Written Answers Nos. 105-14
105. Deputy Clare Daly asked the Tánaiste and Minister for Justice and Equality further to Parliamentary Question No. 102 of 25 January 2017, the reason the question of her seeking to have the Pitchford inquiry's terms of reference extended such that Ireland is included in that inquiry does not arise (details supplied). [6397/17]
Amharc ar fhreagraI refer the Deputy to my previous answers to a number of recent Questions on this issue. As I have stated previously, the UK's Undercover Policing Inquiry was established by the UK Government in 2015 to investigate and to report on the undercover police operations conducted by English and Welsh police forces in England and Wales since 1968. It is chaired by Lord Justice Pitchford. As the Deputy will appreciate, the establishment of the inquiry and its terms of reference were and are matters solely for the UK Government in accordance with UK law. It is my understanding that representations seeking the extension of the inquiry's terms of reference outside England and Wales were made and the UK Home Secretary decided that the terms of reference of the inquiry would not be so amended.
While the issue of my requesting the extension of a UK inquiry does not arise, as I have indicated to the House previously should anything emerge from the findings of the UK's Undercover Policing Inquiry that would be relevant to policing in this jurisdiction I will consider it fully and take any action that may be required.
106. Deputy Richard Boyd Barrett asked the Minister for Finance the rationale for retired public sector workers on pre-1995 contracts having to pay USC which may see them less well off than their counterparts on post-1995 contracts; and if he will make a statement on the matter. [6155/17]
Amharc ar fhreagraThe Universal Social Charge (USC) was introduced in Budget 2011 to replace the Income Levy and Health Levy. It was a necessary measure to widen the tax base, remove poverty traps and maintain revenue to reduce the budget deficit. It is a more sustainable charge than those it replaced and is applied at a low rate on a wide base. However, the base for USC does not include payments made by the Department of Social Protection, including the State pension.
As the Deputy may be aware, the USC was reviewed by my Department in 2011 and the issue of USC applying to occupational pensions of retired public service who entered the public service before April 1995 was examined as part of that review. Such individuals are (or were) liable to modified rate PRSI, which does not generate an entitlement to the State Pension. In retirement therefore they receive an occupational pension only, and do not receive a separate State Pension unless as a result of PRSI contributions made in another employment during their working life.
It was decided not to exempt the occupational pensions of these individuals from the USC charge as an exemption would be very costly and difficult to achieve, and it could involve all income earners with the equivalent income benefiting from the exemption. In addition, it would also undermine the principle of the USC being applied to income with few exceptions.
However, as a result of the review of the USC, in Budget 2012 the entry threshold to USC was increased from €4,004 to €10,036 per annum, and the threshold was subsequently increased further in Budgets 2015 and 2016, to the current threshold of €13,000. This exemption threshold equalises the position for single individuals whose sole source of income is the State Contributory Pension with Public Service pensioners whose pension is at an equivalent level. It is estimated that over 700,000 income earners will not be liable to USC from 2017.
Furthermore, the current Government has committed to continuing the process of phasing out the USC in future Budgets, with a particular focus on low and middle-income earners, subject to having the required fiscal space.
107. Deputy Bernard J. Durkan asked the Minister for Finance if he is satisfied regarding the amount of working capital available to the hotel and catering industry; and if he will make a statement on the matter. [6389/17]
Amharc ar fhreagraAs the Deputy is aware, small and medium sized businesses, including those in the hotel and catering industry, play a central role in the sustainable recovery of the Irish economy. Government policy is focused on ensuring that all viable SMEs have access to an appropriate supply of credit from a diverse range of bank and non-bank sources.
The Deputy will also be aware that in my role as Minister for Finance I have no direct function in the relationship between the banks and their customers. I have no statutory function in relation to the banking decisions made by individual lending institutions at any particular time and these are taken by the board and management of the relevant institution. This includes decisions in relation to products as determined by the banks.
All viable businesses operating in Ireland should have the opportunity to access sufficient finance to meet their enterprise needs in a manner that supports growth and employment in the economy. As the Deputy may be aware, section 3.5 (Ensuring Finance for Growth) of the Action Plan for Jobs 2017 (APJ) sets out a range of commitments to ensure viable SME's can access appropriate finance at a reasonable cost from both bank and non-bank sources.
In line with Action 62 of the APJ 2017, officials from my Department will collate and examine data from AIB and Bank of Ireland on a monthly basis, including data pertaining to the various sectors. Furthermore, my officials meet the banks on a quarterly basis to ensure an informed understanding of the wider SME bank lending environment which assists the development and implementation of policies aimed at ensuring SME access to finance and increased competition in the SME lending sector.
