Written Answers Nos. 151-168
151. Deputy Bernard J. Durkan asked the Tánaiste and Minister for Foreign Affairs and Trade the extent to which international efforts to address issues in the Horn of Africa continue; and if he will make a statement on the matter. [4411/19]
Amharc ar fhreagraThe Horn of Africa is currently experiencing a period of tremendous political change and transition.
Since his appointment in April last year, the Ethiopian Prime Minister Abiy Ahmed has pursued an ambitious programme of political, economic and social reform, on which he briefed the Taoiseach when they met in Addis Ababa in January. However, the Ethiopian reform process is complicated by a backdrop of ethnic conflict and high levels of internal displacement. More positively, Prime Minister Abiy led the process leading to an historic rapprochement between Ethiopia and Eritrea in July 2018, after decades of conflict.
In South Sudan, President Salva Kiir signed a new peace agreement with a number of opposition groups in September 2018.
Widespread protests erupted in Sudan in December, initially against the worsening economic situation but which have since developed into calls for President Omar al-Bashir’s resignation.
Al Shabaab have claimed responsibility for a recent terrorist attack in Nairobi in which 21 people were killed.
There have been a number of worrying developments in Somalia, including attacks on the UN Compound in Mogadishu and expulsion of the UN Special Representative of the Secretary General for Somalia in January.
The region is also affected by the challenges of irregular migration, forced displacement, trafficking in human beings, and smuggling of people. Taken together, the political trajectory of the region when combined with climatic shocks, severe drought, and conflict, has escalated the scale of the humanitarian crisis in the region, with more than 24 million people in need of humanitarian assistance.
Ireland, together with its UN and EU partners, is strongly committed to and actively engaged in the Horn of Africa, through our political, development and humanitarian efforts. The EU engages in the region through political dialogue, its Common Security and Defence Policy, CSDP, missions (EU NAVFOR Operation Atalanta, EUCAP Somalia, and EUTM Somalia), and development and humanitarian cooperation. The former Director of the Irish Coast Guard will deploy to Mogadishu to take up the position of Deputy Head of Mission at EUCAP Somalia at the end of this month. Ireland, through the EU, also supports the efforts of the UN peacekeeping mission AMISOM to stabilise Somalia. Through regional and bilateral programmes and the Trust Fund for Africa, the EU is providing over €3 billion to the Horn of Africa (2014-20). Ireland has pledged €15 million to the Trust Fund for Africa.
Ireland supports regional efforts in the Horn of Africa to achieve stability, normalise relations and increase regional cooperation, including through regional organisations such as the African Union and the Intergovernmental Authority on Development, IGAD. During his visit to Ethiopia in January 2019, the Taoiseach met with the acting Chairperson of the African Union to discuss regional issues. During his visit to Ethiopia and Kenya in November 2017, the Tánaiste met representatives of IGAD and the African Union, and Ireland has since provided funding to IGAD to support negotiation, monitoring and evaluation of the South Sudan peace agreement and is planning to further increase engagement with the African Union in 2019. In addition, two Departmental officials are seconded to the EU mission in South Sudan.
The EU has a Special Representative to the Horn of Africa, Mr. Alex Rondos, whose mandate is to contribute to regional and international efforts to achieve lasting peace, security and development in the region. The Tánaiste discussed EU efforts in the region with EUSR Rondos when he visited Dublin in November 2018.
In response to the multiple humanitarian crises in the region, Ireland has provided €164 million in direct humanitarian assistance to the Horn of Africa since 2012. Over €30 million in Irish funding was provided in 2018, including to UN agencies and Irish NGOs to assist them in reaching the most vulnerable. With humanitarian needs likely to remain acute throughout 2019, Ireland remains committed to providing humanitarian assistance where it is needed most in the Horn of Africa, working with partners who can ensure that such assistance is delivered in a co-ordinated and effective manner.
152. Deputy Bernard J. Durkan asked the Tánaiste and Minister for Foreign Affairs and Trade the extent to which the international community continues to intervene to prevent the recruitment of child soldiers at various global locations; and if he will make a statement on the matter. [4412/19]
Amharc ar fhreagraThe recruitment and use of child soldiers during conflict remains a serious problem globally. Tens of thousands of children are recruited and used as soldiers in conflicts around the world. Since 2002, the Secretary-General of the United Nations has issued an annual report on children and armed conflict which lists all armed groups – both state and non-state – that recruit and use children. The most recent report, published in May 2018, indicated that children continue to be disproportionately affected by armed conflict in many country situations. The report also noted that, in 2017, there was a large increase in the number of violations compared with the number reported for 2016.
