Noel Rock
Ceist:162. Deputy Noel Rock asked the Minister for Finance the status of plans to tackle the issue of high rates of car insurance; and if he will make a statement on the matter. [42226/18]
Amharc ar fhreagraMotor Insurance Costs
Ceisteanna (162)
Freagraí scríofa
As the Deputy is aware, the Cost of Insurance Working Group undertook an examination of the factors contributing to the cost of motor insurance to identify what short, medium and long-term measures could be introduced to help reduce the cost of insurance for motorists and businesses.
The initial focus of the Working Group was the issue of rising motor insurance premiums and the Report on the Cost of Motor Insurance was published in January 2017, containing 33 recommendations with 71 associated actions. The Report contains an Action Plan, setting out the agreed timelines for implementation, and also a commitment that the Working Group will prepare quarterly updates on its progress. The Working Group has published six such updates to date, most recently on 30 August. It shows that, in total, of the 56 separate applicable deadlines within the Action Plan set to the end of Q2 2018, 44 relate to actions which have now been completed. Substantial work has also been undertaken in respect of the nine action points categorised as “ongoing”. Officials in the Department of Finance are now working to collate the progress updates for the Seventh Progress Update Report and it is expected that this work will be finalised in the coming weeks.
It is envisaged that the implementation of all the recommendations cumulatively, with the appropriate levels of commitment and cooperation from all relevant stakeholders, should achieve the objectives of delivering fairer premiums for consumers and a more stable and competitive insurance market.
In this regard, it should be noted that the most recent CSO data (for September 2018) indicates that private motor insurance premiums have decreased by almost 22% since peaking in July 2016. I appreciate that these figures represent a broad average however we have to recognise that these are the same figures that showed the large increase that many commentators regularly reference. Therefore, I think it has to be recognised that the overall trend currently is downward, which is to be welcomed.
Tax Rebates
Ceisteanna (163)
Bernard Durkan
Ceist:163. Deputy Bernard J. Durkan asked the Minister for Finance if and when a refund of income tax will be made in the case of a person (details supplied); and if he will make a statement on the matter. [42242/18]
Amharc ar fhreagraFreagraí scríofa
As I noted in my response to Question No. 89 of 3 July 2018, Revenue wrote to the person in question requesting a number of clarifications.
Revenue has confirmed to me that it has not yet received any reply from the person, including in respect of a reminder letter that recently issued to them. Revenue has assured me that it will carry out a full review of the person’s tax situation as soon as they provide the requested information and will process any refund that may be due to them.
Tax Code
Ceisteanna (164)
Seán Haughey
Ceist:164. Deputy Seán Haughey asked the Minister for Finance if he will equalise the life assurance exit tax and the DIRT tax in the interest of long-term savers; and if he will make a statement on the matter. [42261/18]
Amharc ar fhreagraFreagraí scríofa
Policy choices with respect to changes in taxation were made in the context of the financial resources available to me. Thus the option available for amending the rate of life assurance tax in the context of Budget 2019 had to be considered in the context of competing demands for other taxation changes.
I have focused much of the resources available to me for a taxation package in Budget 2019 on changes to income tax and USC which I consider is of benefit to a wider subset of the population. In light of this, I decided not to amend the rate of life assurance tax on this occasion.
Question No. 165 answered with Question No. 159.
Budget 2019
Ceisteanna (166)
Brendan Howlin
Ceist:166. Deputy Brendan Howlin asked the Minister for Finance the additional carry-over cost in 2020 of the tax measures introduced in budget 2019; the cost by tax measure, in tabular form; and if he will make a statement on the matter. [42271/18]
Amharc ar fhreagraFreagraí scríofa
I can advise the Deputy that the carryover to 2020 of tax measures introduced in Budget 2019 is estimated to be in the region of €51 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 several 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.
|
Tax-Head |
Carryover effect €m |
|
Income Tax/USC |
-67 |
|
VAT |
92 |
|
Excise Duties |
28 |
|
Capital Acquisitions Tax |
-1 |
|
Corporation Tax |
-1 |
|
Total |
51 |
*The carryover is calculated as the difference between the effect on a full year and that on 2019.
