Human Rights

Ceisteanna (125)

Niall Collins

Ceist:

125. Deputy Niall Collins asked the Tánaiste and Minister for Foreign Affairs and Trade the status of the national plan on business and human rights; the progress made to date; the number of times the implementation group met since it was convened; and if he will make a statement on the matter. [39483/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Foreign)

The National Plan on Business and Human Rights was launched in November 2017 on foot of the Government's commitment to give effect to the United Nations Guiding Principles on Business and Human Rights.  The principal objective of the Plan is to promote responsible business practice at home and overseas by all Irish business enterprises. Ireland is now one of only 22 countries worldwide that have adopted national action plans on Business and Human Rights.

A key action identified was the establishment of the Business and Human Rights Implementation Group to monitor delivery of the National Plan.   The Implementation Group, established in December 2018, is mandated to meet at least twice per year. I was pleased to be able to participate in the inaugural meeting of the Group on 16 January 2019.  The Group is chaired by Ms Breege O'Donoghue and brings together representatives of 23 organisations, from Government Departments and State Agencies, the business sector and civil society.  The Implementation Group went on to hold its first working meeting on 3 April 2019 and is scheduled to meet again in October. 

A second commitment of the National Plan was a comprehensive baseline assessment of the legislative and regulatory framework for business and human rights in Ireland. My Department commissioned independent consultants to carry out this research in 2018, the final report of which is available on the Department of Foreign Affairs and Trade’s website. At its meeting in April the Implementation Group considered the findings of the baseline assessment and the establishment of three sub-groups, each tasked with prioritising and delivering key actions under the three pillars of the UN Guiding Principles, namely, the state duty to protect, corporate responsibility to respect and access to remedy.

Passport Applications Administration

Ceisteanna (126)

John Brady

Ceist:

126. Deputy John Brady asked the Tánaiste and Minister for Foreign Affairs and Trade if his Department sought and received legal advice before removing the requirement of the public services card by the Passport Office; and if he will make a statement on the matter. [39837/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Foreign)

My Department has engaged with the Office of the Attorney General in relation to the Public Service Card (PSC) on a number of occasions, including in the context of the Data Protection Commission’s report on the PSC. As the Deputy will be aware, such legal advice is confidential. I am satisfied that the requirements of my Department in relation to proof of identity have at all times been in accordance with the requirements of data protection legislation

Upholding the integrity of the Irish passport is a key commitment of the Passport Service. The Passport Service believes that the presentation of the PSC is an important means of identity verification for applicants, particularly adult applicants making first time applications.  

The Passport Service will continue to accept a copy of an applicant’s PSC as valid identification for first time adult applications and other applicable categories of application.

In circumstances where the applicant does not present their PSC, an application can proceed if an applicant either presents original Government-issued photographic identification, such as a driver’s licence or a passport from another country, or attends for interview in person at the Passport Offices in Cork or Dublin.

Capital Expenditure Programme

Ceisteanna (127)

Michael McGrath

Ceist:

127. Deputy Michael McGrath asked the Tánaiste and Minister for Foreign Affairs and Trade the final agreed tender price, the date of the tender for the contract and the final overall amount actually paid and the date of the final payment in respect of each capital expenditure project completed since 1 January 2014 by his Department or an agency under the remit of his Department and which ended up costing €10 million or more in tabular form; the reason the final amount paid exceeded the final tender price; the details available in respect of projects in which construction is not complete to date or in which the final settlement account has not been agreed to date; and if he will make a statement on the matter. [39925/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Foreign)

No contracts or tenders for capital construction projects over €10 million have been awarded or completed by the Department of Foreign Affairs and Trade since 2014.  There are no agencies under the aegis of the Department.

Tax Credits

Ceisteanna (128)

Robert Troy

Ceist:

128. Deputy Robert Troy asked the Minister for Finance the reason only 1% of SMEs avail of research and development tax credit; his views on whether this signals the scheme is cumbersome and not user friendly; and his plans to amend the scheme in order to assist SMEs avail of same. [39563/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The research and development (R&D) tax credit provides a 25% tax credit for all qualifying R&D expenditure. To make a claim for the research and development (R&D) tax credit a company enters the amount spent on qualifying research and development (which covers the entire spectrum from pure research to experimental development) in their self-assessed tax return.

Revenue have taken a number of steps have in recent years to assist companies with making claims for the R&D tax credit.

In 2019, Revenue published updated guidance on the operation of the R&D tax credit and the expected level of records to support a research and development tax credit claim, for all companies, which is designed to assist in providing clarity for companies as to Revenue’s view on certain aspects of their claim before submitting a claim.  Following on from the publication of that guidance Revenue have presented at conferences around the country (such as IRDG conferences which are attended by companies, advisors and educators) building awareness of the R&D tax credit and the common issues that arise.

In February 2017, Revenue issued guidance aimed specifically at micro and small companies, to reduce the administrative burden on SMEs while also ensuring that the credit is granted to bona fide R&D activity. The aim of this guidance was to give these smaller companies greater clarity on how they could demonstrate to Revenue that their R&D tax credit claim satisfied the “science test”. Where a company spends €200,000 or less on activities which Enterprise Ireland or other such bodies have looked at and confirmed as R&D, then in most cases Revenue will accept that those activities pass the science test.