In terms of monitoring the requirements for SMEs, my Department commissions biannual surveys to ascertain the demand for credit by SMEs. This survey series, most recently conducted by Behaviour and Attitudes on behalf of my Department, is the most comprehensive survey of SME credit demand in Ireland, covering 1,500 respondents and involving over 6,000 direct telephone calls to SMEs. SMEs of all sizes trading in all sectors, excluding property development and speculative activities, are included. The survey covers demand for credit from both bank and non-bank sources.
I would draw the Deputy's attention to the most recently published Department of Finance SME Credit Demand Survey covering the April to September 2016, which can be found at www.finance.gov.ie. The results of this survey show that, when pending applications are excluded, 84% of credit applications to banks were approved or partially approved. Demand for credit remains subdued and the latest survey shows only 22% of SMEs in the Hotel and Restaurant sector requested bank finance in the previous six months down from 34% in September 2015.
Purchases, replacement or lease of new vehicle/equipment is now provided as the main reason for applying for bank finance with 29% stating this is why they requested bank finance. Working capital/cash flow requirements were provided as the second highest reason for applying for bank finance with 27% of respondents stating that they required finance for this purpose. When asked about sources of finance for working capital, internal funds/retained earnings were the main finance source of working capital with 73% of working capital coming from this source (up 6%). The survey also showed continued positive trends in terms of trading performance, profitability and employment.
The Government remains committed to the SME sector, as reflected in the Programme for a Partnership Government, and sees it as a key engine of ongoing economic growth. Consequently, my Department and the Credit Review Office, working with the other relevant Departments and Agencies, will continue to monitor the availability of both bank and non-bank credit on both a macro and sectoral basis in order to ensure that sufficient access to finance is available to facilitate participants in the SME sector to reach their full potential in terms of growth and employment generation.
108. Deputy Declan Breathnach asked the Minister for Finance the reason the number of seizures of illicit cigarettes and tobacco has dropped 16% from 7,154 seizures in 2015 to 6,024 in 2016; and if he will make a statement on the matter. [6147/17]
Amharc ar fhreagraI am assured by Revenue that action against illegal activity involving tobacco products is a central element of their work and that significant successes continue to be made in tackling this illegal trade. They have advised me that, in 2016, 6,100[1] tobacco seizures were made which resulted in approximately 44.5m cigarettes and 1,500kgs of tobacco being seized by Revenue. The quantities of cigarettes and other tobacco products seized and data on the number of tobacco seizures made by Revenue in the years 2012 to 2016 are shown in the table.
|
Year |
Quantity of seized cigarettes |
Quantity of other tobacco KGs |
Number of Tobacco seizures |
|
2012 |
95,604,730 |
5,277 |
9,503 |
|
2013 |
40,844,800 |
4,203 |
6,888 |
|
2014 |
53,445,350 |
9,824 |
6,866 |
|
2015 |
67,917,500 |
2,364 |
7,154 |
|
2016 |
44,563,810 |
1,526 |
6,100 |
The table demonstrates that while Revenue continues to prioritise enforcement action in this area and has maintained the level of resources allocated to this activity, the volumes seized and the number of seizures can vary significantly. This occurs because smugglers are constantly looking for new ways to avoid detection, and adapt their operations in response to seizures by Revenue and other law enforcement agencies internationally. Seizure statistics are also very variable because of the effect of individual very large seizures on annual data. Revenue continually reviews the ways in which it acts against this illegal activity, to ensure detection and seizure of illegal cigarettes and to carefully monitor trends and patterns in the illicit trade so that the response can be adjusted accordingly.
Revenue advise me that the same factors that impact seizure quantities also affect the number of seizures and that there has been no reduction in the level of checking undertaken at ports and airports. There has been a reduction in the number of detections made at Irish airports in 2016, but this mirrors a similar pattern experienced in a number of other airports in other jurisdictions including the United Kingdom and reflects a shift in the pattern of tobacco smuggling of the kind referred to above as smugglers react to high levels of seizures in airports in particular.
In terms of assessing the overall performance in tackling illegal tobacco, a reliable measure is the IPSOS/MRBI surveys of illicit tobacco conducted for Revenue and the National Tobacco Control Office. The surveys indicate that in 2015 12% of cigarette consumption was illicit, up from 11% in 2014 but down on 2011 and 2012 levels, of 15% and 13% respectively.
[1] Headline figures published in January 2017 noted 6,024 seizures in 2016. This information was provided before year end and has since been revised to reflect the total number of seizures for 2016.
109. Deputy Barry Cowen asked the Minister for Finance if he had any meetings with private or third party investors that have proposals to invest in social or affordable housing; the date of the meetings; and the details of the proposals discussed. [6173/17]
Amharc ar fhreagraIn an effort to provide the Deputy with a thorough reply, this question has been considered more widely than just meetings which I attended, to also include those meetings attended by officials from my Department.
