Tuesday, 28 Mar 2017

Written Answers Nos 106-128

Tax Yield

Ceisteanna (106)

Pearse Doherty

Ceist:

106. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue that would be raised by increasing the Revenue Commissioners' personnel (details supplied). [14872/17]

Freagraí scríofa

Minister for Finance

I am advised by Revenue that Revenue's Comprehensive Review of Expenditure 2014 estimated that by increasing audit staffing resources by c.100 staff an additional exchequer yield of €50m per annum could be achieved. On this basis it is estimated that by increasing audit staffing resources by c.125 staff an additional exchequer yield of €62.5m per annum could be achieved. It was estimated that by increasing staff on compliance projects such as oils, tobacco and alcohol by 100 could raise €20m per annum.

It was noted that the investment in the training and development of a Revenue auditor or investigator 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 in recent years. 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, provide service for compliance, by making it easier and less costly to voluntarily comply. 

In the preparation for the Estimates of 2015, 2016 and 2017, Revenue made business cases for additional resources, which I fully supported. Over the Budgets of 2015, 2016 and 2017, an increase of 266 (126, 50 and 90) in additional Revenue resources was provided to deal with a wide variety of staffing requirements across audit and compliance functions, debt management functions, international tax, etc. This Government will continue to carefully consider any request by Revenue for additional resources.

Mortgage Interest Relief Data

Ceisteanna (107)

Pearse Doherty

Ceist:

107. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue that would be raised by reducing mortgage interest deductions against rent for landlords from 75% to 0%, 10%, 20%, 30%, 40%, 50% and 60%, excluding cases in which a 100% interest deduction is allowable in respect of residential property which is let for a period of three years to a tenant or tenants in receipt of certain social housing supports. [14873/17]

Freagraí scríofa

Minister for Finance

I am informed by Revenue that it does not currently require rental income to be returned in a manner that would enable private residential rental accommodation income, reliefs and allowances to be separately identified from income, reliefs and allowances in respect of commercial rental property.

I assume that the cases the Deputy is suggesting would be excluded from the proposed reduced mortgage interest deductions are those in receipt of rental income in respect of residential property that is let for a period of three years to a tenant or tenants in receipt of certain social housing supports and which qualifies for the social housing tenancy incentive introduced in Finance Act 2015.  This incentive works on the basis of allowing qualifying landlords to claim additional interest relief, up to 100% of qualifying interest, on an arrears basis at three-yearly intervals, subject to meeting the required criteria.  The first claims are therefore due to be submitted in 2019, in respect of qualifying lettings in the period 2016 to 2018, so it is not yet possible to separately identify these cases and the rental income arising therefrom.

It is not therefore possible to provide the annual yield to the Exchequer that would be raised by reducing mortgage interest deductions to a range of different levels, while retaining 100% interest relief for qualifying social housing tenancies, as outlined by the Deputy. 

Notwithstanding the above, the estimated cost for the phased restoration of 100% mortgage interest deductibility for residential landlords, introduced in Finance Act 2016, may be of assistance. The deduction will be increased by 5 percentage points each year, with the first increase from 75% to 80% having taken effect from 1 January 2017.  Based on personal Income Tax returns filed for the year 2014, the latest year for which this information was available, and making certain assumptions about the data, it was estimated that the full-year cost of the 2017 increase from 75% to 80% deductibility will be €14 million, and the full-year cost of the restoration from 75% to 100% by 2022 will be €70 million. Extrapolating from these estimates, a reduction in the allowable deduction for mortgage interest for all residential landlords from the current position of 80% to 0%, 10%, 20%, 30%, 40%, 50% and 60% could yield in the order of €224 million, €196 million, €168 million, €140 million, €112 million, €84 million and €56 million respectively.

Question No. 108 answered with Question No. 102.

Tax Data

Ceisteanna (109)

Pearse Doherty

Ceist:

109. Deputy Pearse Doherty asked the Minister for Finance the expected net effect of any measures carried over for 2018 as a result of budget 2017 measures; and if he will provide a detailed breakdown thereof, including the way they are accounted for in the fiscal space projections. [14875/17]

Freagraí scríofa

Minister for Finance

The carryover cost in 2018 of tax measures introduced in Budget 2017 was estimated to be in the region of €170 million. It is important to point out that the exact impact of carryover will be reviewed as part of the normal Budgetary 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. A summary of these measures and their impact is set out in the following table.

