Vehicle Registration

Ceisteanna (163)

Peter Burke

Ceist:

163. Deputy Peter Burke asked the Minister for Finance if the level of vehicle registration tax being charged for cars imported from the UK will be reviewed; the way in which the tax is calculated; if the calculation will be reviewed in view of the high level charged to particular car models and engines; and if he will make a statement on the matter. [29599/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

Ireland’s Vehicle Registration Tax regime for passenger cars (VRT Category A) is based on CO2 emissions in order to encourage the purchase of vehicles with lower CO2 emissions. This is in line with broader climate change policy as well as EU Regulations which set ever lower binding emissions targets on the automotive industry in relation to new car and van fleets. 

The Deputy can find an explanation for how the tax is calculated at the following link:https://www.revenue.ie/en/importing-vehicles-duty-free-allowances/guide-to-vrt/calculating-vrt/index.aspx

In relation to a review of the VRT regime, the Deputy will be aware that there is a commitment contained in the Government's Climate Action Plan to recalibrate the VRT regime for passenger cars in light of recent progress on emissions standards. This means that the environmental rationale of the current VRT regime must be strengthened. My officials will be addressing this matter further in the context of the Tax Strategy Group.

Tax Reliefs Data

Ceisteanna (164)

Róisín Shortall

Ceist:

164. Deputy Róisín Shortall asked the Minister for Finance the tax reliefs available at the marginal rate of tax; and the estimated saving in 2020 and in a full year if these were standard rated. [29663/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am informed by Revenue that the Taxes Consolidation Act 1997 (TCA) provides the following reliefs and deductions at a taxpayer’s marginal rate of tax: 

- Section 114 provides a deduction for expenses wholly, exclusively and necessarily incurred in the performance of the duties of employment.

- Sections 381 – 390 provide deductions in relation to losses incurred in a trade or profession and property letting.

- Section 384 provides relief for Case V losses (can only be set against Case V profits).

- Section 467 provides for a deduction of up to €75,000 for employing a carer for an incapacitated individual.

- Section 469 provides relief at the marginal rate for expenditure incurred in respect of nursing home expenses. All other health expenses are relieved at the standard rate.

- Section 471 provides a deduction in respect of Permanent Health Benefit premiums up to a maximum of 10% of salary.

- Section 472B provides an allowance of €6,350 to qualifying seafarers.

- Section 482 allows ‘loss relief’ to any person who has incurred qualifying expenditure in respect of an approved building that is either owned or occupied by him/her.

- Section 483 provides relief for certain gifts made to the Minister for Finance.

- Section 485F allows the carry-forward of excess reliefs of high earners affected by the high earners’ restriction.

- Section 664 provides for farmland leasing relief. This relief is given as a deduction (up to a specified limit) for profits from rent received under a ‘qualifying lease’.

- Section 666 provides for stock relief of 25% for all farmers, section 667B provides 100% relief for young farmers and section 667C provides 50% relief for partners in registered farm partnerships. These reliefs are given as a deduction, which is calculated by reference to increase in closing stock value over opening stock value.

- Section 667D provides for the succession tax credit. It is given in the form of a €5,000 tax credit split between the partners in a succession farm partnership on the basis of their profit-sharing ratio.

- Relief for contributions to retirement benefits schemes and personal pensions (subject to certain maxima) – granted under Part 30 of the TCA (section 774(7) for occupational schemes, section 776 for statutory schemes, section 784 for retirement annuity premiums, Ch 2A of Part 30 for PRSAs. 

- Section 790C provides relief for the Pension Related Deduction (PRD) up to 31 December 2018). Section 790CA provides relief for the Additional Superannuation Contribution (ASC) (from 1 January 2019).

- Section 792 provides relief in respect of deeds of covenant in favour of permanently incapacitated individuals.

- Section 823A provides for a deduction of up to €35,000 under the Foreign Earnings Deduction for qualifying travel to certain countries.

- Section 847A provides relief for donations to certain sports bodies by self-assessed taxpayers.

- Sections 1025 and 1031J provide relief for maintenance payments for separated spouses or civil partners, respectively. - Part 9 of the TCA provides that capital allowances in relation to industrial buildings and plant and machinery are available as deductions in taxing trading income and rental income.

- Part 16 of the TCA provides relief under the Start-Up Relief for Entrepreneurs scheme.

 Revenue has also advised me that, based on 2016 data, which is the latest actual year for which data currently exists, the tentative yield, if the above reliefs were standard rated is of the order of €700m on a full year basis. This estimate does not account for alterations in taxpayer behaviour, or interactions between the reliefs.

Real Estate Investment Trusts

Ceisteanna (165)

Brendan Ryan

Ceist:

165. Deputy Brendan Ryan asked the Minister for Finance the details of plans and the timeline for implementation of same to address the tax loopholes enjoyed by private equity funds which are increasing their housing stock for buy-to-let purposes and which do not pay the same level of tax as residential landlords; and if he will make a statement on the matter. [29671/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

In light of recent commentary on the property market and in the context of the question asked, I believe the Deputy is referring to Real Estate Investment Trusts, Irish Real Estate Funds and section 110 companies.