Tax Data
Ceisteanna (167)
Brendan Howlin
Ceist:167. Deputy Brendan Howlin asked the Minister for Finance the amount of revenue paid in each of the past five years as a result of the CGT exit tax rate of 33%; the number of companies it applied to as previously provided for in sections 627 and 628 of the Taxes Consolidation Act 1997; the estimated revenue which would be raised if the new regime was applied at 33% rather than 12.5%; and if he will make a statement on the matter. [42272/18]
Amharc ar fhreagraFreagraí scríofa
As part of Ireland’s commitment to implementing the Anti-Tax Avoidance Directive (ATAD), in Budget 2019 I announced the introduction of a new ATAD-compliant exit tax regime, with effect from Budget night. The ATAD exit tax regime will tax unrealised capital gains at a rate of 12.5% where companies migrate or transfer assets offshore such that they leave the scope of Irish tax. The tax operates by deeming a disposal of the asset to take place at the time of exit and applying the exit tax charge on any unrealised gain.
This new exit tax replaces a previous, more narrowly-focused exit tax charge which was introduced in 1997 as a proportionate anti-avoidance measure to counter a number of identified tax avoidance transactions that were used to take chargeable assets outside the charge to Irish tax prior to disposal. The provisions were designed to influence behaviour, i.e. to prevent the avoidance behaviour identified, rather than to serve as a tax raising measure and I understand from Revenue that they have been effective in this regard.
The new ATAD-compliant exit tax is a broad-based measure and it is expected that in time it will give rise to Exchequer revenue. However, as this will only arise in cases where an asset, which has increased in value while held by a company in the State, is transferred out of the charge to Irish tax without an actual disposal, an estimation of the future yield would require predicting changing asset values, in addition to projections as to future restructuring of companies. As any such estimate at this point would be highly theoretical, no specific provision was made in the Budgetary arithmetic for future exit tax yield, and equally it would not be possible to estimate the change in revenue if an alternate tax rate were to be applied.
Payments in respect of the new ATAD-compliant exit charge will be separately identified in the relevant tax returns so it will be possible to monitor receipts from the new charge in future.
Mortgage Interest Relief Data
Ceisteanna (168)
Eoin Ó Broin
Ceist:168. Deputy Eoin Ó Broin asked the Minister for Finance the reason for the difference between the projected full year cost of the 100% mortgage interest relief for landlords of minus €18 million as detailed in page 4 of the budget 2019 tax policy changes report and the figure of minus €44 million detailed by him in the reply to Parliamentary Question No. 81 of 21 June 2018. [42302/18]
Amharc ar fhreagraFreagraí scríofa
I am advised by Revenue that the figure of €44 million provided in reply to Parliamentary Question No. 81 of 21 June 2018 related to an increase from 80% to 100% deductibility in respect of interest on loans used in the purchase, improvement or repair of rented residential property. The figure of €18 million detailed in the documentation for Budget 2019 relates to an increase from 90% to 100% deductibility in respect of such loans.
The rate of allowable deductibility was increased to 85% on 1 January 2018 and was due to increase to 90% on 1 January 2019, therefore the cost of the acceleration of the full relief from 90% to 100% is the cost referred to in the Budget 2019 publications.
Furthermore, the estimate of €44 million was based on tax returns for 2015 which were the latest returns available at the time. The estimate of €18 million is based on tax returns for 2016. There has been a year-on-year decrease in total declared interest expenses of approximately 20% from 2015 to 2016.
Fiscal Data
Ceisteanna (169, 170, 171, 172)
Michael McGrath
Ceist:169. Deputy Michael McGrath asked the Minister for Finance the available fiscal stance after annual contributions to the rainy day fund each year to 2023 gross, that is, before pre-committed expenditure and demographics and so on and net, that is, after pre-committed expenditure and demographics and so on, based solely on the expenditure benchmark ignoring the MTO; the projected general Government balance and the structural Government balance in each of the years based on the projections announced on budget day, in tabular form; and if he will make a statement on the matter. [42303/18]
Amharc ar fhreagraMichael McGrath
Ceist:170. Deputy Michael McGrath asked the Minister for Finance the available fiscal stance after annual contributions to the rainy day fund each year to 2023, gross, that is, before pre-committed expenditure and demographics and so on, if Ireland were to run a structural balance of -0.5%, that is, adhere solely with the MTO; the projected general Government balance and the structural Government balance in each of the years based on the projections announced on budget day, in tabular form; and if he will make a statement on the matter. [42304/18]
Amharc ar fhreagraMichael McGrath
Ceist:171. Deputy Michael McGrath asked the Minister for Finance the available fiscal stance after annual contributions to the rainy day fund each year to 2023, gross, that is, before pre-committed expenditure and demographics and so on, if Ireland were to run a structural balance of 0%, that is, adhere solely with the MTO; the projected general Government balance and the structural Government balance in each of the years based on the projections announced on budget day, in tabular form; and if he will make a statement on the matter. [42305/18]
Amharc ar fhreagraMichael McGrath
Ceist:172. Deputy Michael McGrath asked the Minister for Finance the available fiscal stance after annual contributions to the rainy day fund each year to 2023, gross, that is, before pre-committed expenditure and demographics and so on, if Ireland were to run a structural balance of 0.5%, that is, adhere solely with the MTO; the projected general Government balance and the structural Government balance in each of the years based on the projections announced on budget day, in tabular form; and if he will make a statement on the matter. [42306/18]
Amharc ar fhreagraFreagraí scríofa
I propose to take Questions Nos. 169 to 172, inclusive, together.