Summary of measures and their impact

Tax-Head	Carryover effect €m
Income Tax	-69
Universal Social Charge	-55
Capital Acquisition Tax	-3
Excise Duties	-1
Capital Gains Tax	+1
Section 110 and Fund Changes*	-15
Tackling offshore tax evasion*	-30
Total	-172

*The carryover is calculated as the difference between the effect on a full year and that on 2017. For example, in relation to Section 110, it was estimated at the time of Budget 2017, that these changes would yield €50 million in 2017 and €35 million is a full year, which equates to a negative carryover of €15 million into 2018. While the yield from tackling offshore evasion would result in a one-off yield in 2017 of €30 million, and therefore represent a negative carryover of €30 million in 2018.

On the expenditure side, which is a matter for my colleague the Minister for Public Expenditure and Reform, Mr Paschal Donohoe T.D., and as detailed in Parliamentary Question number 184 of 16 February 2017, there is an estimated carryover into 2018 of approximately €0.4 billion arising from certain increases in Departmental expenditure included in the Budget Estimates for 2017. The spending review, scheduled to be carried out in advance of Budget 2018, will among other issues, consider the policy options for meeting the additional cost arising in 2018 of the Budget 2017 expenditure measures.

Carryover costs impact the fiscal space in the year in which they arise.

Tax Exemptions

Ceisteanna (110)

Pearse Doherty

Ceist:

110. Deputy Pearse Doherty asked the Minister for Finance the estimated cost to the Exchequer of dividing the capital gains tax categories into passive and active and applying a 40% rate to the passive tax activity, for example, buying shares, and 35% to active engagement, for example, selling on a business. [14876/17]

Freagraí scríofa

Minister for Finance

I am advised by Revenue that, as tax returns do not provide a basis for compiling separate estimates of the amount of Capital Gains Tax liability associated with passive and active activity, there is no basis on which Revenue could provide the information requested by the Deputy. 

Tax Yield

Ceisteanna (111)

Pearse Doherty

Ceist:

111. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue which would be generated by the implementation of measures (details supplied). [14877/17]

Freagraí scríofa

Minister for Finance

I am informed by Revenue that the yield from applying a 3% betting duty on remote and in shop bets is estimated at €150m in a full year.

The additional yield from increasing the commission based tax on betting intermediaries to 20% and to 30% is estimated at €0.6m and €1.9m respectively in a full year.

These estimated yields are based on the assumption of no change in behaviour on the part of customers or suppliers of betting services.

As regards the difference between placing the 3% on each bet and on winnings, Revenue has no basis on which to estimate the yield or cost of this change.

Tax Yield

Ceisteanna (112)

Pearse Doherty

Ceist:

112. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue that would be generated through increasing the tax on cigarettes by 10 cent, 20 cent and 50 cent per packet of 20, with a pro rata increase on other tobacco products. [14878/17]

Freagraí scríofa

Minister for Finance

I am informed by Revenue that estimates for the yield from changes in duties on tobacco are included in the Ready Reckoner (page 22) on the Revenue statistics webpage: http://www.revenue.ie/en/about/statistics/index.html. These estimates assume pro-rata increases in other tobacco products.

Tax Yield

Ceisteanna (113)

Pearse Doherty

Ceist:

113. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue raised by placing a tax on soft sugary drinks as set out in the 2017 tax strategy papers which would apply to water based and juice based drinks which have an added sugar content of 5 g per 100 ml and above and levied at rates per hectolitre (details supplied), as indicated in the 2017 tax strategy paper. [14879/17]

Freagraí scríofa

Minister for Finance

The 2016 Tax Strategy papers estimated potential yields from a tax on sugar sweetened drinks based on a total soft drink sales in Ireland of 685.4 million litres per annum.  The TSG papers estimated that the tax would apply to 60% of these sales.  My Department has been informed by the soft drinks industry that due to the continual reformulation of products by that industry the total taxable soft drink products in now closer to 50%.  Based on this information the estimated yields are set out as follows:

Estimated yields

Rate per hl	€2.46	€4.93	€7.39	€9.85	€12.32	€24.64	€36.96	€49.27
Increase 330ml can (VAT inc)	1c	2c	3c	4c	5c	10c	15c	20c
Yield	€8.4m	€16.9m	€25.3m	€33.7m	€42.2m	€84.4m	€126.6m	€168.7m

I have not yet finalised the structure, scope or rate of the tax, so estimates are preliminary and subject to change. 

It is important to note that the proposed introduction date of the tax on sugar sweetened drinks is April 2018 and the soft drinks industry continue to reformulate their products, reducing sugar content, in order to limit their exposure to the tax.  This indicates that the policy is already having a positive impact prior to its introduction, however, this means that the resulting tax yield will likely be less than estimated.