The recruitment and use of children as soldiers is explicitly prohibited under international humanitarian law and human rights law. In 1999, the UN Security Council passed its first Resolution, UNSCR 1261, on the impact of armed conflict on children and condemned violations in that context. In the same year, the African Charter on the Rights and Welfare of the Child entered into force. Article 22 of the Charter sets out a prohibition on the recruitment and direct participation in hostilities of any person under the age of 18 years.
Ever since, the Security Council has established important tools to strengthen child protection and to strengthen implementation of international standards, including the position of UN Special Representative for Children and Armed Conflict, who investigates and develops best practices to address the recruitment and use of child soldiers.
Ireland remains committed to the eradication of the recruitment and use of child soldiers. In addition to the focus in our development programmes on addressing the socio-economic causes which can lead to conflict, and the recruitment of child soldiers, Ireland also supports more targeted interventions by working with organizations such as UNICEF, the Office of the High Commissioner for Human Rights and institutions such as the International Criminal Court.
153. Deputy Bernard J. Durkan asked the Tánaiste and Minister for Foreign Affairs and Trade the extent to which he and the international community can continue to exert pressure to bring about an amicable peace process in the Israeli-Palestinian conflict; and if he will make a statement on the matter. [4413/19]
Amharc ar fhreagraI have given a high priority to the Israeli-Palestinian conflict since I took up office and have worked consistently to maintain an international focus on the issue and support for the two-state solution.
I have visited Israel and Palestine three times over the last 18 months, holding meetings with the key interlocutors in both places, including both President Abbas and Prime Minister Netanyahu. I was also delighted to welcome President Abbas to Ireland in September, his first visit in ten years, during which he also had good meetings with the President and the Taoiseach. These visits and meetings have allowed me to raise Ireland's priorities with pivotal decision makers and have helped to inform my thinking on how best to support efforts to advance the broader peace process.
At present, prospects for the resumption of negotiations centre on the peace plan being developed by the United States. I have engaged with the US Middle East team to encourage this initiative and to highlight some of the key issues which it will have to address if it is to be successful. I have encouraged my EU colleagues to take a similar approach.
Regrettably, however, the US administration has made a series of unilateral actions over the past year that have made bringing all interlocutors together for negotiations more difficult. Efforts toward peace are more likely to succeed, when attention is paid to creating the right political context for fruitful cooperation. I have conveyed this view to both US and Israeli interlocutors.
I have spent much time considering how the EU and the wider international community can productively engage and better use the resources at our disposal to influence the parties to the conflict. In December, Ireland proposed a Resolution at the UN General Assembly on a comprehensive, just and lasting peace in the Middle East. This resolution, which reaffirmed the long-standing and broadly agreed parameters for a two-state solution to the Israeli-Palestinian conflict, was adopted by an overwhelming majority of 156 UN states, including common EU support.
I am also convening a small gathering of Foreign Ministers in Dublin in February, to discuss the Middle East Peace Process. Ireland will work with the Palestinians, as well as supportive Arab and European participants, on discussing how best to encourage a move toward a just and durable peace.
154. Deputy Bernard J. Durkan asked the Tánaiste and Minister for Foreign Affairs and Trade the extent to which embassies abroad continue to be actively involved in the promotion of increased volumes of trade with Ireland with particular reference to the aftermath of Brexit; and if he will make a statement on the matter. [4414/19]
Amharc ar fhreagraThe Embassy network plays a central role in advancing Ireland’s international trade as part of Team Ireland overseas. Embassies and Consulates around the world provide vital support for Ireland’s State enterprise agencies, including by supporting their strategic objectives and activities in overseas markets. The role of the Embassy in supporting Ireland’s trade objectives is particularly pertinent in markets with limited or no State agency presence.
Officers of the Department of Foreign Affairs and Trade across the Embassy network continuously engage in economic and public diplomacy to advance Ireland’s prosperity and raise awareness of Ireland as a great place to live, study, work, visit and do business.
The Department’s officers overseas engage with host country Governments and multilateral institutions on a range of trade-related issues, including market access, regulatory compliance, visas, phyto-sanitary issues, and Double Taxation Agreements.