At present, the fiscal rules - both the structural balance rule and, especially, the expenditure benchmark rule - are not well-suited to guide budgetary policy, given our position in the economic cycle. I highlighted this in the Summer Economic Statement and I note that the Irish Fiscal Advisory Council, in its pre-Budget statement, also highlighted this issue.
Essentially, the problem boils down to the fact that full allocation of 'fiscal space' would lead to a repeat of pro-cyclical budgetary policies that would threaten the living standards of Irish people. Pro-cyclical budgetary policies should be avoided; this is especially true when we are facing serious issues such as the exit of the UK from the European Union (and a non-negligible possibility of a 'disorderly' exit).
With this in mind, the more important framework for guiding fiscal policy is 'fiscal stance' - what is right for the economy at a particular point in time, so as to support sustainable, incremental improvements in public services and living standards.
The correct 'fiscal stance' can only be ascertained once account is taken of the position in the economic cycle. If the economy is operating at full capacity, then it would be incorrect to adopt an expansionary budgetary policy. On the other hand, if there is spare capacity in the economy, then it may be appropriate to use tax and expenditure policy to help absorb the spare capacity.
Given the many issues facing the economy and the heightened level of uncertainty (such as what form the UK's exit from the EU will take), it is only possible to assess the appropriate fiscal stance on a year-to-year basis at present.
Tax Code
Ceisteanna (173)
Eamon Ryan
Ceist:173. Deputy Eamon Ryan asked the Minister for Finance if the budget €50,000 limit on benefit-in-kind exemption for electric vehicles will apply retrospectively to vehicles purchased prior to budget day. [42369/18]
Amharc ar fhreagraFreagraí scríofa
Benefit in kind is chargeable where, by reason of employment, a car or van is made available (without a transfer of ownership) to an employee and the car or van is, during the tax year, available either for that individual’s private use or to his or her family or household.
In Finance Act 2017, I provided an exemption from benefit in kind in relation to electric cars and vans provided to an employee in the tax year 2018. In Budget 2019, I announced that the exemption from benefit in kind would be extended until 31 December 2021, and that a cap of €50,000 on the value of an electric car or van that can be fully relieved from benefit in kind will be imposed. Therefore, where the original market value of the electric car or van exceeds €50,000, the benefit in kind charge will be calculated in the usual manner but by reference to the amount in excess of €50,000.
As benefit in kind is calculated for each tax year during which the vehicle is made available, this cap will apply to all electric cars and vans made available to employees in the tax years 2019 to 2021, where the original market value of the vehicle exceeded €50,000.
Departmental Legal Cases
Ceisteanna (174)
Clare Daly
Ceist:174. Deputy Clare Daly asked the Minister for Finance if the State paid a financial settlement to a person (details supplied) as a result of legal action the person took in 2009 against a number of Irish persons with regard to their activities in the Seychelles. [42466/18]
Amharc ar fhreagraFreagraí scríofa
In the time available my Department has not been able to ascertain whether or not any financial settlement was paid by the State in respect of the case raised. I will arrange for further investigation and will revert in writing, as soon as possible, to the Deputy with the result of those investigations.
Revenue Commissioners Staff
Ceisteanna (175, 176)
Jonathan O'Brien
Ceist:175. Deputy Jonathan O'Brien asked the Minister for Finance the number of employees working in the large cases division in the Revenue Commissioners. [42482/18]
Amharc ar fhreagraJonathan O'Brien
Ceist:176. Deputy Jonathan O'Brien asked the Minister for Finance the number of employees tasked with auditing tax compliance of high wealth individuals in the large cases division. [42483/18]
Amharc ar fhreagraFreagraí scríofa
I propose to take Questions Nos. 175 and 176 together.
I am advised by Revenue that as part of a structural realignment process that is ongoing at present, they have established two national Large Case Divisions, one for large corporates and one for high wealth individuals. This realignment has a particular focus on ensuring that appropriate resources are applied to tax and duty risk in line with Revenue’s Statement of Strategy 2017 – 2019.