Finance Act 2013 introduced the regime for Real Estate Investment Trusts (REITs) in Ireland. The function of the REIT framework is not to provide an overall tax exemption but rather to facilitate collective investment in rental property by removing a double layer of taxation which would otherwise apply on property investment via a corporate vehicle. Property rental income and gains arising are exempt from tax within the REIT and are taxed at the investor level when distributed through dividend withholding tax at 20%. The legislation requires that 85% of all rental income profits be distributed annually to shareholders. The REIT is subject to corporation tax on income and gains not arising from the property rental business of the REIT.  Distributions to certain limited classes of investors such as pension funds and charities do not suffer the withholding tax as they are more generally exempt from tax.

Irish Real Estate Funds (IREFs) are investment undertakings, excluding UCITS, which derive 25% or more of its market value from assets deriving their value directly or indirectly from real estate in the State. The IREF regime was introduced in Finance Act 2016 in response to concerns raised regarding the use of certain collective investment vehicles to invest in Irish property. Investors had been using the structures to minimise their exposure to Irish tax on Irish property transactions. The regime provides, with some exceptions, that where a unit holder receives value from the IREF, an IREF withholding tax of 20% will generally apply.

Section 110 of the Taxes Consolidation Act 1997 sets out the tax regime applicable to special purpose companies set up to securitise assets. Section 110 is designed to create a tax neutral regime for bona-fide securitisation purposes. Section 110 companies can only hold certain qualifying assets - real property, such as land and buildings, is not an asset that a qualifying company can hold. They can however hold loans and other financial assets that derive their value from Irish land and buildings. Amendments were made to the taxation of section 110 companies in Finance Act 2016 to address the issues relating to the taxation of Irish property. The changes related to the taxation of qualifying companies which held loans that derived their value from Irish land. The effect of these changes was to ensure that profits generated from Irish real estate remain within the charge to tax.

With regard to acquisitions of property by institutional investors, an investment strategy which includes the purchase (including by forward-funding) of an entire apartment block or development inevitably creates an impression that the investment is disproportionate to other activities in the market, particularly the activities of private home buyers. However this needs to be seen against a background of still muted supply in the property market and a continuing shortage of rented residential accommodation.

Furthermore, while the role of institutional investors is growing, particularly in the urban apartment market segment, it is still minor in proportion to the total rental sector. Data provided to my Department by the Residential Tenancies Board for May 2019 shows that the rented residential accommodation market is still dominated by small landlords. The majority (over 70%) of landlords registered a single rental tenancy, with over 96% of landlords registering 5 tenancies or less. Landlords with 5 tenancies or less account for almost 72% of all registered tenancies. The top 21 landlords account for 3.11% of all registered tenancies. The percentage of landlords with 20 or more tenancies has decreased from 0.52% in 2017 to 0.43% in 2019.

Institutional investors have an important role to play in increasing property supply and I am satisfied that tax regimes which apply taxation at the level of the investor are appropriate to collective investment vehicles of this nature. Given the important implications which developments in the property market can have for the economy, my Department actively monitors developments in this sector on an ongoing basis. In this context, the Deputy may be aware, as part of the 2018 Finance Bill process I committed that my officials would undertake a report on REITs, IREFs and Section 110 companies as they invest in the residential property market. This report to be presented to the Tax Strategy Group this month.

Departmental Schemes

Ceisteanna (166)

John Lahart

Ceist:

166. Deputy John Lahart asked the Minister for Finance his views on a car scrappage scheme; the estimated cost of such a scheme; if consideration is being given to such a scheme; and if he will make a statement on the matter. [29718/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Government's Climate Action Plan contains the following action point: As an alternative to the current grant regime, consider in 2020 a car-scrappage scheme to promote the purchase of electric vehicles. This is directed to my Department.

The previous car scrappage scheme operated from January 2010 to July 2011. VRT relief of up to €1,500 was available upon registration of a new vehicle, subject to the scrappage of a qualifying old vehicle. The VRT relief was provided where a new category A, or passenger car of emissions band A or B with CO2 emissions of 140g/km or lower was purchased and registered and an old car scrapped.

To qualify for relief, the scrapped vehicle must have been registered in the State in the name of the purchaser of the new car for at least 18 months previous to the date of scrappage;  and on the day of scrappage been ten years old or more from the date of first registration.

The current situation is different. There are currently significant Government-backed incentives in place for electric vehicles including VRT relief of up to a further €5,000. Based on this existing relief, a person purchasing an electric vehicle with an Open Market Selling Price of under €36,000 would currently pay no VRT. This suggests that any car scrappage scheme that was based on the provision of VRT relief would be ineffective because no VRT is paid on the registration of most Battery Electric Vehicles to begin with. The principal effect of any such VRT relief would be to gift taxpayers money to reduce the acquisition costs for buyers of higher end BEVs.  In that regard it is unlikely that there would be high volume of motorists with 10 year old cars who would be in the market for higher end Battery Electric Vehicles.    

In addition, the market is more complex than in 2010 with the emergence of PCPs as a popular method of acquiring a car for use and potentially purchasing it. The default position is that the legal owner of the vehicle, generally the car financing company, would be the direct beneficiary of any such VRT relief.

VAT Rate Application

Ceisteanna (167)

Denis Naughten

Ceist:

167. Deputy Denis Naughten asked the Minister for Finance the status of the zero rate of VAT on food supplements; if public consultation has taken place; and if he will make a statement on the matter. [29726/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

VAT legislation does not specifically apply the zero rate of VAT to food supplements but shortly after the introduction of VAT in 1972  Revenue applied a concessionary zero rating to certain vitamin, mineral and fish oil products. As the market developed over the years this treatment resulted in the zero rating by Revenue of further similar products, including products other than vitamins, minerals and fish oils, and these rulings were published in Revenue’s VAT rates database. The evolution of the scope of the concessionary treatment of certain types of food supplements was well understood by the industry and by agents representing clients in the food supplements sector. The scope had broadened progressively over time to the point that it had become increasingly difficult to maintain an effective distinction between food supplements that could benefit from the zero rate and those that were standard rated.