The Embassy network also supports Irish businesses in market, by providing contacts and information, organising Ministerial visits overseas and supporting trade missions, in partnership with the State agencies.
In June 2018, the Government launched the Global Ireland initiative, which aims to double the impact and scope of Ireland’s global footprint by 2025. Global Ireland's targets include enhanced global engagement, the expansion of Ireland’s Embassy network and strengthening of Ireland’s State agency presence overseas. Each of these measures will increase Ireland’s international visibility, facilitate market diversification and intensification, and deepen bilateral relations in support of the Government’s economic and political objectives, including in the context of Brexit.
To date, the Government has approved funding for 13 new Embassies and Consulates, which are either already open or set to open during 2019 or 2020. As part of Global Ireland, in 2018 a new Embassy was opened in Wellington and a new Consulate General was opened in Vancouver. New Embassies will open in Bogotá, Santiago de Chile and Amman in 2019, and new Consulates General will open in Mumbai, Cardiff, Frankfurt and L.A. In 2020, new Embassies will open in Kyiv, Manila and Rabat. The Irish Aid office in Monrovia is also being upgraded to an Embassy.
These locations have been chosen based on a range of factors, including their potential to diversify our markets, to grow trade and investment with Ireland, and to enable Irish companies to better take advantage of new opportunities.
155. Deputy Declan Breathnach asked the Minister for Finance if his attention has been drawn to the fact that the new online procedure for dealing with farmers who are not registered for VAT to reclaim VAT paid by them under the VAT58 system is putting undue stress on them; if his attention has been further drawn to the fact that many farmers do not have access to computer systems and-or do not have broadband to conduct their business online; if he will consider continuing to accept VAT58 claims by post; and if he will make a statement on the matter. [3709/19]
Amharc ar fhreagraI am advised by the Revenue Commissioners that many taxpayers prefer to do their business online and at a time of their convenience. To meet that need, Revenue has in place modern, high-quality, accessible and user-friendly online services for taxpayers to manage their tax affairs at a time that best suits them. The Revenue Commissioners continues to enhance those services and, in line with their strategy to establish the use of electronic channels as the normal way of conducting tax business, a new VAT repayments facility was launched for unregistered farmers on 1 January 2019.
This new facility, which is available through both the Revenue Online Service, ROS, and My Account, is simple to use and will facilitate faster and more efficient processing of repayment claims. This new facility may also be accessed through any smartphone.
Revenue fully appreciates that not every taxpayer will be able to avail of digital services. In such circumstances, I am assured by the Revenue Commissioners that as regards the VAT repayments facility for farmers not registered for VAT, repayment claims submitted by post will continue to be accepted for the minority of farmers who have been granted an exclusion by Revenue from electronic filing. If individuals consider that they qualify for an exclusion, they should set out the reasons in writing to the Revenue Commissioners and the matter will be fully considered.
156. Deputy Pearse Doherty asked the Minister for Finance if the Revenue Commissioners will examine the file of a person (details supplied) who is of the view that he or she is paying the higher rate of tax. [3716/19]
Amharc ar fhreagraI am advised by Revenue that it has already reviewed the person’s tax situation across various income sources and is satisfied that the applied credits and rate band are correct. The person was issued with an updated tax credit certificate, TCC, on 15 January 2019, which set out the tax credits that are available to her for this year.
Revenue has confirmed that it will make direct contact with the person to explain the tax credit and rate band entitlements and answer any other queries that she might have.
157. Deputy Marc MacSharry asked the Minister for Finance if a company (details supplied) has received to date €156 million in three tranches via the National Treasury Management Agency; if so, the reason the company received these payments; and if he will make a statement on the matter. [3744/19]
Amharc ar fhreagraFor the purposes of clarity, I believe the €156 million referred to in the Deputy’s question relates to agreements to which both the National Treasury Management Agency (the “NTMA”) and the Strategic Banking Corporation of Ireland (the “SBCI”) are separately party. Details on these agreements are set out, as follows; however, I am advised by the NTMA that the value of these agreements is €171 million.
The NTMA, as controller and manager of the Ireland Strategic Investment Fund, ISIF, has made direct strategic equity investments in Finance Ireland Limited. These investments amount to €45 million in total. Finance Ireland Limited received a €30 million equity investment from the ISIF in 2016, and a further €15 million in 2018, in order to support the expansion of the company’s SME and agri-lending franchise.