Every effort has been made to identify meetings relevant to the Deputy's question, and the timeframe used as the basis for identifying these meetings is 1 March 2016 to 31 January 2017.
Please see the below list retrieved from our records of identified relevant meetings that occurred during the aforementioned timeframe. The Deputy should note that the Regulation of Lobbying Act 2015 requires firms to record all lobbying approaches made by them to Government Departments and Agencies and may provide details of approaches by firms which were not recorded by sections within the Department.
|
Date |
Department Attendees |
Stakeholder |
Purpose |
|
07/04/2016 |
Officials from Shareholder Management Unit |
Irish League of Credit Unions |
A Proposal for Irish credit unions to fund the provision of social housing |
|
08/04/2016 |
Officials from Shareholder Management Unit |
Credit Union Development Association (CUDA) |
Review of progress of CUDA Social Housing Finance Initiative |
|
13/04/2016 |
Officials from Shareholder Management Unit |
Irish League of Credit Unions |
A Proposal for Irish credit unions to fund the provision of social housing |
|
29/06/2016 |
Officials from Banking Division. |
Allsop Ireland |
Presentation on social/affordable housing proposal. |
|
11/08/2016 |
Officials from Shareholder Management Unit |
WK Nowlan Real Estate Advisors |
Discussions re social and affordable housing |
|
05/09/2016 |
Officials from Shareholder Management Unit |
WK Nowlan Real Estate Advisors |
Discussions re. social and affordable housing |
|
28/09/2016 |
Minister. Officials from Shareholder Management Unit |
Cairn Homes |
Discussion on measures to promote affordable house building |
|
18/10/2016 |
Minister of State Officials from Banking Division. |
Cairn Homes |
Discussion on measures to promote affordable house building |
|
01/12/2016 |
Officials from Shareholder Management Unit |
WK Nowlan Real Estate Advisors |
Discussions re. social and affordable housing |
|
Throughout 2016 |
During 2016 officials from the Shareholder Management Unit met an entity called Arizun to hear their ideas around leasing units to LA's for social housing purposes |
ARIZUN |
Discussions re. social and affordable housing |
110. Deputy Pearse Doherty asked the Minister for Finance when NAMA began to use section 110 status with regard to the tax payment of €158 million by NAMA to the Revenue Commissioners and in view of the prohibition of section 110 status in relation to mortgages related to Irish property; the rationale for using this status; if the organisation used this status in joint enterprise with any private entities; and if he will make a statement on the matter. [6245/17]
Amharc ar fhreagraNAMA's tax affairs, and the legal structures it utilises to carry out its mandate, are a matter for NAMA to determine within the perimeter of its mandate and applicable law, including tax law. As we know the establishment of Section 110 companies is completely legal as it is permitted under Irish law and tax codes. As we also know, this House recently moved to change legislation governing the tax treatment of certain activities carried out within Section 110 companies.
In 2009, prior to passing the NAMA Act and prior to the establishment of NAMA, as part of the efforts of the Government of the time in planning for NAMA, Section 110 company structures were evaluated, considered and adopted as being central to ensuring tax neutrality and respecting the tax equivalent treatment of NAMA as a commercial body.
In 2010, resulting from this planning, NAMA established its Group structure which included a number of Section 110 companies. I am advised that the proposed structure was first presented to the NAMA Board in February 2010 and was formally approved by the Board in June 2010. The Revenue Commissioners were informed of the proposed structure in 2010 and raised no objection to it.
It is important to note that NAMA's use of Section 110 structures is not new information. NAMA has repeatedly and publicly disclosed its utilisation of SPVs, which include Section 110 structures, in its Annual Reports. The C and AG has also been aware of NAMA's use of Section 110 company structures since NAMA's inception. In October 2010, the C and AG published its Special Report entitled "National Asset Management Agency - Acquisition of Bank Assets." Appendix E within this report outlines in detail NAMA's Group Structure and its use of Section 110 Companies. It also contains a detailed description of the principal tax benefits that accrue to a qualifying Section 110 company. This report is publically available at: https://www.nama.ie/fileadmin/user_upload/SpecialReportNAMAAcquisitionOfBankAssetsOct2010.pdf.
NAMA's accounts have been audited, since inception, by the C and AG and filed with Revenue and reflect activity by NAMA that is, and has been, operating in full compliance with the tax code. Following the change that we, as a legislature, made to the tax law governing Section 110 companies last year, NAMA paid €158 million to the Revenue Commissioners as a preliminary tax payment to reflect its expected tax obligations under this new tax regime. Thus, NAMA has always and continues to act in accordance with tax law. Through this payment, NAMA is now simply moving, as would be expected, to operate in line with the recent change to tax legislation.
