the customer an achievable path out of arrears, as well as protecting the value of the loan for the bank. In many cases these agreements have included elements of debt restructuring and writedowns. This is the most equitable means of dealing with problem loans for both borrowers and lenders, and I would urge all those in arrears to engage constructively with their bank in order to reach an appropriate repayment arrangement. In the vast majority of cases this achieves the best outcome for all involved.
Despite the significant progress made, the levels of NPLs in the Irish banking sector remain elevated by European standards. Banks are under pressure to reduce these exposures, both from their regulator and the market. Notwithstanding whether or not the State is a shareholder, it is the management and board of each institution that are tasked with developing and implementing a strategy to address this challenge.
In recent years banks have introduced multiple engagement channels to facilitate those customers who are reluctant to engage directly with them. Having exhausted these initiatives, if meaningful engagement is not forthcoming from particular customers the bank may be left with no option but to look at alternative solutions which could, as a last resort, include the sale of the loan.
I would note that the bank mentioned by the deputy has commented: "We keep all options under consideration. Our primary objective is to work with borrowers under stress to return their borrowings to a satisfactory position."
170. Deputy Michael Healy-Rae asked the Minister for Finance his views on a matter (details supplied) regarding earned income tax credits in the farming community; and if he will make a statement on the matter. [26720/16]
Amharc ar fhreagraAs the Deputy will be aware, an Earned Income Credit to the value of €550 has been in operation since January this year and is available to those with earned income who do not have access to the PAYE credit. This is of potential benefit to all self-employed individuals including farmers, foresters, fishermen and small food processors, where they have sufficient income.
Furthermore, there is a commitment in the Programme for Government, to work with the Oireachtas, to increase the Earned Income Credit to €1,650 by 2018. I will consider options towards achieving this commitment as part of my deliberations for Budget 2017.
171. Deputy Michael Healy-Rae asked the Minister for Finance his views on a matter (details supplied) regarding rates on agricultural diesel; and if he will make a statement on the matter. [26721/16]
Amharc ar fhreagraThe current rate of excise duty applied to a litre of argicultural diesel is 10.2c per litre while the current rate of excise applied to auto-diesel is 47.9c per litre. It is a longstanding practice of the Minister for Finance not to comment in advance of the Budget on any tax matters that might be the subject of Budget decisions.