The SBCI has entered into on-lender facility agreements with FICS Holdings (One) DAC, a subsidiary of Finance Ireland Limited. FICS Holdings (One) DAC initially received a €51 million facility from the SBCI in April 2016, to support the continued expansion of its hire purchase, leasing, working capital and agri asset finance offerings to SMEs and bring increased choice to Irish businesses. In December 2018, the SBCI announced an additional €75 million facility agreement with Finance Ireland.
158. Deputy Marc MacSharry asked the Minister for Finance if his attention has been drawn to the off balance sheet lending to a company (details supplied) of €420 million as per December 2017 accounts from a company; the exposure taxpayers here have to the funds in view of the fact that the bad debt provision of the company is less than 1%; his views on whether a slight downturn renders the company an unprofitable company; and if he will make a statement on the matter. [3745/19]
Amharc ar fhreagraI refer the Deputy to my response to PQ 3744/19, which sets out the agreements with Finance Ireland Limited and its subsidiary FICS Holdings (One) DAC.
I am advised that neither the National Treasury Management Agency, as controller and manager of the ISIF, nor the Strategic Banking Corporation of Ireland has any agreements with "Close Bros".
159. Deputy Marc MacSharry asked the Minister for Finance if his attention has been drawn to the fact that according to the accounts of a company (details supplied) the return for taxpayers here on the high risk investment in 2019 will be less than €1 million which is less than 1% of the €156 million that went to the company; his views on whether this is value for money; and if he will make a statement on the matter. [3746/19]
Amharc ar fhreagraI refer the Deputy to the response to PQ 3744/19, which sets out the agreements with Finance Ireland Limited and its subsidiary FICS Holdings (One) DAC. These agreements are commercially negotiated and it would not be appropriate to disclose this commercially sensitive information.
However, I would draw the Deputy's attention to the facts, as set out in PQ 3744/19, that the Ireland Strategic Investment Fund funds are direct equity investments, whereas, the funds from the Strategic Banking Corporation of Ireland are lending facilities. These funds have different statutory objectives, as set out in the statutes establishing both bodies, which means a single level of return should not be expected.
160. Deputy Michael Healy-Rae asked the Minister for Finance if alternative avenues will be examined to help reduce the cost of insurance here (details supplied); and if he will make a statement on the matter. [3800/19]
Amharc ar fhreagraWith regard to the examination of alternative motor insurance systems, such as that in use in New Zealand as referenced in the details supplied, I would refer the Deputy to the Cost of Insurance Working Group’s 2017 Report on the Cost of Motor Insurance, and in particular Chapter 7.5 and Appendix 7 of that report, which deal with international comparisons.
The report notes the use in some countries - including New Zealand and parts of Australia and Canada – of what is known as a "no-fault" system, where the State pays compensation or the cost of rehabilitation and the public pays for this system through taxes. The report states that some of these models are quite complex and should to be considered in a wider context. As well as impacting upon insurance premiums, they may impact on taxation and social security and must be considered in terms of existing constitutional, national and European requirements, e.g. the requirements of EU Motor Insurance Directives in terms of an individual’s right to monetary compensation.
The Motor Report recommended that a Personal Injuries Commission, PIC, be established with a view to proposing further measures that can help reduce the cost of claims. Among other issues, the PIC was charged with analysing and reporting on alternative compensation and resolution models internationally, focusing on common law systems while taking account of social welfare, health care and related factors associated with each jurisdiction.
The second report of the PIC, under the chairmanship of former President of the High Court Justice Nicholas Kearns, was published in September 2018, and Chapter 3 includes the results of its examination of the various compensation and resolution models used in around a dozen different countries, including, in section 3.5, New Zealand. The report is available at: https://dbei.gov.ie/en/Publications/Publication-files/Second-and-Final-Report-of-the-Personal-Injuries-Commission.pdf.
The PIC concluded that it would be difficult to envisage a no-fault system such as exists in New Zealand being applied in Ireland in view of our current legal and constitutional framework. The PIC considers that there may be a European-level legislative dimension to this matter, with such models only operating in jurisdictions outside the continent. The PIC also notes that introducing a no-fault system model would have fundamental cost implications in terms of raising revenue in the form of direct and indirect taxation.