Under Section 214 of the NAMA Act, NAMA, the Agency - which owns 49% of the NAMA Group companies, is exempt from income tax, corporation tax and capital gains tax. NAMA Group companies, which contain all of the assets, liabilities and activities of NAMA, do not benefit from such an exemption and are tax-equivalent to any other market operator.
The tax exemption of the NAMA Agency does not adversely affect the Exchequer given that any surplus generated by the NAMA Group companies will accrue to the NAMA Agency and will vest in the State on a tax neutral basis.
The purpose of utilising Section 110 companies was to ensure that there was no unnecessary cash leakage from within the NAMA Group. This is no different to any other market operator. In NAMA's case, this was particularly important given the need to redeem guaranteed senior debt expeditiously and also the need to apply available cashflow to fund development projects ultimately intended to preserve and enhance the State's return from acquired assets, as required by Section 10 of the NAMA Act. Under an alternative tax regime, the amounts applied by NAMA towards debt redemption and development funding may well have been different.
I would also point out to the Deputy that all NAMA proceeds, whether through tax payments or a dividend surplus at dissolution, are ultimately destined to be transferred to the State.
I am advised that some NAMA entities are minority shareholders in a limited number of investments. NAMA is a passive investor and has no active management role or controlling interest in these structures. The corporate structures relating to NAMA's minority interests are ultimately a matter for the investment vehicle managers and/or directors. I am further advised that, in any event, the investment vehicles in which NAMA has an interest have not, to NAMA's knowledge, availed of the Section 110 tax exemptions.
111. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 335 of 17 January 2017, when a response will issue; and if he will make a statement on the matter. [6246/17]
Amharc ar fhreagraThe information requested has now been compiled and I expect that a response will issue this week.
112. Deputy Barry Cowen asked the Minister for Finance if he has met with financial institutions or other third parties to discuss proposals for long-term leasing arrangements between local authorities and financial institutions as a means of providing social or affordable housing; and the names of the institutions he has met, the date of the meetings and type of the proposals under discussion. [6276/17]
Amharc ar fhreagraAs the Deputy will be aware, responsibility for housing policy generally, and the Government's housing action plan, "Rebuilding Ireland", is under the remit of my colleague the Minister for Housing, Planning, Community and Local Government. It is within that context that discussions on proposals for leasing arrangements would take place. On this basis I advise the Deputy that this question may be more appropriately addressed by the Minister for Housing, Planning, Community and Local Government.
113. Deputy Kevin O'Keeffe asked the Minister for Finance if he will consider extending a specific tax concession as announced in the recent budget (details supplied) to sporting organisations. [6305/17]
Amharc ar fhreagraI assume the Deputy is referring to the tax relief available on certain income from the long term leasing of agricultural land under Section 664 of the Taxes Consolidation Act 1997, which was amended and extended in Budget 2015. The relief is available, subject to a maximum limit, where farm land is leased to a qualifying lessee for a period of 5 years or more.
The 2014 Agri-Taxation Review found that long-term leasing has a number of advantages over the more traditional conacre system and it recommended the continuation and enhancement of measures to assist in rebalancing the market in its favour, including the amendments brought forward to this tax incentive. This tax relief has a very specific policy aim of accelerating land mobility and productivity through making additional agricultural land available to farmers on a medium to long term basis for husbandry purposes.
There are a number of specific criteria that must be met in order to qualify for this relief, including the use of the land itself, that the lease must be completed in writing, it must run for a minimum of 5 years, and that it cannot be made between connected parties. The incentive is targeted and designed to achieve a specific policy objective in terms of making more land available for husbandry and therefore increased agricultural production. Extending the relief such that it was available for the leasing of agricultural land to sporting organisations, would have no impact on the achievement of the socio-economic objectives for which the exemption was designed, and could potentially, lead to circumvention of the original policy intention.
114. Deputy Catherine Murphy asked the Minister for Finance the number of visits by Customs and Excise officers to Casement Aerodrome in each of the years 2013 to 2016 and to date in 2017; the number of those visits that were not notified in advance to the owners, officials and staff of the location; and if he will make a statement on the matter. [6306/17]
Amharc ar fhreagraI am advised by Revenue that a decision on whether to undertake a visit to or an intervention at an aerodrome is dictated by Revenue's assessment of risk, having regard to a range of factors, including intelligence. Where visits or interventions are undertaken, there is no prior notification of same.
The necessity for and frequency of compliance visits to any particular aerodrome is kept under ongoing review. Having regard to the risk assessment undertaken by Revenue, no such visits were undertaken by Revenue for the years concerned or to date in 2017.