The UK, who are introducing a similar tax in April 2018, recently revised down their estimated yield from £520m to £380m on the basis of industry reformulation.

Tax Yield

Ceisteanna (114)

Pearse Doherty

Ceist:

114. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue that would be raised from the introduction of a new rate of 41%, 42%, 43%, 44%, 45%, 46% and 47% on a person's income in excess of €100,000. [14880/17]

Freagraí scríofa

Minister for Finance

It is assumed for the purposes of these estimates that the existing standard rate band structure and 20% and 40% income tax rates would remain for income up to €100,000, with the rates proposed by the Deputy to apply on income in excess of that amount.

I am advised by Revenue that major issues would need to be resolved as to how, in practice, such new Income Tax rates could be integrated into the current system and how this would affect the relative position of different types of income earners.

Notwithstanding these issues, Revenue estimates that the full year yield to the Exchequer of the introduction of the suggested new third rate of Income Tax of 41%, 42%, 43%, 44%, 45%, 46% and 47% on income in excess of €100,000 would be of the order of €86 million, €172 million, €258 million, €343 million, €429 million, €515 million, and €601 million respectively.

All figures above are estimates for 2017, using the actual data for the year 2014, the latest year for which data are available, adjusted for income, self-employment and employment trends in the interim. They are provisional and may be revised. A married couple or civil partners who have elected or have been deemed to have elected for joint assessment are counted as one tax unit. This means that, in the case of a jointly assessed two-earner couple, the yield estimates above assume the higher rate of income tax would apply once joint income exceeds €100,000.

Tax Yield

Ceisteanna (115)

Pearse Doherty

Ceist:

115. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue that would be raised by increasing capital acquisitions tax to 34%, 35% and 36%. [14881/17]

Freagraí scríofa

Minister for Finance

I am advised by Revenue that a Ready Reckoner is available on the Revenue Statistics webpage at http://www.revenue.ie/en/about/statistics/index.html.  This Ready Reckoner shows a wide range of detailed information, including changes to the CAT rates (pages 15-16). While the Ready Reckoner does not show all of the specific costings requested by the Deputy, others can be estimated from those shown on a pro-rata or straight line basis with those displayed in the Reckoner.

Water Charges

Ceisteanna (116)

Pearse Doherty

Ceist:

116. Deputy Pearse Doherty asked the Minister for Finance the cost in terms of fiscal space of maintaining the current suspension of water charges to 1 January 2018. [14882/17]

Freagraí scríofa

Minister for Finance

If the current suspension of water charges was maintained to 1 January 2018, there would be no revenue from the charges in 2017.  The Department for Housing, Planning, Community and Local Government recently informed my Department that €59m of charges were collected in 2016.  Therefore, the impact on fiscal space would be a decrease of €59m in 2017.

Tax Yield

Ceisteanna (117)

Pearse Doherty

Ceist:

117. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue that would be raised from the abolition of tax relief for private health insurance premiums and the capping of such relief at 5%, 10%, 12%, 15%, 18% and 19%. [14883/17]

Freagraí scríofa

Minister for Finance

I am advised by the Revenue Commissioners that based on provisional 2016 data, the yield to the Exchequer arising from the abolition of tax relief for private health insurance premiums is tentatively estimated to be in the order of €330 million.

The estimated yield to the Exchequer from reducing the current rate of tax relief from 20% to 5%, 10%, 12%, 15%, 18% and 19%, assuming retention of the current ceilings for the relief, would be in the order of €247 million, €165 million, €132 million, €82 million, €33 million and €16 million respectively.

Tax Yield

Ceisteanna (118, 119)

Pearse Doherty

Ceist:

118. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue which would be raised from increasing the rate of commercial stamp duty to 2.5%, 3%, 3.5% and 4%. [14884/17]

Pearse Doherty

Ceist:

119. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue that would be raised by increasing the stamp duty on share transactions from 1% to 1.1%, 1.2%, 1.3% and 1.4% respectively. [14885/17]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 118 and 119 together.

In relation to Question 14884/17, the estimated yield from increasing rate of commercial Stamp Duty from current 2% to 2.5%, 3%, 3.5% and 4% is estimated at approximately €54 million, €108 million, €162 million and €215 million respectively.