At a broader level, I would be cautious about the introduction of a State-backed insurance scheme in this jurisdiction generally for a number of other reasons. Such an approach could actually decrease competition in the Irish insurance market, with insurers potentially deciding to cease insuring certain types of risks if there is a view that the State will insure these risks instead, particularly lines of business which are considered to be unprofitable. This would lead to a lack of choice for those seeking cover, which could ultimately mean that the cost of insurance becomes even more expensive than it is now. Also, there is no reason to believe that the State would be any better at managing risks than private insurance companies, and as a result there potentially would be a large financial exposure to the State if significant losses were incurred. Finally, any State insurance scheme would be required to comply with the same prudential rules as private companies, thereby meaning that the cost of any insurance would still have to reflect the risk involved.
In view of these factors, I am not convinced that a State-backed motor insurance scheme would be a panacea with regard to the cost or availability of insurance, either for younger drivers or other categories of consumers.
161. Deputy Brendan Smith asked the Minister for Finance his plans to implement measures to assist compliant household fuel merchants facing difficulties due to the illegal importation of products resulting in a price differential caused by smuggling and the imposition of a carbon tax; and if he will make a statement on the matter. [3827/19]
Amharc ar fhreagraSolid fuel carbon tax commenced in May 2013 and the current rates per tonne of carbon dioxide emitted are €52.67, €36.67, €17.99 and €27.99 respectively for coal, peat briquettes, milled peat and other peat. Annual net receipts for solid fuel carbon tax amounted to €25.3 million in 2018. Approximately 75% of solid fuel carbon tax yield relates to coal.
Revenue has responsibility for administering this tax and, as it does with all taxes and duties, takes a risk-focused approach in its deployment of resources on compliance activities. Solid fuel carbon tax is collected by Revenue on a self-assessment basis, and compliance with the law is enforced using the full range of compliance interventions and enforcement provisions for self-assessed taxes.
Liable fuel suppliers must file a return and pay for each bi-monthly period by the last day of the following month. Where suppliers do not submit returns by the due date, Revenue will issue an estimate of the tax due. The estimate is the amount of tax that Revenue will pursue if a supplier does not complete and file their return. If a taxpayer fails to pay the amount due, including any debt for which an estimate has issued, Revenue may refer the debt for enforcement action. This can include sheriff enforcement, civil proceedings through the courts or attachment of third parties. I am advised that, as of November 2018, Revenue has undertaken actions, including sheriff enforcement, civil proceedings through the courts or attachment of third parties, to enforce approximately €640,000 of solid fuel carbon tax.
Currently, there is no carbon tax on domestic solid fuel in Northern Ireland. This factor, combined with that jurisdiction's lower VAT rate on solid fuel and currency fluctuations, can give rise to significant price differentials for solid fuel between this State and Northern Ireland.
European Union Single Market constraints preclude the use of any cross-border movement controls in the administration of solid fuel carbon tax. Therefore, Revenue has no authority to stop vehicles and physically inspect loads of solid fuel. Similarly, the transport or possession of solid fuel that originated in Northern Ireland are not, in themselves, Revenue offences, and Revenue's officers have no authority to challenge such transportation or possession.
As I, and my predecessor, have pointed out before that the collection of solid fuel carbon tax is heavily reliant on the regulatory regime covering the marketing, sale, distribution and burning of solid fuels in the State. This regulatory regime imposes higher environmental standards on coal in the State than applies in Northern Ireland.
The regime is operated by the Department of Communications, Climate Action and Environment and is enforced by local authorities, who have powers to inspect premises and vehicles being used for the sale and distribution of solid fuel, collect samples of coal to check for adherence to environmental standards and to prosecute traders involved in selling illicit coal. The Regulations also provide for the establishment of a register of coal suppliers by the Environmental Protection Agency.
I am advised that Revenue is in contact at present with the Department of Communications, Climate Action and Environment to discuss the effectiveness of the regulatory regime for solid fuel and to explore how Revenue could support the Department to improve matters in light of continuing concerns that solid fuel sourced from Northern Ireland is getting onto the market here. I understand that contacts are ongoing with a view to undertaking a number of joint operations and to exploring the scope for follow-up action by Revenue in relation to persons found to be in breach of environmental regulations.
