Written Answers Nos. 77-85
77. Deputy Jim Daly asked the Tánaiste and Minister for Justice and Equality if a use it or lose it by year end rule is or has been in operation within her Department when devolving funding to agencies under her remit on an annual basis; and if she will make a statement on the matter. [29200/16]
Amharc ar fhreagraThe Department does not have a defined rule in relation to this matter. Rather, the funding to agencies, under the remit of the Department, is provided through the annual estimates process and is subject to the standard Government accounting arrangements which provides for the surrender to the exchequer of unspent monies at year end. However, through prudent use of resources and using the mechanisms available such as the capital carryover provisions, where appropriate, and virement, the Department ensures that the best possible value and effectiveness is derived from all funding within the context of the rules of Government accounting.
78. Deputy Dara Calleary asked the Minister for Finance the representations he has made at EU level with regard to increasing scope for member states to increase capital expenditure following the European Commission President's statement on the matter to the European Parliament; and if he will make a statement on the matter. [29125/16]
Amharc ar fhreagraAt an EU level, Ireland supports the European Commission's €315 billion Investment Plan for Europe which includes the European Fund for Strategic Investment (EFSI). EFSI commenced operations in July 2015 and in May 2016 it was announced that it was part funding the Department of Health's primary care centres PPP project. There is also potential for EFSI to support a number of other Irish projects in areas such as broadband; renewable energy/energy efficiency; transport and water infrastructure; social infrastructure; and support for SMEs/commercial enterprises. President Juncker launched a Commission proposal to extend EFSI both in terms of time and financial capacity on 14 September last and Ireland is fully engaged in the discussions towards securing an agreement that will continue to support investment across the EU including in Ireland.
However Ireland still must comply with the two pillars of the fiscal rules, namely the Expenditure Benchmark and the pace of correction in the level of the structural balance. These rules constrain public spending to levels consistent with the financing capacity of the economy, ensure that spending is sustainably financed and help return the economy towards a balanced budget in structural terms. Therefore government expenditure, not classified 'off balance' sheet, such as PPP projects, is limited regardless of the source of funding.
Finally, I would point out that we are still running a deficit and our public debt remains high by international standards. The answer, therefore, is not simply about spending more; it is about getting more from each euro of taxpayers' money that is spent.
79. Deputy Robert Troy asked the Minister for Finance if his attention has been drawn to the consequences of the amendment made to the AMRF where persons are only entitled to 4% per annum with the remainder held in the pension fund until the person reaches 70 years of age with the exception for persons with a guaranteed income of €12,700 per annum; if this limit was introduced to ensure that persons who do not have sufficient contributions paid to receive a State pension and then cash in a pension policy are left dependent on the State non-contributory pension; if he will examine introducing an exemption for persons who have sufficient contributions for State pension and need to cash in the policy for reasons such as health; and if he will make a statement on the matter. [29019/16]
Amharc ar fhreagraI am informed by Revenue that an individual in a defined contribution pension savings arrangement has the option of putting the funds accumulated under the arrangement into an Approved Retirement Fund (ARF) on retirement, subject to conditions.
Where such an individual is under the age of 75 at the time of exercising the option and does not meet the requirement of having a minimum guaranteed pension income for life of €12,700 per annum, he or she is required to set aside an amount of €63,500 (or the remainder of the pension fund if less than €63,500 after taking a retirement lump sum) by investing the amount in an Approved Minimum Retirement Fund (AMRF) or by the purchase of an annuity. The purpose of the AMRF is to ensure that an individual, without the minimum guaranteed pension income for life, has a capital nest-egg to provide for the latter years of his or her retirement.
The changes to the AMRF arrangements which I introduced in Finance Act 2014, with effect from 1 January 2015, allow an AMRF owner draw down up to 4% of the value of the fund assets on one occasion annually until he or she either meets the guaranteed pension income requirement or attains the age of 75, at which point, the AMRF automatically becomes an ARF and any remaining funds can be drawn down at the owner's discretion. In general, drawdowns from AMRFs (and ARFs) are subject to income tax, PRSI (up to age 66) and USC.
The 4% annual draw down arrangement, replaced the facility that existed previously, whereby an AMRF owner could draw down the accrued income and gains of the AMRF (subject to tax etc.) as and when they wished. This change was prompted by a concern to allow all AMRF owners, particularly those with relatively modest retirement funds, access to a more certain level of annual drawdown from their AMRF, rather than the uncertain level of drawdown that dependence on investment performance had given rise to heretofore. This is particularly important for those individuals whose AMRF constitutes a significant part of their retirement funds.
As indicated earlier, the primary purpose of the minimum guaranteed pension income condition applying to the ARF option is to ensure that where this condition is not met, that there is a capital nest egg available to the individual in older age. This condition has been in place since the inception of ARFs in 1999. At that time, it was set at £10,000 which, on the introduction of the Euro in 2002, converted to its Euro equivalent of €12,700. This was significantly higher than the maximum rate of the contributory State pension payable in 1999 (i.e. £4,628 or €5,876). It is clear, therefore, that there was no intended link between the State pension and the minimum guaranteed income limit, and in addition that it was never envisaged that the State pension on its own would be sufficient to satisfy the guaranteed pension income test. Thus, it was always envisaged that an individual would need an additional source of pension income to meet the requirement.