After undertaking a comprehensive review of the VAT treatment of food supplements, including commissioning an expert report on the definition of food for the purposes of the VAT Consolidation Act, Revenue issued new guidance in December 2018 which removed the concessionary zero rating of various food supplement products with effect from 1 March 2019.  

Following representation from Deputies and from the industry I wrote to Revenue outlining my plans to examine the policy and legislative options for the taxation of food supplement products in the context of Budget 2020, including the opening of a public consultation. Revenue decided to extend the date of the removal of the zero rating from March to November 2019, to allow for the enactment of any potential legislative changes in the context of Budget 2020. 

The public consultation in relation to the appropriate VAT rate for food supplements closed on 24 May.

Officials in my department are reviewing the submissions received and the outcome of this review will be presented to a meeting of the Tax Strategy Group (TSG) on 9th July.  The TSG Papers will be published on the Department's website shortly afterwards.

National Economic Dialogue

Ceisteanna (168)

Brendan Howlin

Ceist:

168. Deputy Brendan Howlin asked the Minister for Finance if he will report on his attendance at the National Economic Dialogue. [29289/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

As the Deputy will be aware the National Economic Dialogue took place for the fifth time on June 26th and June 27th this year. The Dialogue provided an opportunity to foster discussion between the relevant stakeholders on how to best sustain and strengthen the recovery while taking into account the many competing economic and social priorities within the limited available resources.

The Dialogue was attended by representatives from community, voluntary and environmental groups, business unions and the academic community. A number of members of the Select Committee on Budgetary Oversight also contributed to the event.

The Chair’s report and the reports of each of the six rapporteurs for the breakout sessions are currently being finalised, and once completed they will be made available on www.budget.gov.ie. My opening remarks on “Understanding the Context: Economic Perspectives”, my closing remarks at the Dialogue and the paper presented at the NED are  currently available on this website.

I believe the National Economic Dialogue is a very constructive exercise. Decisions that have been made on the content of previous budgets have been influenced by previous Dialogues and I intend to reflect on this year’s discussion when formulating Budget 2020.

VAT Rate Application

Ceisteanna (169)

Charlie McConalogue

Ceist:

169. Deputy Charlie McConalogue asked the Minister for Finance his plans to change the hospitality VAT rate to 9%; and if he will make a statement on the matter. [29788/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The second reduced 9% VAT rate was introduced on a temporary basis as part of the Jobs Initiative from July 2011 to December 2013 and was aimed at boosting tourism and the creation of additional jobs in that sector. The rate was designed to be temporary, but was maintained in subsequent Budgets. In 2016, the Programme for Partnership Government committed to maintaining the 9% VAT rate, dependent on prices remaining competitive in the sector. I decided in Budget 2018 not to make any change to the 9% VAT rate. However, I accepted that the rate must be subject to analysis. In this context, I asked my Department to undertake a comprehensive study of all aspects of the 9% VAT rate ahead of Budget 2019.

The “Review of the 9% VAT rate: Analysis of Economic and Sectoral Developments” was published by my Department in July 2018, in order to better inform any decision in relation to the 9% reduced rate going forward.  In addition to assessing the relevance, cost, value-for-money, and impact to date of the 9% VAT rate, the Review also looked at the estimated impact on the relevant sectors were the rate to be increased.

The Review found that tourism expenditure was more sensitive to income growth and the economic cycle than price changes. The economy is currently performing well, with high levels of employment and strong demand in the tourism sector. This positive economic outlook means that the income channel of demand is likely to ensure that economic activity within the sector remains strong. The Review concluded that the VAT rating applied to the tourism sector should not greatly impact demand or employment in the sector. The Budget decision to increase the VAT rate was made following this analysis.

Furthermore, the Revenue Commissioners also published a report on the 9% VAT Rate in June 2018 which analyses the output and employment impact of the 9% VAT rate using Revenue data. The analysis found an estimated increase in employment of on average 1.8 employees for each firm benefitting from the reduced rate in the accommodation and food sector in the year following the introduction of the reduced rate. However, beyond the short term, they were unable to distinguish the impact of the rate on employment from the impact of other factors in the economy.

Given the impact of an increase in the VAT rate on the hospitality sector has only recently been reviewed by my Department and the Revenue Commissioners, there does not seem to currently be a case for reviewing the impact of the increase.

However, in noting that changes made in Budget 2019 may present a challenge to the tourism and hospitality sector, an extra €35 million was allocated to the Department of Transport, Tourism and Sport in order to provide more targeted supports. This allocation includes targeted supports of €4.5 million for regional initiatives such as Ireland’s Hidden Heartlands and the Wild Atlantic Way, and nearly €10 million for the development of greenways.

Universal Social Charge Abolition

Ceisteanna (170)

Fiona O'Loughlin

Ceist:

170. Deputy Fiona O'Loughlin asked the Minister for Finance his plans to abolish the universal social charge; and if he will make a statement on the matter. [29801/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

An inter-departmental working group was established in February 2018 to examine and report on options for the amalgamation of USC and PRSI over the medium-term. The working group completed their work, in line with their terms of reference and their report was submitted to me in late 2018. Follow-on decisions will be taken in due course and I will make these public at the appropriate time.