162. Deputy Brendan Smith asked the Minister for Finance his plans to implement additional measures to counteract the illicit trade in fuel, tobacco and drink products; and if he will make a statement on the matter. [3828/19]
Amharc ar fhreagraThe threat that fuel fraud and the illicit alcohol and tobacco trades pose to legitimate business, to consumers and the Exchequer is clear. I am satisfied that combatting such activity and criminality has been and continues to be a priority for Revenue.
Steps taken by Revenue to combat the illegal fuel trade include the introduction of stringent supply chain controls and reporting requirements, and a rigorous programme of enforcement action. In addition, Revenue and the UK Revenue and Customs undertook a joint initiative to introduce a new marker for use in marked fuels, from April 2015.
The industry view is that the action taken has been successful in curtailing fuel fraud. I am advised also that Revenue conducted random National Sampling Programmes in 2016 and 2017 to assess the extent of fuel laundering. The programmes each involved nearly one in ten of some 2,500 holders of auto fuel trader licences, and tests of diesel samples taken from the randomly selected traders found no evidence of the new marker in any of them. The results of this sampling are a clear indication that Revenue’s actions have resulted in the near elimination of the selling of laundered products at retail level. The 2018 sampling programme was expanded to include hauliers and other businesses in the transport sector. A very small number of samples from this programme tested positive, and another sampling programme will take place this year.
Illicit trade in alcohol can occur through the diversion of untaxed alcohol on to the market, through the production of counterfeit alcohol and through smuggling from countries with lower taxes. While there has been little evidence of large-scale illegal activity, as indicated by the low value of seizures in 2017 (€0.91million) when set against the overall value of the alcohol market (€6.1billion), I am assured that Revenue remains vigilant and takes appropriate action where illicit activity is detected. This action is informed by, inter alia, intelligence on criminal activity and risk-based examination of commercial traffic and stock in retail premises. Key results of this activity include the seizure of almost 200,000 litres of beer, believed to be associated with diversion fraud, since September 2017; the uncovering in November 2017 of a large-scale counterfeit vodka production plant processing highly dangerous denatured industrial alcohol and the detention in June 2018 at Dublin Port of a container carrying a quantity of raw alcohol with the capacity to produce over 50,000 litres of illicit alcohol. On 16 January 2019, officers at Dublin Port seized over 11,000 litres of alcohol with a retail value of over €403,000. The smuggled alcohol, which included over 10,200 litres of blended Scotch whiskey and 800 litres of alcopops, represents a potential loss to the exchequer of over €255,000.
Revenue acts against all aspects of the illegal tobacco trade, so that the illicit products involved can be seized and those responsible for smuggling or supplying them can be prosecuted. A combination of risk analysis, profiling and intelligence, and the risk-based screening of cargo, vehicles, baggage and postal packages is used to intercept illicit products. Action after importation includes checks at retail outlets, markets and private and commercial premises. This action has delivered considerable success, with the seizure in 2018 of almost 68 million cigarettes and approximately 1,900 kilograms of tobacco. In March 2018, a joint operation between Revenue and An Garda Síochána led to the closing down of a major illicit cigarette factory in Jenkinstown, County Louth. Over 20 million cigarettes and 70 tonnes of tobacco were seized at this facility, which could produce 250,000 illicit cigarettes an hour. At the end of October last, Revenue seized 7.2 million cigarettes that arrived into Dublin Port from Rotterdam. At the end of last November, Revenue seized over eight million smuggled cigarettes that arrived into Dublin Port from Rotterdam.
I know that Revenue and An Garda Síochána collaborate closely in acting against fuel, alcohol and tobacco crime, and also cooperate closely with their counterparts in Northern Ireland, in the framework of the North-South Joint Agency Taskforce. I am advised that this co-operation plays a key role in targeting the organised crime groups responsible for much of this criminality, who operate across jurisdictions.
I am satisfied that Revenue’s work against fuel fraud and the illicit alcohol and tobacco trades has delivered significant results. Revenue is, however, conscious of the resourcefulness of those involved in these forms of criminal activity and is vigilant for, and ready to respond to, any new developments in these areas. For my part, I will fully consider any additional proposals for legislative change or additional resources that may be brought forward by Revenue, which would enhance its capacity to deal effectively with fraud and criminality in these areas.