I should add, that when I extended the ARF option to all defined contribution arrangements in Finance Act 2011, the conditions to be satisfied to allow an individual access to an ARF were also amended. In the case of the guaranteed pension income requirement, this was significantly increased to €18,000 (i.e. one and a half times the annual rate of the contributory State pension at the time) and it was my intention that it would track the annual rate of the contributory pension over time. However, I rescinded this change in Finance Act 2013 and the guaranteed pension income requirement has remained at €12,700 since.
In light of the fact that the contributory State pension has more than doubled since 1999 while the minimum guaranteed pension test for ARF purposes remains at €12,700, the gap between the two has narrowed appreciably. If the two were to be aligned, it would have to apply across the board and not just for the type of special case related to health mentioned in the question.
In that regard, however, I have no plans at this time to make such a change.
80. Deputy Clare Daly asked the Minister for Finance further to Parliamentary Question No. 193 of 27 September 2016, if he will provide a breakdown of the number of multiple property owners in ranges (details supplied) for each of the years 2013 to 2015 inclusive; and the way in which confidentiality may be breached should the ranges requested be provided. [29020/16]
Amharc ar fhreagra82. Deputy Clare Daly asked the Minister for Finance further to Parliamentary Question No. 193 of 27 September 2016, if he will provide the total number of properties owned by the 11 persons in the 200-300 category; the total number of properties owned by the 11 persons in the 301-400 category; the total number of properties owned by the fewer than ten persons in the 401-500 category; and the total number of properties owned by the 14 persons in the 500-plus category, in tabular form. [29061/16]
Amharc ar fhreagraI propose to take Questions Nos. 80 and 82 together.
I am advised by Revenue that as regards the numbers of properties owned by multiple property owners, the table shows the numbers of properties in the same ranges as provided in response to Parliamentary Question Number 193 of 27 September 2016.
|
Numbers of Properties Owned Between |
Total Number of Properties |
|
200 - 300 |
2,513 |
|
301 - 400 |
3,723 |
|
401 - 500 |
3,250 |
|
Greater than 500 |
16,301 |
In relation to Question 29020/19, I am advised by Revenue that a breakdown of numbers of owners of 1,000 plus properties in the ranges requested by the Deputy cannot be provided due to confidentiality considerations. However, I can inform the Deputy that only 6 liable persons own more than 1,000 properties and Revenue have confirmed that all 6 are approved housing bodies (also sometimes known as voluntary housing associations).
As regards the Deputy's query on confidentiality, the provisions of Section 851A of the Taxes Consolidation Act 1997 oblige Revenue to treat taxpayer information confidentially. Confidentiality is central to Revenue's relationship with its customers but, in recognition of the value of providing a broad range of statistical insights into tax administration, Revenue attempts to balance the requirements of confidentiality while providing as much useful information as possible.
There exists considerable best practice regarding the disclosure of statistical information and confidentiality. A Statistical Disclosure Control document is published on the Revenue website at http://www.revenue.ie/en/about/statistics/statistical-disclosure-control.pdf. This document outlines Revenue's approach to ensuring the balance (between the need to inform and the safeguarding of taxpayer confidentiality) is achieved in the production of Revenue Statistics. It may be of interest to the Deputy to note also that the Central Statistics Office operates a similar approach to statistical confidentiality.
Over the last year, Revenue has redesigned its statistics webpage (http://www.revenue.ie/en/about/statistics/index.html ) to provide improved coverage and depth of the statistical information published, and this information is now also published in more open or machine readable formats where possible to further aid researchers and other users. This places Revenue at the forefront of the Government's Open Data initiative to provide information in as open and transparent a manner as possible.
81. Deputy Joan Collins asked the Minister for Finance the potential loss of jobs and the industries which would be affected if Ireland was to introduce a 0.1% financial transaction tax on the trading of bonds and shares and 0.1% on the value of derivative agreements and financial market bets; if he will provide evidence in this regard; and if he will make a statement on the matter. [29035/16]
Amharc ar fhreagra84. Deputy Joan Collins asked the Minister for Finance his views of the potential loss of jobs and the industries which would be affected if Ireland was to introduce a 0.1% financial transaction tax on the trading of bonds and shares and a 0.1% on the value of derivative agreements and financial market bets; and if he will provide evidence of same. [29090/16]
Amharc ar fhreagra88. Deputy Joan Collins asked the Minister for Finance the reason the Government will not introduce a financial transaction tax; if a study has been done which included a job-proofing exercise; and if so if he will make that study available. [29129/16]
Amharc ar fhreagraI propose to take Questions Nos. 81, 84 and 88 together.
The rates presently being discussed in the EU Commission proposal for a Financial Transactions Tax (FTT) are 0.1% on securities (shares and bonds) and 0.01% on derivatives and not the 0.1% rate on derivatives mentioned by the Deputy in her question.