In relation to the second question concerning proposed increases to Stamp Duty rates on share transactions, I am advised by Revenue that a Ready Reckoner is available on the Revenue Statistics webpage located at www.revenue.ie/en/about/statistics/index.html.  The Ready Reckoner shows a wide range of detailed information, including changing the Stamp Duty rate applicable to shares on page 18.  While the Ready Reckoner does not show all of the specific costings requested by the Deputy, they can be estimated on a straight line basis from those displayed in the Ready Reckoner.

Tax Yield

Ceisteanna (120)

Pearse Doherty

Ceist:

120. Deputy Pearse Doherty asked the Minister for Finance the revenue that would be raised by the introduction of a new 1% wealth tax on net assets in excess of €1 million, excluding qualified provisions such as working farmland, the first 20% of a family home, capital sums in pension funds and business assets and applying to global assets for those domiciled or ordinarily resident here and to domestic assets for those resident here for tax purposes. [14886/17]

Freagraí scríofa

Minister for Finance

In order to estimate the potential revenue from a wealth tax, it is necessary to identify the wealth held by individuals. As there is currently no such wealth tax in operation in Ireland, the Department understands that the Revenue Commissioners have no basis or requirement to compile the data needed to produce estimates in relation to a potential wealth tax. Although an individual's assets and liabilities are declared to the Revenue in a number of specific circumstances (for example, after a death), this information is not a complete measure of assets and liabilities in the State, nor is it recorded in a manner that would allow analysis of the implications of an overarching wealth based tax.

However, in 2013 the Central Statistics Office conducted the first comprehensive survey of household wealth in Ireland (the Household Finance and Consumption Survey (HFCS)). The survey provides information on the ownership and values of different types of assets and liabilities along with more general information on income, employment and household composition.

During 2016, my Department, jointly with the Economic and Social Research Institute (ESRI), conducted a research project into the distribution of wealth in Ireland and the potential implications of a wealth tax using the HFCS. The research formed part of an on-going joint-research programme with the ESRI on the Macro-Economy and Taxation. The research paper, available on the ESRI website, presented results on the composition of wealth across both the wealth and income distributions in Ireland. A number of wealth tax scenarios were then applied to the Irish data (wealth tax regimes from other jurisdictions and hypothetical scenarios). In each case, the associated tax bases and revenue yields, the number of liable households across the income distribution, and the characteristics of the households affected are outlined.

The wealth tax scenario in the research paper that is closest to the wealth tax outlined by the Deputy in his question is the high threshold-large exemptions scenario as outlined in Table 5 of the Department of Finance/ESRI study. This scenario has a personal threshold of €1.0 million (doubled if married and a €500,000 increase per child), applies a 1% tax rate and excludes farms, the household main residence, business and pension assets. Given it is not identical to the scenario outlined in the Deputy's question, care should be taken in interpreting the revenue estimates. This scenario, given the distribution of household wealth in Ireland in 2013, is estimated to raise €53 million as outlined in Table 8 of the Department of Finance/ESRI study. The research notes that its tax revenue estimates are static; in other words, no behavioural response to the tax is modelled. The estimate of €53 million, therefore, is likely to be an upper estimate of the revenue that could be raised.

In order to estimate the yield from a tax with the precise parameters as outlined in the Deputy's question, it would be necessary to seek the agreement of the CSO to revisit its original survey data for this specified purpose. This would be a significant undertaking that would take considerable time and resources to complete. It is also noted that the HFCS does not include specific data on the global assets for those domiciled or ordinarily resident and the domestic assets for those resident for tax purposes. As such, any estimate on the yield obtained from HFCS data would not fully capture the parameters outlined in the Deputy's question.

Universal Social Charge Abolition

Ceisteanna (121)

Pearse Doherty

Ceist:

121. Deputy Pearse Doherty asked the Minister for Finance the estimated loss of revenue from abolishing the universal social charge in full in budget 2018. [14887/17]

Freagraí scríofa

Minister for Finance

The most recent economic and fiscal forecasts were prepared by my Department as part of Budget 2017.  On that basis, the Universal Social Charge (USC) is projected to raise approximately €3.7 billion this year in Exchequer receipts terms. These revenues are expected to increase over the forecast horizon as employment and wages are projected to continue to grow. 

For example, next year assuming a no policy change, which does not take account of the allocation of fiscal space beyond 2017, but does include the carryover effect of Budget 2017 changes, USC is expected to yield €4.0 billion in 2018.  

Finally, as the Deputy will appreciate these figures are expected to change as part of the upcoming Stability and Programme Update, in April this year, which will incorporate the most up to-date macroeconomic data.