163. Deputy Mick Wallace asked the Minister for Finance if he will direct the Revenue Commissioners to defer the withdrawal of the concessionary application of the zero rate of VAT to certain food supplements until an impact study has been completed. [3848/19]
Amharc ar fhreagra171. Deputy Catherine Murphy asked the Minister for Finance the rationale for applying the 23% VAT rate to food supplements; if health supplements fall under this rate; his plans to task the tax strategy group with reviewing the decision in 2019 in the context of the budget; and if he will make a statement on the matter. [4142/19]
Amharc ar fhreagra176. Deputy Peter Burke asked the Minister for Finance if the impact in the change of policy for tax treatment of health food products which now incur a 23% VAT will be reviewed; if he will consider requesting the Revenue Commissioners to review the decision; and if he will make a statement on the matter. [4265/19]
Amharc ar fhreagraI propose to take Questions Nos. 163, 171 and 176 together.
The standard rate of VAT applies to food supplements. However, a Revenue Commissioners concession allowed the zero rate to be applied to certain types of vitamins, minerals and fish oils. Revenue has since decided to remove this concession with effect from 1 March 2019 so that all food supplements will be charged at the standard VAT rate.
It should be noted, however, that human oral medicines, including certain folic acid and other vitamin and mineral products licensed by the Health Products Regulatory Association, will continue to apply at the zero rate of VAT. Infant foods will also continue to be zero-rated.
The operation of the concession became extremely problematic as a result of efforts by certain businesses in the industry to extend the concession beyond the scope permitted. Consistent challenges to Revenue guidance and decisions on the VAT rating of products gave rise to serious concerns about compliance within the industry and unfair competition between compliant and non-compliant businesses.
However, independent of Revenue’s decisions on interpretation, I agreed during the recent Finance Bill to put in place a process that will conclude in the 2019 Tax Strategy Group Paper to examine some of the policy choices around the VAT treatment of food supplements.
164. Deputy Michael McGrath asked the Minister for Finance when Home Building Finance Ireland will be fully established; when funding will be issued; when applications will be submitted; if applications have been submitted; if so, the number and value of each; and if he will make a statement on the matter. [3915/19]
Amharc ar fhreagraHome Building Finance Ireland, HBFI, was incorporated on 7 December 2018, pursuant to the Home Building Finance Ireland Act 2018. The official launch of HBFI took place on 28 January 2019, with both myself and Minister Eoghan Murphy in attendance.
HBFI began accepting applications on 28 January 2019. The primary method of contact with HBFI is through its website (https://www.hbfi.ie) where an expression of interest can be submitted. HBFI can also be contacted through the HBFI contact email (info@hbfi.ie) or by means of telephone enquiry. As of 2:30pm on Monday, 28 January, five expressions of interest had been received.
HBFI has also provided a dedicated email address for general queries and representations from Oireachtas members (oireachtas@hbfi.ie). This email is monitored regularly, and queries are responded to promptly, while observing the statutory principle of client confidentiality that is set out in the HBFI Act.
HBFI will be participating in six information events around the country, in conjunction with the Construction Industry Federation of Ireland, CIF, to ensure that its members are fully briefed in terms of HBFI and how HBFI may support their development activities.
165. Deputy Peter Burke asked the Minister for Finance if entrepreneurial relief will be increased from a maximum of €1 million to €10 million in line with UK rules in view of the fact that Irish businesses have domiciled in the UK to take advantage of this higher rate; and if he will make a statement on the matter. [3961/19]
Amharc ar fhreagraIt is assumed that the Deputy is referring to the revised Entrepreneur Relief provided for in Section 597AA of the Taxes Consolidation Act 1997.
I should say that no evidence is available to me which suggests that a significant number of Irish businesses have domiciled to the UK to take advantage of the higher life-time CGT limit in that jurisdiction.
In general, consideration of any changes to the tax system in advance of Budget 2020 is undertaken within the annual Budgetary and Finance Bill process. The Deputy will therefore appreciate that I cannot comment on any possible changes at this time.
I am advised by the Revenue Commissioners that based on 2016 data which is the latest available information, the provisional cost of the relief in 2016 was in the region of €20 million. Increasing the lifetime limit to €10 million is estimated to cost €47 million.