More generally, the Government is committed to measures that positively benefit workers while also keeping the tax base broad.

Our income tax system has been transformed since 2008, following a necessary reform to broaden the income tax base in the interest of ensuring a stable revenue stream to fund essential public services.

I am determined to balance the priorities of ensuring that our personal taxation system remains progressive, competitive but also resilient in the future. 

This is why we have been introducing targeted changes to the income tax system within available resources to make steady and sustainable progress in reducing the income tax burden, focusing on low and middle income earners. This has been done by making targeted changes to the USC and also by increasing the entry point to the higher rate of income tax.

Tax Strategy Group

Ceisteanna (171)

Fiona O'Loughlin

Ceist:

171. Deputy Fiona O'Loughlin asked the Minister for Finance the timeframe for the publication of the tax strategy papers; and if he will make a statement on the matter. [29802/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Deputy will be aware that the Tax Strategy Group (TSG) is in place since the early 1990s and chaired by the Department of Finance with membership comprising senior officials and political advisers from a number of Civil Service Departments and Offices. Papers on various options for tax policy changes are prepared annually by officials. The TSG is not a decision-making body and the papers produced are simply a list of options and issues to be considered in the Budgetary process.

In line with the Government’s commitment to budgetary reform including greater engagement with the Oireachtas, the Tax Strategy Group papers are now published in advance of the Budget to facilitate informed discussion. It is my intention that publication of the Papers online will take place shortly after the annual meeting of the Tax Strategy Group. Therefore I would expect publication before the end of July.

Tax Code

Ceisteanna (172)

Fiona O'Loughlin

Ceist:

172. Deputy Fiona O'Loughlin asked the Minister for Finance the estimated time for the tax rate on roll your own tobacco to reach equivalence with manufactured cigarettes; and if he will make a statement on the matter. [29803/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am advised by Revenue that if tax on roll-your-own tobacco was increased using an annual tax escalator of 10%, it would take approximately four years for the tax rate on roll-your-own tobacco to reach equivalence with cigarettes. That is providing there was no further increase in Tobacco Products Tax on cigarettes during that period.

VAT Rate Application

Ceisteanna (173)

Fiona O'Loughlin

Ceist:

173. Deputy Fiona O'Loughlin asked the Minister for Finance his views on the feasibility of including nicotine patches in the list of medicines which are zero rated for VAT; and if he will make a statement on the matter. [29804/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The VAT rating of goods and services is subject to the requirements of EU VAT law, with which Irish VAT law must comply. In accordance with Irish VAT legislation, oral medicines (for human consumption), licensed/authorised by the Health Products Regulatory Authority, are liable to VAT at the zero rate. Ireland’s application of the zero rate of VAT to oral medicines derives from the derogation under Article 110 of the EU VAT Directive. Under that provision, Ireland may retain the zero rate on goods and services which was in place on 1 January 1991. As oral medicines were liable to the zero rate of VAT on that date, Ireland continues to apply this rate but may not extend its scope. I am advised by the Revenue Commissioners that as nicotine patches cannot be considered an oral medicine there is no discretion, under the Directive, to zero rate these products.

Fiscal Policy

Ceisteanna (174)

Michael McGrath

Ceist:

174. Deputy Michael McGrath asked the Minister for Finance if the indicative nominal budgetary package figure for 2020 of €2.8 billion is after the transfer of €500 million to the rainy day fund; if the €500 million must not come out of the unallocated figure; if the treatment is consistent for 2021 to 2024; and if he will make a statement on the matter. [29859/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I can advise the Deputy that the anticipated transfer of €500 million to the Rainy Day Fund (RDF) will not impact on the indicative nominal budgetary package of €2.8 billion for 2020 set out in the Summer Economic Statement (i.e. the proposed budgetary package is net of this payment) . 

It is important to point out that transferring money to the RDF will not be considered general government expenditure, as the payment to the RDF is a flow within the general government sector. While this expenditure is a non-voted capital payment impacting upon the Exchequer balance, it does not affect the headline general government balance. This treatment will be consistent over the forecast horizon.

Tax Credits

Ceisteanna (175)

Michael McGrath

Ceist:

175. Deputy Michael McGrath asked the Minister for Finance further to Parliamentary Question No. 42 of 27 June 2019, if the restriction referred to in subsection (8) (details supplied) applies even in circumstances in which the home carer has no income other than carer’s benefit in a particular year. [29866/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

Subsection (8) of section 466A of the Taxes Consolidation Act 1997 (TCA) provides that a couple may not receive both the increased standard rate band and the home carer credit in a tax year.

Carer’s Benefit is taxable income under section 112 TCA. As a result, a jointly assessed couple where one spouse or civil partner is in receipt of this payment is considered to be a dual income household and, thus, entitled to an increase in the standard rate band of the lesser of €26,300 or the income of the lower earner. This means that the maximum joint standard rate band a couple can have is €70,600 (€44,300 + €26,300), which is the equivalent of double the single earner rate band. However, it is not possible for one spouse or civil partner to have the full extended rate band of €70,600- an individual can have no more than €44,300.

