Tax Yield

Ceisteanna (131)

Joan Burton

Ceist:

131. Deputy Joan Burton asked the Minister for Finance the yield to date in 2019 from the employer PAYE compliance measures announced as part of budget 2019; and if he will make a statement on the matter. [30295/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

In each Budget since Budget 2016, I have introduced a series of ‘compliance measures’ among the taxation policy changes. These are specific Revenue programmes or initiatives aimed at raising tax collection through enhanced taxpayer compliance. In each year I have also assigned additional resources to Revenue to help them to deliver these measures.

The Budget 2016 compliance measures were projected to yield an additional €75 million to the Exchequer. Revenue analysis indicates that the target of €75 million was exceeded. Conservative estimates show the measures in total yielded between €120 million and €150 million. Revenue’s analysis is published at https://www.revenue.ie/en/corporate/documents/research/budget-2016-compliance-measures.pdf.

Budget 2017 compliance measures were projected to yield an additional €130 million to the Exchequer. Revenue analysis shows the target of €130 million was exceeded. Estimates prepared on a conservative basis indicate the measures may have yielded over €210 million in the year. Revenue’s analysis is published at https://www.revenue.ie/en/corporate/documents/research/budget-2017-compliance-measures.pdf.

Budget 2018 included further compliance measures projected to yield an additional €100 million to the Exchequer. This included an additional €50 million from employer compliance projects in preparation for PAYE Modernisation. I am advised by Revenue that analysis of Budget 2018 measures is currently underway and will be published in October. PAYE Income Tax receipts in 2018 were €14.5 billion, €235 million ahead of target. I am advised that Revenue’s preliminary analysis suggests employer compliance programmes have contributed to this surplus and it is likely from the evidence reviewed so far that the €50 million target has been exceeded.

Budget 2019 includes compliance measures of €50 million from employer PAYE compliance initiatives following the new real-time arrangements (PAYE Modernisation) becoming operational from 1 January 2019. While it is too early to assess the projection, as it reflects a target for the whole year, I am confident based on previous years’ experience that it will be achieved.

General Government Debt

Ceisteanna (132)

Joan Burton

Ceist:

132. Deputy Joan Burton asked the Minister for Finance the estimated Exchequer borrowing requirement for 2019; the requirement in 2018; the projected borrowing requirement for 2020; and if he will make a statement on the matter. [30297/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I can advise the Deputy that the Exchequer recorded a surplus in 2018 of €0.1 billion, the first underlying surplus achieved since 2006 assisted inter alia by a strong corporation tax performance.

Turning to this year, the projected borrowing requirement is -€2.1 billion with the continued expansion of the National Development Plan; the refinancing of Irish Water's commercial loans with more competitively priced State funded debt and a projected €0.5 billion payment to the Rainy Day Fund contributing to this deterioration in the Exchequer position. For 2020 it is projected that an Exchequer surplus of €0.4 billion will be recorded, with an expected contribution from NAMA helping to boost the cash position.

Further detail on the Exchequer balance, including projections to 2024, are available in the Summer Economic Statement 2019 as set out in table 3 therein.

General Government Debt

Ceisteanna (133)

Joan Burton

Ceist:

133. Deputy Joan Burton asked the Minister for Finance the gross and net General Government Debt for 2018; the projected end-of-year amounts for 2019 and 2020; the Exchequer cash and other assets including ISIF cash and non-equity investments and the other cash and assets held by source; the amounts as a percentage of GDP and GNI; if the information will be provided in tabular form; and if he will make a statement on the matter. [30298/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

As previously stated, my Department does not publish GNI forecasts, it does, however, publish forecasts in respect of nominal GDP and GNI*. Gross and net debt as a percentage of each of these variables are set out in the following table..

It should be noted that for 2018, figures are based on finalised CSO outturns for GDP. However, the CSO has not published finalised figures in respect of GNI*, therefore for 2018 projected GNI* as set out in the Stability Programme Update (SPU) 2019 is applied for the purpose of responding to this question. Furthermore, 2019 and 2020 figures are anchored to the official fiscal forecasts set out in the SPU 2019.

Exchequer cash and other assets, Ireland Strategic Investment Fund (ISIF) cash and non-equity investments and other cash and assets held by general government are combined as Excessive Debt Procedure (EDP) debt instruments assets below as the level of granularity of each is unavailable for forecasts.