166. Deputy Pearse Doherty asked the Minister for Finance if Ireland enjoys exemptions pursuant to Article 395(1) of Directive 2006/112/EC of 28 November 2006 or derogations more generally from EU VAT rules; if so, the exemptions in this regard; and if he will make a statement on the matter. [4001/19]
Amharc ar fhreagraIreland avails of the following exemptions provided for under Articles 394 and 395 of the EU VAT Directive (originally under Article 27(1) to (5) of the 1977 Sixth VAT Directive):
1. The exemption of fish supplied by fishermen to taxable persons, including buyers from outside Ireland, regardless of turnover threshold;
2. The treatment of supplies of zero-rated food products as supplies of a service when catered, resulting in the application of the 13.5% VAT rate;
3. In the case of goods made by a contractor from materials supplied by the customer, if the materials are taxable at a lower rate than the service rate applicable, this derogation allows for the value of the materials to be taxed at a rate equal to the difference between the higher and lower rates;
4. Relief from VAT to foreign taxable persons in receipt of taxable Irish services, subject to the foreign trader being registered for VAT or proving economic status;
5. Simplification arrangement for retailers, who can calculate their tax liability with reference to cash receipts rather than invoices issued;
6. A refund to non-registered farmers of the VAT charged on certain buildings and the drainage or clearing of land;
7, The application of zero-rating to fertilizers, animal feeding stuffs and seeds;
8. The two-thirds rule, which provides that a service which is normally taxable at the reduced rate, will be taxable at the rate applying to any goods provided in the course of providing that service, in certain circumstances.
Ireland also enjoys other derogations from the general VAT rules, as provided for under the VAT Directive. Articles 109 to 122 provide for the entitlement to apply the zero rate or a reduced rate of VAT to certain supplies of goods or services, where such rate was applied in a Member State prior to 1 January 1991. Ireland uses this derogation to continue to apply the zero rate to such supplies as printed books, human or oral medicines, food and children’s clothes and to apply a reduced rate to such supplies as construction services, domestic fuels, general repair and maintenance services and residential housing. The full list of goods and services operating under derogated VAT rate treatment in Ireland is contained in Part 2 of Schedule 2, and Part 2B, Part 3 and Part 4 of Schedule 3 to the VAT Consolidation Act 2010.
Historical VAT rate derogation is also operated by Ireland to certain services in accordance with Article 371 of the VAT Directive, which allows the continuation of VAT exemption where those services were exempt in a Member State as at 1 January 1978. The supply of passenger transport, public water services and admissions to sporting events are exempt from VAT under this derogation.
Finally, Ireland also avails of a derogation, as provided for under Article 17 of the VAT Directive, to restrict the right to deduct VAT in respect of expenditure on passenger cars, petrol, entertainment, accommodation and food or drink.
167. Deputy Pearse Doherty asked the Minister for Finance the performance to date of the sugar tax in terms of revenue raised versus predicted revenue and in terms of reduction in sugary drinks being sold; and if he will make a statement on the matter. [4005/19]
Amharc ar fhreagraI am advised by Revenue that the provisional receipts from Sugar Sweetened Drinks Tax, SSDT, in 2018 are €16.5 million. As this was a new tax, forecasting the level of receipts in advance was challenging, but based on the best available information was estimated at €30 million. This assumed a commencement date of 1 April 2018. The subsequent 1 May commencement date impacted on the returns filed and payments made. The estimated yield from SSDT in 2019 is provisionally set at €35 million.
Finally, the Deputy will be aware that the primary purpose of this tax is to change behaviour rather than to raise revenue. As such, the early indications are that the tax is working effectively in reducing the volume of sugar-sweetened drinks being consumed in Ireland.
168. Deputy Pearse Doherty asked the Minister for Finance the estimated cost of reducing VAT to a rate of 0% on household utility bills; if this is feasible under EU rules; and if he will make a statement on the matter. [4006/19]
Amharc ar fhreagraThe VAT rating of goods and services is subject to the requirements of EU VAT law, with which Irish VAT law must comply. The VAT Directive provides that Member States may apply either one or two reduced rates of VAT to certain goods and services listed in Annex III of the Directive. In addition, the Directive allows for historic VAT treatment to be maintained under certain conditions on certain goods and services not provided for in Annex III. Ireland has retained the application of the reduced rate of VAT, 13.5%, to the supply of fuel, gas, oil and electricity services for domestic use, and, under the Directive, the rate applicable to such services cannot be reduced below 12%. It is not possible, therefore, to apply a 0% rate to household utilities.
I am advised by the Revenue Commissioners that VAT returns do not identify specific transactions or activities and therefore it is not possible to estimate the cost of reducing the VAT rate on these specific services.