If a couple decide to opt for the home carer credit instead of the increased standard rate band, the carer spouse or civil partner may earn up to €7,200 per year without affecting the amount of the credit awarded. However, Carer’s Benefit is not taken into account when calculating the income of the carer spouse or civil partner for the purposes of the €7,200 income threshold. In other words, if the only income of the carer spouse or civil partner is Carer’s Benefit, there will be no reduction in the home carer credit due to that spouse or civil partner.

Revenue will apply whichever relief is the most beneficial for the couple concerned.

Official Engagements

Ceisteanna (176)

Bobby Aylward

Ceist:

176. Deputy Bobby Aylward asked the Minister for Finance his plans to engage in bilateral meetings with the Austrian Minister for Finance; and if he will make a statement on the matter. [29890/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

As part of my ongoing international engagements, I meet monthly with my EU counterparts at meetings of ECOFIN and Eurogroup, including with my Austrian counterpart, Eduard Muller.

I intend to continue my dialogue with him and my other Finance Minister counterparts in the period ahead. 

At present, there are no arrangements in place for a bilateral meeting with Minister Muller.

VAT Rate Application

Ceisteanna (177, 178)

Darragh O'Brien

Ceist:

177. Deputy Darragh O'Brien asked the Minister for Finance if EU VAT directives allow the Revenue Commissioners the discretion to operate a zero VAT concession rate for selected products or services; and if he will make a statement on the matter. [29914/19]

Amharc ar fhreagra

Darragh O'Brien

Ceist:

178. Deputy Darragh O'Brien asked the Minister for Finance the number to the nearest 10 of zero VAT rate determinations for food supplements issued by the Revenue Commissioners in each of the years 2011 to 2017; and if he will make a statement on the matter. [29915/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 177 and 178 together.

I am advised by Revenue that the provisions of the EU Directive are transposed into Irish VAT law, which is interpreted by the Irish Courts based on the principles and purpose of the Directive. Interpretation of this legislation evolves on a continuous basis, as a result of judgements handed down by Irish courts and, ultimately, the CJEU. Revenue continuously reviews its interpretation of VAT legislation in line with these judgements. In addition, the European Commission may challenge any Member State where they take the view that the VAT treatment of particular transactions or activities by a Member State are not in accordance with the VAT Directive.

The Directive does not specify the rate of VAT applying to the supply of every known product or service; it provides a framework for the application of rates to broad categories of goods or services. Within this framework there is room for differing interpretations of the legislation as to the rate of VAT applying to specific goods or services. In particular this may happen following the development of new goods or services. In these circumstances, Revenue and taxpayers interpret the law as it stands and if taxpayers disagree with Revenue’s interpretation they can appeal the matter to the Tax Appeal Commissioners and ultimately to the CJEU.

VAT legislation does not apply the zero rate of VAT to food supplements but shortly after the introduction of VAT Revenue applied a concessionary zero rating to certain vitamin, mineral and fish oil products. As the market developed over the years this treatment resulted in the zero rating by Revenue of further similar products, including products other than vitamins, minerals and fish oils, and these rulings were published in Revenue’s VAT rates database. The scope of the relatively narrow original zero rating of food supplement products permitted by Revenue broadened progressively over time to the point that it had become increasingly difficult to maintain an effective distinction between food supplements that could benefit from the zero rate and those that were standard rated. After undertaking a comprehensive review of the VAT treatment of food supplements, including getting an expert report on the definition of food for the purposes of the VAT Consolidation Act, Revenue concluded that the status quo was no longer sustainable.

My Department has recently concluded a public consultation on the taxation of food supplement products. The consultation sought input from a wide range of interested parties, including from health and nutrition experts, as well as my colleague the Minister for Health, to ensure that any legislative changes brought forward are evidence based. The results of the consultation will be included in the 2019 VAT Tax Strategy Group paper as part of the Budget 2020 process.

I am also advised by Revenue that it is unable to provide information on the number of instances in which it advised taxpayers over the years 2011 to 2017 that particular food supplement products were zero rated.

Climate Change Policy

Ceisteanna (179)

Denis Naughten

Ceist:

179. Deputy Denis Naughten asked the Minister for Finance if his Department has ceased the purchase and use of single-use plastics; the public bodies and agencies under his remit to which he has issued an instruction to cease the purchase and use of single-use plastics; when the instruction issued; the bodies which have confirmed that they no longer purchase and use single-use plastics, respectively; the bodies which have not provided such confirmation to date; when they will confirm; and if he will make a statement on the matter. [29985/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

My Department had already begun eliminating single use plastics prior to the Government Decision earlier this year regarding actions by Departments and Agencies on single use plastics, prevention of waste and green public procurement. While it has not purchased any single use plastics since January 2019, my Department retains an existing inventory of non-single use, re-useable and recyclable plastic cups for use in selected areas for use by external visitors to the Department.

There are seventeen bodies under the aegis of my Department. While twelve have confirmed to me that they do not purchase or have ceased the purchase of single use plastics, a number of these bodies retain a stock of previously purchased plastic cups or cutlery and are in the process of using up such existing stock. These are the Office of the Comptroller and Auditor General, the Central Bank of Ireland, the Financial Services and Pensions Ombudsman, Home Building Finance Ireland, the Investor Compensation Company DAC, the Irish Bank Resolution Corporation, the Irish Financial Services Appeals Tribunal, the National Asset Management Agency, the National Treasury Management Agency, the Office of the Revenue Commissioners, the Strategic Banking Corporation of Ireland and the Tax Appeals Commission.