The staffing of the original Large Cases Division which was focused on large corporates and high wealth individuals had a total of 253 wholetime equivalent (wte) staff. Following realignment the two Divisions will have over 320 wte staff by the end of 2018.
The staffing of the element of the original Large Cases Division which was focused on high wealth individuals had a total of 64 wte staff. Following realignment the Division will have c. 100 wte staff by the end of 2018.
I am advised by Revenue that it has also established a new Medium Enterprises Division to deal with the tier of cases, both corporate and high wealth individuals, just below Large Cases. This Division will have c. 380 wte staff by the end of 2018.
The Large Cases High Wealth Individuals Division, in addition to the work on high wealth individuals is responsible for pensions and tax avoidance work. I am advised by Revenue that it is anticipated that the approximately 25 staff currently tasked with profiling high wealth individuals and related entities and carrying out a programme of risk-based compliance interventions which include audits will increase to approximately 55 by the end of 2018.
Public Sector Pensions
Ceisteanna (177)
Robert Troy
Ceist:177. Deputy Robert Troy asked the Minister for Public Expenditure and Reform if the increase scheduled in public service pensions from October 2018 will be issued without delay; and if he will make a statement on the matter. [41740/18]
Amharc ar fhreagraFreagraí scríofa
I wish to advise the Deputy that in January this year my Department issued DPER Circular 02/2018 authorising pension increases to qualifying public service pensions of certain public service pay increases, and giving guidance on the implementation of those pension increases. The pay increases involved are those covering the 2018 to 2020 period under the Public Service Stability Agreement (PSSA), as legislated for in the Public Service Pay and Pensions Act 2017. The pay increase of 1% of salary on 1 October 2018 is the second such increase, the first, also 1%, having come into effect on 1 January 2018.
The principle of pay parity underlies the pension increases sanctioned in the Circular. This means that pay increases agreed as part of the PSSA are to be passed on to pension recipients to bring the salary on which their pension is based up to the current salary of those still serving after the pay increases are applied. It is important to note that not all pension recipients will be due these increases. This is because of protections in place (known as ‘grace periods’) for public servants retiring after the application of pay cuts under the FEMPI legislation, whereby their pensions were calculated using the higher pay rates that were in effect prior to the application of the pay cuts.
It is a matter for the large number of public service pension payroll managers in the various sectors of the public service to implement Circular 02/2018. I understand that work is under way to apply the pay increases I have mentioned to those qualifying pensions in payment that have not yet benefitted from such increases, and that this will include the calculation and payment of arrears as appropriate.
Garda Station Closures
Ceisteanna (178)
Darragh O'Brien
Ceist:178. Deputy Darragh O'Brien asked the Minister for Public Expenditure and Reform the status of the reopening date of a Garda station (details supplied) which was announced in 2016; the date it is due to be opened; and if he will make a statement on the matter. [41904/18]
Amharc ar fhreagraFreagraí scríofa
The Programme for Government included for the re-opening of a number of closed Garda Stations (6) throughout the country, including Rush Garda Station, Co. Dublin. The Office of Public Works has undertaken an assessment of all the Stations identified in this 'pilot programme of Station re-openings', and based on the Garda Síochána 'brief of requirements' received, has advised them on the works required and indicative costs involved.
On 15 August 2018, OPW issued a "Notice to Quit" to the then Licensee of the building, and received vacant possession of this building by the end of September 2018.
The OPW is currently engaged in the deliberative process with An Garda Síochána in finalising the required works to meet their brief of requirements. At the last site meeting held on 10th October 2018, several matters were agreed and some reviews and clarifications were sought prior to a final sign-off.
Once full agreement and sign-off is achieved, OPW will proceed with the procurement of works to be undertaken, and which is expected to be completed over the coming months.
Garda Station Closures
Ceisteanna (179)
Brendan Smith
Ceist:179. Deputy Brendan Smith asked the Minister for Public Expenditure and Reform the progress to date in reopening Bawnboy Garda station, County Cavan; and if he will make a statement on the matter. [42540/18]
Amharc ar fhreagraFreagraí scríofa
The Programme for Government included for the re-opening of a number of closed Garda Stations (6) throughout the country, including Bawnboy Garda Station. The Office of Public Works has undertaken an assessment of all the Stations identified in this 'pilot programme of Station re-openings', and based on the Garda Síochána 'brief of requirements' received, has advised them on the works required and indicative costs involved.
The deliberative process between An Garda Síochána and the OPW to finalise the Bawnboy Station proposals is on-going. Once this is concluded and Garda sign-off achieved, the OPW will progress with the necessary Planning Application (Part 9) and the procurement of works required to re-open the station.