2018

2019

2020

A1

Gross General Government Debt (billions)

206.2

205.1

196.7

A2

Gross General Government Debt % of GDP

64.8

61.1

55.8

A3

Gross General Government Debt % of GNI*

107.3

101.7

93.0

B1

EDP debt instrument assets (billions)

28.6

27.8

19.3

B2

EDP debt instrument assets % of GDP

9.0

8.3

5.5

B3

EDP debt instrument assets % of GNI*

14.9

13.8

9.1

C1=A1-B1

Net General Government Debt (billions)

177.6

177.3

177.4

C2=A2-B2

Net General Government Debt % of GDP

55.8

52.8

50.3

C3=A3-B3

Net General Government Debt % of GNI*

92.4

87.9

83.9

Budget Timetable

Ceisteanna (134)

Joan Burton

Ceist:

134. Deputy Joan Burton asked the Minister for Finance the procedure for delaying the budget beyond 8 October 2019 if required; the legal requirements under Irish and EU law to ensure a budget is published and passed; the specific dates in this regard; if it is permissible to delay the announcement of the budget for 2020 beyond 31 October 2019; and if he will make a statement on the matter. [30299/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

As a member of the European Union, Ireland is subject to the Stability and Growth Pact (SGP). As part of the SGP, the so-called ‘two-pack’ Regulations were introduced in 2013. This included Regulation (EU) No. 473/2013 on ‘common provisions for monitoring and assessing draft budgetary plans and ensuring the correction of excessive deficit of the Member States in the euro area’. In particular, Article 4 relates to a ‘common budgetary timeline’ and requires that “the draft budget for the forthcoming year for the central government and the main parameters of the draft budgets for all the other subsectors of the general government shall be made public annually not later than 15 October”.

As a European Regulation, the legislation became directly effective in Ireland from the date of it's adoption, on 21 May 2013. Thus, the legal requirement under both Irish and EU law that requires us to publish our budget by 15th October every year has it's basis in the same European Regulation. There are no legal grounds, however, to delay the announcement of the annual budget beyond the 15 October.

In terms of the specific enactment of the actual budgetary measures, Article 4 of the above mentioned Regulation further provides that the “budget for the central government shall be adopted or fixed upon and made public annually not later than 31 December”.

In line with the requirements of the Regulation, last month the Government agreed that Budget 2020 will take place on Tuesday 8 October 2019. This allows for the budgetary measures to be presented and debated in the Oireachtas, in advance of the formal transmission to the European Commission of the Draft Budgetary Plan, by 15 October 2019.

State Assets

Ceisteanna (135, 136)

Joan Burton

Ceist:

135. Deputy Joan Burton asked the Minister for Finance the amount of Exchequer cash and liquid assets currently on hand; the reason for such a large amount; the carrying cost of this for 2019; the amount of debt and bonds to be refinanced or paid in 2019; the amount of debt raised in 2019 to date by the NTMA; the amount expected to be raised in the rest of 2019; and if he will make a statement on the matter. [30302/19]

Amharc ar fhreagra

Joan Burton

Ceist:

136. Deputy Joan Burton asked the Minister for Finance if the State is carrying large cash reserves in the event of a hard Brexit; and if he will make a statement on the matter. [30304/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 135 and 136 together.

I am advised by the National Treasury Management Agency (NTMA) that the Exchequer cash/liquid asset balances were just over €25 billion at end-June 2019.

It is important to give some context to this large balance.

The NTMA is continuing with its strategy of pre-funding to meet future redemptions. It adopts a prudent approach to the Exchequer’s funding requirement which gives it confidence that it can meet the Exchequer’s funding needs, irrespective of the risks – such as Brexit – that might emerge.

The NTMA issued €10.4 billion of benchmark bonds in the first half of the year. This means that almost 75% of the minimum of the €14-€18 billion 2019 bond funding range has already been completed. This issuance had a weighted average yield of just below 1.2% and a weighted average maturity of 18.5 years. There is a bond auction of €1 billion scheduled for tomorrow, 11 July and a further auction planned for September. The NTMA also raised €0.3 billion earlier this year through the issue of an inflation linked bond, bringing total medium and long-term issuance so far this year to close to €11 billion.

Over the next 15 months there are three Government bond maturities totalling €23 billion. Over that same period five tranches of the UK bilateral loan will mature. This brings total medium and long-term debt maturities to over €25 billion in that time.

It is important to note that increased activity in short-term markets means that over half of the current cash balance is funded from short-term debt; some of which will be repaid before year-end.

The NTMA has already repaid one bond this year – €7.1 billion in June – and there is a second bond maturity of €6 billion in October. The first tranche of the UK bilateral loan matured in April and two more tranches will mature before year-end; one this month and one in September. Each maturity amounts to £0.4 billion.

The cost of holding cash balances has been mitigated by the favourable interest rate environment which has allowed the NTMA to issue short-term debt at negative interest rates. The estimated cost of the portion of the cash funded from medium to long-term bond issuance is approximately €1 million per month per €1 billion of borrowing.