Office and administrative support facilities for the Credit Review Office are provided by Enterprise Ireland and as such any policies in regard to the use of single use plastic would be a matter for the Department of Business, Enterprise, and Innovation.

The Credit Union Advisory Committee convenes its meetings in my Department’s offices.

While the Disabled Drivers Medical Board of Appeal is a body under the aegis of my Department, its meetings are held in the National Rehabilitation Hospital (NRH) premises which is under the remit of the Department of Health, and accordingly any policies in place in the NRH are a matter for the Department of Health. 

The Irish Fiscal Advisory Council has informed me that it has no formal policies in place in relation to the purchase and use of single use plastics. However, it has indicated that it rarely purchases or uses items that would meet this criteria.

The Credit Union Restructuring Board has been wound down and legislation formally dissolving the body is currently going through the Houses of the Oireachtas.

NAMA Social Housing Provision

Ceisteanna (180)

Darragh O'Brien

Ceist:

180. Deputy Darragh O'Brien asked the Minister for Finance the number of social housing units identified by NAMA; the number transferred to local authorities by county; and if he will make a statement on the matter. [29999/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am advised that NAMA has conducted regular reviews of the assets securing its loan portfolio to establish if vacant residential properties could be utilised for social housing. Up until end-March 2019, NAMA had identified a total of 7,050 residential properties as being potentially suitable for social housing. Of the units identified, demand was confirmed by local authorities for 2,729 properties, of which 2,544 have been contracted or delivered for social housing use by end-March 2019.

It is important to note that the confirmation of demand and decisions regarding the suitability of properties is a matter for the Housing Agency and local authorities, and NAMA plays no role in this. I am advised that local authorities take account of the requirement to provide an appropriate mix of housing tenures and to avoid undue housing segregation within individual developments and wider residential area. Social housing units are provided to local authorities; approved housing bodies (AHBs) or the Housing Agency and delivery can take the form of direct purchase or long-term leasing via NARPS. Of the 2,544 properties delivered to end-March 2019, local authorities have directly acquired or leased 244 units; AHBs have acquired or leased 2,281 and the Housing Agency has acquired 19.

The table outlines the number of potentially suitable residential units identified by NAMA and the total number completed/contracted to end-March 2019, indicating delivery either to the local authority, Housing Agency or to a AHB. This and other information on NAMA’s social housing initiatives is available on the NAMA website, www.nama.ie.  

Local Authority Area

Total completed/ contracted

Local Authority

Approved housing bodies

The Housing Agency

Carlow Co. Co.

103

0

103

0

Clare Co. Co.

55

17

38

0

Cork City Council

138

53

85

0

Cork County Council

322

35

282

5

Donegal Co. Co.

5

0

5

0

Dublin City Council

413

8

403

2

DLR Co. Co.

282

38

243

1

Fingal Co. Co.

143

25

109

9

Galway City Council

196

22

174

0

Galway County Council

32

8

24

0

Kerry Co. Co.

42

0

42

0

Kildare Co. Co.

235

8

227

0

Kilkenny Co. Co.

56

11

44

1

Laois Co. Co.

35

0

35

0

Limerick City and County Co.

17

0

16

1

Louth Co. Co.

27

12

15

0

Meath Co. Co.

39

0

39

0

Monaghan Co. Co.

38

0

38

0

Offaly Co. Co.

30

0

30

0

Sligo Co. Co.

4

0

4

0

South Dublin Co. Co.

146

5

141

0

Waterford Co. Co.

51

0

51

0

Westmeath Co. Co.

20

0

20

0

Wexford Co. Co.

102

2

100

0

Wicklow Co. Co.

13

0

13

0

Total

                     2,544

244

            2,281

19

 

Home Building Finance Ireland Establishment

Ceisteanna (181)

Darragh O'Brien

Ceist:

181. Deputy Darragh O'Brien asked the Minister for Finance the amount loaned out by Home Building Finance Ireland to date; the estimated number of homes to be built; and if he will make a statement on the matter. [30000/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

Since its launch earlier this year HBFI has been actively engaging with small and medium sized builders and developers throughout the country through a range of market awareness raising initiatives. HBFI continues to benefit from a strong pipeline of interest from prospective borrowers as a result of these engagement activities.

The drawdown of funds relating to the first facilitates approved has already commenced with HBFI having approved a number of additional facilities since April. HBFI will publish information on its lending activities on a half-yearly basis with the first such report to be published next week.

Loan Books Purchasers

Ceisteanna (182)

Brendan Griffin

Ceist:

182. Deputy Brendan Griffin asked the Minister for Finance the steps he will take to protect the future of a small company (details supplied) in relation to a loan sale in County Kerry; and if he will make a statement on the matter. [30007/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

As the Deputy will be aware, as Minister for Finance, I cannot stop or reverse loan sales even by the banks in which the State has a shareholding. Decisions in this regard, as well as the criteria used to decide the make-up of loans to be included, are the sole responsibility of the board and management of the banks which must be run on an independent and commercial basis. The banks’ independence is protected by Relationship Frameworks which are legally binding documents that I cannot change unilaterally. These frameworks, which are publicly available, were insisted upon by the European Commission to protect competition in the Irish market.