Universal Social Charge Exemptions

Ceisteanna (122, 123)

Pearse Doherty

Ceist:

122. Deputy Pearse Doherty asked the Minister for Finance the estimated cost of exempting earners at or below €19,572 from the USC. [14888/17]

Pearse Doherty

Ceist:

123. Deputy Pearse Doherty asked the Minister for Finance the estimated cost of exempting all earners at or below €19,572 from the USC and, respectively, with no USC payable on the first €19,572 of income for all persons earning over €19,572. [14889/17]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 122 and 123 together.

I am advised by Revenue that the first and full year costs to the Exchequer of exempting all income earners who earn at or below €19,572 from the Universal Social Charge (USC) are estimated to be €53 million and €62 million respectively. For the purposes of this costing it has been assumed that the current USC bands and rates will apply to taxpayers whose USC-liable income exceeds €19,572.

Regarding the Deputy's second question, I am advised by Revenue that the first and full year costs to the Exchequer of exempting all income at or below €19,572 from the USC for all earners are estimated to be €403 million and €569 million respectively. These changes would effectively remove the current 0.5% USC rate on all income up to €12,012 and the 2.5% USC rate on all income from €12,012 to €18,772 and would increase the entry point into the 5% USC rate to €19,572.

It is broadly estimated that increasing the entry threshold to USC from €13,000 to €19,572, or introducing a zero percent rate of USC on income up to €19,572 for all earners, would increase to approximately 38%, the proportion of income earners with no liability to the USC.

These estimates have been generated by reference to 2017 incomes as calculated on the basis of actual data for the year 2014, the latest year for which returns are available, adjusted as necessary for income, self-employment and employment trends in the interim. The estimates are provisional and may be revised.

Exchequer Savings

Ceisteanna (124)

Pearse Doherty

Ceist:

124. Deputy Pearse Doherty asked the Minister for Finance the estimated savings that would accrue from moving the entire cost of regulation of the financial sector onto the industry, as opposed to the current 50%. [14892/17]

Freagraí scríofa

Minister for Finance

As I outlined in my response to the Deputy's question on 21 February 2017, my Department and the Central Bank published a joint public consultation paper in 2015 on a proposed move from the current 50 per cent funding model for financial regulation to a full funding model.

Following that consultation, I approved a phased move towards 100 per cent industry funding of the cost of financial regulation, commencing in 2017 with a move from 50 to 65 per cent of regulation costs being borne by industry, subject to certain parameters on the Central Bank's overall costs of regulation being implemented. The roll-out of the phased increase takes into account the unique characteristics of each sector in the industry.

That part of the overall cost of regulating the industry that is not recouped from industry is funded by Central Bank subvention. The subvention in 2016 was of the order of €72 million which would represent the savings that would accrue from moving the entire cost of regulation of the financial sector onto industry. 

Insurance Industry

Ceisteanna (125)

David Cullinane

Ceist:

125. Deputy David Cullinane asked the Minister for Finance when he expects payments to be made to persons as a result of the liquidation of a company (details supplied); and if he will make a statement on the matter. [14929/17]

Freagraí scríofa

Minister for Finance

I am unable at this time to provide the Deputy with an exact timeframe as to when payments will be made to persons as a result of the liquidation of Setanta.

Setanta was placed into liquidation by the Malta Financial Services Authority on 30 April 2014. Setanta is a Maltese incorporated company and therefore, the Setanta liquidation is being carried out under Maltese law.  The most recent figures received by the Department of Finance from the Liquidator for Setanta is that the number of open claims is 1,650.

Progress in the liquidation has been delayed due to court proceedings in the case of Law Society of Ireland v the Motor Insurers' Bureau of Ireland (MIBI).  The current position is that we are awaiting the outcome of MIBI's appeal to the High Court ruling, which was heard before the Supreme Court in October 2016.  No date has been specified for the judgment.

It should be noted that prior to the commencement of this court case, the Insurance Compensation Fund would have met the third party claims up to a limit of 65% and a ceiling of €825,000 per claimant. However, if the High Court ruling is upheld then MIBI will compensate third parties fully up to a limit of €1,220,000 per claim for property, regardless of the number of claimants, with no cap on payments for personal injury claims.  

A small number of additional claims are not affected by the court proceedings and are being processed by the Office of the Accountant of the Courts of Justice due to the fact that they are 1st party claims and come unambiguously within the remit of the Insurance Compensation Fund (ICF). In relation to these policyholders, the cap of 65% applies and in total payments of €608,085 have been made to date to such Setanta policyholders. 