In relation to discussions at EU level, the position taken by this Government and the previous Government consistent position is that a Financial Transactions Tax would be best applied on a wide international basis to include the major financial centres. This would prevent the danger of activities gravitating to jurisdictions where taxes are not levied on financial transactions with a likely loss of employment and tax revenue. Notwithstanding this, the previous Government was not prepared to stand in the way of EU Member States that wished 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 European Union in January 2013.
The UK intention to commence the process of leaving the European Union increases the difficulties of introducing such a tax given the potential for the UK to compete more strongly using different domestic measures for such financial services activities outside the EU.
In any event despite significant engagement by the relevant Member States there has been no agreement on the introduction of an FTT and it is not clear whether agreement will be achieved in the near future.
Ireland already has a tax on financial transactions, a Stamp Duty on transfers of shares in Irish incorporated companies, which currently stands at 1%. The yield from this charge in 2015 was €424.13 million and I understand receipts to end September 2016 were over €287 million and is expected to raise up to €498m in 2016. If Ireland was to participate in the FTT it would require us to abolish this Stamp Duty.
In relation to the question raised by the Deputy on the potential economic and employment impact of an FTT in Ireland I would refer to the joint Central Bank of Ireland/ESRI report published in April 2012 which considered the possible economic impact of the application of FTT (https://www.esri.ie/pubs/BKMNEXT217.pdf). The report analyses the potential economic impact on the financial industry at that stage based on the Commission's 2011 FTT proposal.
While I appreciate that the study may be somewhat dated at this point the report's conclusions are a useful indicator of the possible impact of introducing an FTT in Ireland. Given that it is Government policy not to introduce an FTT, I do not consider it prudent to allocate resources to further studies or exercises in this regard at this time.
The joint Central Bank/ESRI report recognises that assessing the likely impact on employment and tax yields due to migration of activity is difficult. This continues to be the case as it is difficult to assess behaviour arising from the introduction of such a tax and second round impacts on investment and employment.
In 2012 the financial sector's share of overall economic output in Ireland was around twice as large as that of many other European countries and in 2016 it remains a significant element within the economy in terms of employment and gross value added. There is significant employment in the sector with around 35,000 individuals employed in international financial services.
The report sought to identify financial services sectors which could be impacted by an FTT. It suggested that insurance, banking and financial intermediation, and fund management and security broking were potentially vulnerable to an FTT. Fund management in particular has been one of the growth areas of the financial services sector in Ireland with some large employers and with a total estimated 13,000 employed in the sector.
The report concludes that the firms with the highest propensity to migrate following the introduction of an FTT are likely to be in the non-banking sectors which account for the smallest share of gross value added. Nevertheless, it indicates that the relocation of even a small number of large IFSC banks or fund administration firms would result in a loss of income tax revenue, corporation tax revenue, and an increase in unemployment. This would likely still be the impact now of introducing a FTT.
I remain of the view that there are potentially significant negative employment and economic impacts from introducing an FTT in Ireland and I have no plans to introduce such a tax.
83. Deputy Mick Barry asked the Minister for Finance the rationale behind the charging of VAT on the public service obligation item on utility bills; and if he will make a statement on the matter. [29067/16]
Amharc ar fhreagraWith regard to the application of VAT on electricity bills supplied by utility companies, in accordance with section 37(1) of the Value-Added Tax Consolidation Act 2010, the amount on which VAT is chargeable is the total consideration receivable by the supplier, "including all taxes, commissions, costs and charges whatsoever", but not including the VAT itself. This reflects EU VAT law, with which Irish tax law must comply. In this regard, Article 78 of the EU VAT Directive provides that the taxable amount shall include "taxes, duties, levies and charges, excluding the VAT itself".
In this respect, where the charge for a supply of service, such as an electricity bill, includes the Public Service Obligation levy, VAT law dictates that VAT should be calculated on the PSO levy element of the charge as well as the charge for the service. The same situation applies in the case of other excises, including for example excises on petrol, auto-diesel, tobacco and alcohol products.
85. Deputy Bobby Aylward asked the Minister for Finance the position regarding the sale of the IBRC loans associated with the Whitfield Clinic in Waterford; the originating financial institutions associated with the Whitfield Clinic loans; the original financial institutions' book value of the loans associated with the Whitfield Clinic; the IBRC independent valuation of the Whitfield Clinic loans; the IBRC sale valuation achieved for the loans associated with the Whitfield Clinic; the completion date of IBRC's sale of the loans associated with the Whitfield Clinic; the name and beneficial owner of the successful purchaser of the IBRC loans associated with the Whitfield Clinic; details of other bids to IBRC associated with IBRC's sale of the loans associated the Whitfield Clinic in Waterford; the total of any monetary proceeds paid to NAMA by the special liquidator to IBRC in excess of the independent valuation in relation to the Whitfield loans under the exceptional liquidity assistance facility in the IBRC Act; and if he will make a statement on the matter. [29107/16]
Amharc ar fhreagraI am advised by the IBRC Special Liquidators that for reasons of customer confidentiality and commercial sensitivity, they are precluded from providing the details sought in relation to the sale of the loans concerning individual customers.