It is important to reiterate that the protections in place for all borrowers before a sale, either by way of securitisation or otherwise, remain unchanged. Under the Consumer Protection (Regulation of Credit Servicing Firms) Act 2018, which came into effect on 21 January 2019, if a loan is transferred the holder of the legal title to the credit must now be authorised by the Central Bank as a credit servicing firm. 

Such credit servicing firms must act in accordance with Irish financial services law that applies to ‘regulated financial service providers’ including the Central Bank (Supervision and Enforcement) Act 2013 (Section 14) (Lending to Small and Medium-Sized Enterprises) Regulations 2015 (‘the SME Regulations’). This ensures that consumers whose loans are sold to another firm, maintain the same regulatory protections that they had prior to the sale.

In regards to the overdraft issue, my response to your PQ in April (17964/19) advised that when overdrafts were being converted into a loan facility and transferred to a Retail Credit Firm customers had the right to appeal the withdrawal of the overdraft facility to the Credit Review Office (CRO). However in this case the company has not appealed and the bank (as per the letter you supplied) has confirmed that the company may apply for a new facility. Should this application be unsuccessful then the company has the right to appeal the bank's decision to the Credit Review Office (CRO). The CRO is able to review cases where credit facilities up to €3m are refused, withdrawn, or offered on unreasonable conditions. Details of how to appeal to the CRO can be found on the website www.creditreview.ie. 

VAT Exemptions

Ceisteanna (183, 184)

Pearse Doherty

Ceist:

183. Deputy Pearse Doherty asked the Minister for Finance the reason self-employed persons can reclaim VAT paid on diesel but not petrol; and if he will make a statement on the matter. [30040/19]

Amharc ar fhreagra

Pearse Doherty

Ceist:

184. Deputy Pearse Doherty asked the Minister for Finance the estimated cost of allowing self-employed persons reclaim VAT on petrol purchased for business purposes; and if he will make a statement on the matter. [30041/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 183 and 184 together.

Irish VAT law does not provide for a VAT rebate for diesel or petrol. The different treatment of VAT as regards petrol and diesel relates to the VAT input deductibility entitlement of VAT registered taxpayers. Businesses who make supplies that are charged to VAT are entitled to claim input VAT on their business expenses. VAT registered persons are entitled to claim the cost of VAT on the purchase of diesel used in the course of their business, as is the case with most business costs. However, section 60 of the VAT Consolidation Act 2010 prohibits VAT deductibility by businesses on certain goods and services which, by their ubiquitous nature, are not easily distinguishable from general non-business use. This is for anti-avoidance reasons.

Expenditure on petrol, as well as expenditure on food, drink, accommodation, and entertainment, is specifically excluded from deductibility entitlement, even where the petrol or other goods and services are acquired or used for the purpose of a taxable business. 

Under Article 176 of the EU VAT Directive, Ireland can retain certain restrictions on VAT deductibility that were in place before 1979. As VAT input deductibility has been restricted on petrol since 1972, Ireland can retain that block on deductibility. While it is legally possible to apply the normal rules of VAT deductibility to petrol, once the block on deductibility is eased or removed it would not be possible to re-introduce it. There is a case for petrol and diesel to be treated equally in terms of input deductibility entitlements as there is a greater level of diesel-run personal motor vehicles in operation today than in the past. However, the provisions of Article 176 prohibit the application of a new deductibility restriction on diesel expenditure. As anti-avoidance concerns regarding petrol expenditure deductibility continue, the restriction on VAT deductibility remains valid.

I am advised by Revenue that items of expenditure such as the value of petrol purchases are not separately identified on VAT or self-assessed tax returns. Therefore, an estimate of the cost of allowing VAT registered, self-employed persons to reclaim VAT on petrol purchased for business purposes is not available.

Drainage Schemes Status

Ceisteanna (185)

James Browne

Ceist:

185. Deputy James Browne asked the Minister for Public Expenditure and Reform if funding for a scheme (details supplied) is ringfenced; and if he will make a statement on the matter. [29240/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Public)

The River Slaney (Enniscorthy) Flood Relief Scheme is at an advanced stage of planning and design. The proposed scheme was on formal Exhibition to the public from May, 17th to June 18th 2019 and this was well attended. The next steps are to finalise the design having regard, as appropriate, to the observations received from the public Exhibition and then to submit all required documentation to the Minister for Public Expenditure and Reform, requesting formal confirmation of the scheme under the Arterial Drainage Act.

The proposed scheme will be funded by the Office of Public Works (OPW) and provision for the cost of the scheme is included in the OPW's multi-annual capital budget framework.

Garda Station Refurbishment

Ceisteanna (186)

Thomas P. Broughan

Ceist:

186. Deputy Thomas P. Broughan asked the Minister for Public Expenditure and Reform if funding will be provided for the replacement of windows at a Garda station (details supplied); when this work will commence; and if he will make a statement on the matter. [29352/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Public)

The Office of Public Works is responsible for the maintenance of the Government Estate including the Garda Stations throughout the country .

The Office of Public Works has not been made aware of any problems with the windows at Howth Garda Station and replacement of the windows was not identified as a priority in the 2019 work schedule. The windows will be assessed in the coming weeks and, depending on the outcome of this assessment, will be considered for inclusion in the 2020 work schedule.