The NTMA have advised me that the cash balances will decline in the coming months such that it expects to hold approximately €13 billion at year-end.

Tax Credits

Ceisteanna (137, 138, 139, 140, 141, 142, 143)

Joan Burton

Ceist:

137. Deputy Joan Burton asked the Minister for Finance the value of payable refundable research and development tax credits paid out by the Revenue Commissioners in each year since 2009 to 2018 to companies that did not pay corporation tax in each year; the estimated refunds or payable amounts to be paid out in 2018 and to date in 2019; the cost of the tax credit in each of those years; and if he will make a statement on the matter. [30305/19]

Amharc ar fhreagra

Joan Burton

Ceist:

138. Deputy Joan Burton asked the Minister for Finance the number of companies that claimed payable refundable research and development tax credits in each year since 2009 to date; the highest refund paid out in each year in tabular form; the average value of a refund in each year; and if he will make a statement on the matter. [30306/19]

Amharc ar fhreagra

Joan Burton

Ceist:

139. Deputy Joan Burton asked the Minister for Finance the projected savings in 2019 and 2020, respectively, if the research and development tax credit was no longer refundable or payable; and if he will make a statement on the matter. [30307/19]

Amharc ar fhreagra

Joan Burton

Ceist:

140. Deputy Joan Burton asked the Minister for Finance the outstanding liability to the State from refundable payable research and development credits; and if he will make a statement on the matter. [30308/19]

Amharc ar fhreagra

Joan Burton

Ceist:

141. Deputy Joan Burton asked the Minister for Finance the number of persons in each year since it was introduced who have had their personal income tax bill reduced through the use of the research and development tax credit; the average amount by which income tax bills were reduced in each year; the highest amount in each year; and if he will make a statement on the matter. [30309/19]

Amharc ar fhreagra

Joan Burton

Ceist:

142. Deputy Joan Burton asked the Minister for Finance the companies that have benefitted from payable refundable research and development tax credits and not paid corporation tax in that year; and if he will make a statement on the matter. [30310/19]

Amharc ar fhreagra

Joan Burton

Ceist:

143. Deputy Joan Burton asked the Minister for Finance the reason no supporting document in respect of qualifying research and development activity is required at the point of filing the CT1 form when claiming such repayable tax credits; and if he will make a statement on the matter. [30311/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 137 to 143, inclusive, together.

I am advised by Revenue that detailed statistical information in respect of the Research & Development (R&D) credit is available at https://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/r-and-d-tax-credits.aspx for 2012 to 2017 (earlier years are not readily available and estimates of refunds for future years are not prepared).

Regarding Questions 30305/19, 30306/19 and 30310/19, the published statistics include the cost of repayable tax credits (page 3). Where there is no Corporation Tax liability in a given year, a company may claim to have the credit paid to them in 3 instalments over a period of 33 months. The following table shows the number of companies and the average refund amount. Due to Revenue’s obligation to observe confidentiality for taxpayer information, it is not possible to show the highest refund.

Year

Number of Companies

Average Refund

2012

1,067

127,900

2013

1,092

215,650

2014

1,067

305,400

2015

1,027

349,450

2016

1,025

230,480

2017

1,025

147,800

Regarding Questions 30307/19 and 30308/19, it is not possible to accurately estimate the savings if the R&D tax credit was no longer payable, which would require an estimate of the outstanding liability to the State from refundable payable research and development credits, as information in respect of either the outstanding current liability or future expenditure is not available from tax returns. However, on the basis of claims from the 2017 tax returns, it is tentatively estimated that the full year gain from abolishing the refundable credits aspect of the R&D tax credit could be in the region of €150m.

Regarding Question 30309/19, information in respect of relief for key employees engaged in research and development activities is available on the tax returns for the years 2013 to 2017. Tax returns for later years are not yet available. The number of individuals claiming the relief for the years 2013, 2015 and 2017 was less than 10 in each of these years, with a cost in each year of less than €0.05 million. For 2014 there were 25 individuals with an average claim of €2,721. For 2016 there were 11 individuals with average claim of €4,438 The highest claim cannot be provided due to Revenue’s need to protect taxpayer confidentiality.

Finally regarding question 30311/19, I am advised by Revenue that companies currently claim the R&D tax credit when making their self-assessed tax return. Accordingly, there is no need for them to provide supporting documentation at the point of claim.

Revenue carries out a programme of targeted risk driven compliance interventions on self-assessment tax returns. Claims for the R&D tax credit fall within the scope and is one area of focus for this programme. Revenue is of the view that this is the most effective way for them to ensure that only valid claims for the research and development credit qualify as repayable tax credits.