3rd party motor insurance claims are unlikely to be processed until after the outcome of the Supreme Court appeal.

The Liquidator for Setanta has informed me that:

- Claims provision required stands at between €87.7 million and €95.2 million. 

- Setanta policies were cancelled in May 2014. The 2 years allowable under the statute of limitation to lodge claims has expired so the claims figures will not increase further.

- The Liquidator reports that it is proving difficult to settle claims in advance of the outcome of the MIBI appeal.

- The Liquidator continues to be of the view that he will not be in a position to meet more than 30% of claims.

I expect to be able to provide a more accurate update after the legal proceedings are concluded.

VAT Rate Application

Ceisteanna (126)

Michael Healy-Rae

Ceist:

126. Deputy Michael Healy-Rae asked the Minister for Finance if he will address an issue with regard to small pubs operating in rural areas and VAT percentages (details supplied); and if he will make a statement on the matter. [14952/17]

Freagraí scríofa

Minister for Finance

VAT is governed by the EU VAT Directive, with which Irish VAT law must comply. The Directive provides that all goods and services are liable to VAT at the standard rate, currently 23% in Ireland, unless there is a provision in the Directive that permits a lower rate to be applied.

While Ireland applies reduced and zero rates of VAT to a select range of goods and services under Article III of the VAT directive, and by historical derogation, there is no means under EU VAT law to apply a lower VAT rate to the supply of alcohol. Alcohol must be charged at the standard VAT rate.

Any changes to VAT rates outside of what is currently permitted though the EU VAT Directive must be negotiated at EU technical working groups and ultimately agreed at ECOFIN. As with all tax files, any such changes require unanimous agreement from all Member States.

Tax Reliefs Application

Ceisteanna (127)

Clare Daly

Ceist:

127. Deputy Clare Daly asked the Minister for Finance if consideration will be given to private sector archaeologists being permitted to claim the flat rate schedule E expenses tax credit in view of the fact that this expense may be claimed by Civil Service archaeologists. [14958/17]

Freagraí scríofa

Minister for Finance

The legislation governing the deductibility of expenses incurred in employment is contained in section 114 of the Taxes Consolidation Act 1997. The provision dictates that for an expense to qualify as a deduction against income from an office or employment, the expense must be wholly, exclusively and necessarily incurred in the performance of the duties of the office or employment.

For ease of administration, where a large number of employees incur an identical or very similar amount of qualifying expenses, which are not reimbursed by their employer, a standard flat rate expenses allowance (deduction) may be agreed between Revenue and representatives of that group or class of employees. The agreed deduction is then applied to all employees of the class or group in question, eliminating the need for individual claims to be submitted annually to Revenue.

In such cases the representative group will need to provide Revenue with details of the nature of the expenses in question, the necessity for such expenses and provide confirmation that employees are not reimbursed in any manner in respect of such expenses.

I understand that representatives of private sector archaeologists are in contact with Revenue with regard to a possible flat rate expense amount.

It should be noted that any employee who is obliged to defray expenses incurred wholly, necessarily and exclusively in the course of their employment may make a claim to Revenue to deduct such expenses from their taxable emoluments irrespective of the existence or otherwise of a Flat Rate Expenses agreement.

Job Creation Targets

Ceisteanna (128)

Tony McLoughlin

Ceist:

128. Deputy Tony McLoughlin asked the Minister for Finance the estimated number of jobs projected to be created here, and particularly in counties Sligo and Leitrim, for the next five year period; and if he will make a statement on the matter. [14982/17]

Freagraí scríofa

Minister for Finance

My Department's most recent macroeconomic forecasts were published with Budget 2017 in October last year. The following table sets out the total employment projections from these forecasts. My Department does not produce regional macroeconomic forecasts.

Overall, it is forecast that approximately 190,000 net additional jobs will be created over the five year period from 2016 to 2021. For this year, employment growth of 2.1 per cent (approximately 45,000) is projected. For next year, employment gains of 2.1 per cent (approximately 40,000 jobs) are also anticipated.  Over the remaining three years of the forecast horizon to 2021, employment growth of 1.6 per cent on average per annum is projected (equivalent to an average of approximately 35,000 jobs per year).

Employment Projections	2016	2017	2018	2019	2020	2021
Total Employment  ('000)^	2020	2060	2100	2140	2175	2205

^ nearest 5,000.
Source: 2016 CSO, 2017-2021 Budget 2017

These forecasts will be updated in the context of the 2017 Stability Programme Update which will be published in April.