Public Procurement Regulations

Ceisteanna (187)

Anne Rabbitte

Ceist:

187. Deputy Anne Rabbitte asked the Minister for Public Expenditure and Reform his plans to change the minimum threshold of €25,000 to €100,000 for educational institutions required to go to national tender for projects; and if he will make a statement on the matter. [30042/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Public)

Public Procurement is governed by WTO, EU and National rules and guidelines. The aim of these rules is to promote an open, competitive and non-discriminatory public procurement regime which delivers best value for money.  

WTO rules and EU Directives on public procurement require that public works, supplies and service contracts above certain thresholds must be advertised on the Official Journal of the EU and awarded on the basis of objective and non-restrictive criteria. For works contracts, the threshold is €5,548,000; for supplies and service contracts awarded by Government Departments, the threshold is €144,000 and for the remainder of public bodies, the threshold is €221,000. The threshold for supplies and service contracts of entities operating in utility sectors (water, energy, transport and postal) is €443,000.  For contracts below these thresholds, the general requirement is that they be advertised on the national public procurement website www.etenders.gov.ie or, depending on value, awarded on the basis of a competitive process of direct invitation to an adequate number of suitable suppliers.  

In addition, the Office of Government Procurement developed Circular 10/14 which is aimed at facilitating small and medium-sized enterprises in competing for public procurement opportunities. In this regard, the following national rules apply to below EU threshold procurements:

- All public contracts for supplies and services with an estimated value of €25,000 (exclusive of VAT) and upwards should be advertised on the national public procurement website, www.etenders.gov.ie.

- The advertising threshold for works is set at €50,000 (exclusive of VAT).

- Suppliers of goods and services and especially the SME sector are encouraged to register on the e-Tenders website and avail of its facilities including receiving automatic alerts in relation to future tendering opportunities.

It is worth noting that these thresholds were reviewed last year in consultation with the SME Advisory Group, chaired by my colleague, Minister of State O'Donovan, which is comprised of representatives from IBEC, SFA, CIF, ISME and Chambers Ireland and it was recommended that the national thresholds remain at the current levels. The main reasons for setting the national thresholds at these levels is to open up public procurement opportunities to small and medium sized enterprises (SMEs) and to achieve value for taxpayer’s money through competitive and transparent tendering processes. It is a basic principle of public procurement that a competitive process should be used.

These thresholds for advertising on eTenders will be kept under review in light of the impact on operational efficiency, value for money and accessibility to business opportunities, particularly the SME sector.

Public Sector Staff Retirements

Ceisteanna (188)

Barry Cowen

Ceist:

188. Deputy Barry Cowen asked the Minister for Public Expenditure and Reform the number of persons who signed up for the interim measure to permit them to work for an extra year prior to the enactment of the Public Service Superannuation (Age of Retirement) Act 2018; and if he will make a statement on the matter. [29081/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Public)

By way of background, on 5 December 2017, the Government made the decision to increase the compulsory retirement age to 70, for public servants recruited prior to 1 April 2004. Primary legislation was necessary in order to bring that change into effect. It was made clear at the time that until such legislation was enacted, the compulsory retirement age of 65, which applied to the vast majority of this cohort, remained in effect and pre-2004 public servants reaching that age would be required to retire.

Interim arrangements were provided for the cohort of public servants who reached their compulsory retirement age of 65 after the Government Decision because, while they would be aware of the Government’s decision, they would be unable to avail of it. Those arrangements permitted these individuals to be rehired post-retirement for a period of 1 year until they reached the age of eligibility for the State Pension (Contributory). Without that specific arrangement, they would have been required to cease working on reaching the age of 65.

The Public Service Superannuation (Age of Retirement) Act 2018 was enacted on 26 December 2018. Under the Act, any relevant public servant who had not already reached their compulsory retirement age of 65 before that date has a new compulsory retirement age of 70. Enactment of the legislation had no effect on those public servants who retired at 65 prior to the 26 December 2018 and who availed of a one year contract under the interim arrangements.  

Section 3 of the 2018 Act also provides that I, as Minister for Public Expenditure and Reform, within three months of the passing of the Act, would prepare and lay before the Oireachtas a report on the public servants who were forced to retire between 6 December 2017 and the commencement of the Act, due to reaching the age of 65 years, and on potential remedies to assist this cohort of worker. This Report was laid before the Oireachtas on 26 March 2019 and is publicly available on the www.gov.ie website and in the Oireachtas Library online catalogue. A total of approximately 1,928 public servants are included in the ambit of the report; approximately 646 of whom availed of the interim arrangements.  

Having considered all of the issues outlined in the Report, I am satisfied that the interim arrangements  were an appropriate temporary policy response at the time of the Government Decision, pending enactment of the legislation. The terms of those arrangements were clear, unambiguous and made known to those who availed of them. Accordingly, for the reasons set out in the report, I decided not to make any changes to those terms.

The contract terms for the interim cohort continue to apply and they cease working when they reach the age of 66, as previously provided.  

Flood Prevention Measures

Ceisteanna (189)

Brendan Ryan

Ceist:

189. Deputy Brendan Ryan asked the Minister for Public Expenditure and Reform further to Parliamentary Question No. 223 of 21 May 2019, the number of tenders received in relation to the further study of flooding in the area by the closing date of 27 June 2019; when a contractor is likely to be chosen for the project; when work will commence and finish; and if he will make a statement on the matter. [29254/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Public)

I am advised by Kildare County Council that the closing date for receipt of tenders was the 27th June 2019 and these will be assessed and evaluated over the coming days. The Council envisage that the study of flood risk in the Hazelhatch area will be completed by the end of 2019.