Revenue’s statistical information in respect of the Research & Development (R&D) credit, for all years up to 2017, is available at the following link https://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/index.aspx

It may be of interest to the Deputy that out of a total of 1,505 claimant companies, 88% of the number of claims in 2017 (1,325 claims out of 1,505) were made by companies dealt with outside Revenue's Large Cases Division, which can be used as a proxy for SMEs.

In general, any amendments to tax measures are considered as part of the annual Budgetary and Finance Bill process. As is normal, the Deputy will appreciate that I cannot comment on any possible changes in advance of the 2020 Budget.

Tax Reliefs Costs

Ceisteanna (129, 141, 152)

Michael Healy-Rae

Ceist:

129. Deputy Michael Healy-Rae asked the Minister for Finance if he will address a matter (details supplied) regarding the capital gains tax; and if he will make a statement on the matter. [39806/19]

Amharc ar fhreagra

Robert Troy

Ceist:

141. Deputy Robert Troy asked the Minister for Finance the estimated first and full-year cost of a proposal by an organisation (details supplied). [39653/19]

Amharc ar fhreagra

Martin Heydon

Ceist:

152. Deputy Martin Heydon asked the Minister for Finance if an analysis has been carried out regarding the impact of the differential between entrepreneurial relief here and the UK; the estimated cost to bring Ireland in line with the UK level; and if he will make a statement on the matter. [39958/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 129, 141 and 152 together.

I assume the Deputies' questions refer to the revised Entrepreneur Relief provided for in Section 597AA of the Taxes Consolidation Act 1997.

In general, consideration of any changes to the tax system in advance of Budget 2020 are undertaken within the annual Budgetary and Finance Bill process. The Deputies will therefore appreciate that I cannot therefore comment on any possible changes at this time.

Regarding Question No. 141, I am advised by Revenue that information is not available in tax returns in respect of holding periods of shares or of the dividends received by those in receipt of the Entrepreneur Relief. Therefore, it is not possible to accurately estimate the cost of the proposals.

Regarding question 39806/19, I am advised by Revenue that capital gains tax (CGT) entrepreneur relief applies to an individual who disposes of qualifying assets which have been owned by that individual for a continuous period of at least 3 years in the 5-year period immediately prior to the disposal of the assets. The rate of CGT on such disposals is 10%.

To qualify for CGT entrepreneur relief, the qualifying assets must have been used for the purposes of a qualifying business carried on by the individual disposing of the assets. Land which has been leased by an individual to a long-term tenant would not, therefore, qualify for the relief as it will not have been used for the purposes of a business carried on by the individual concerned.

Regarding Question No. 152, it is assumed that the Deputy is referring to the higher lifetime CGT limit in the UK which applies to their Entrepreneur Relief scheme. I am advised by the Revenue Commissioners that latest estimates suggest that the cost of increasing the lifetime limit to €10 million, in the absence of any behavioural changes would have a full year cost of €81 million.

The Department of Finance produces a TSG paper annually on Capital Taxes. This year's Capital Taxes TSG paper, which can be found at https://assets.gov.ie/19127/bf33c368730e4dc58cc7c7930c9b8487.pdf provides useful information which may be of interest to the Deputies.

Tax Code

Ceisteanna (130)

Michael Healy-Rae

Ceist:

130. Deputy Michael Healy-Rae asked the Minister for Finance if he will address a matter (details supplied) regarding general practitioner infrastructure; and if he will make a statement on the matter. [39811/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

My Department has in place published guidelines for the evaluation of potential tax expenditures in October 2014 (http://budget.gov.ie/Budgets/2015/Documents/Tax_Expenditures_Oct14.pdf).  Drawing on economic evidence, these make clear that it is important that any policy proposal which involves tax expenditures should only occur in limited circumstances where there are demonstrable market failures and where a tax-based incentive is more efficient than a direct expenditure intervention.  

An examination from a tax policy perspective of the issues mentioned by the Deputy in current circumstances has yet to be carried out by my Department.

Departmental Policy Functions

Ceisteanna (131)

Bernard Durkan

Ceist:

131. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which the fundamentals in regard to debt borrowing and prudent economics remain an essential part the policy of his Department; and if he will make a statement on the matter. [39964/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The public finances continue to improve with a general government surplus recorded last year for the first time since 2007. At the same time, the strong economic performance in recent years has also seen the debt-to-income ratio fall significantly. Balancing the books is a meaningful signal of an economy moving into a more mature, sustainable phase.

That said, despite the very significant progress that has been made by this Government, at 104 per cent of GNI*, debt levels remain high by both historical and international standards. Indeed, on a per capita basis, public indebtedness stood at €42,500 per person last year, amongst the highest in the OECD. Similarly, servicing of debt represents a significant operating cost for the State, with last year’s annual payment close to the entire capital budget for 2018. These figures illustrate why fiscal sustainability remains a key priority for this Government, especially in view of the highly uncertain international environment, including the impact of Brexit, and less favourable demographics in the coming decades as the population ages. 

In light of these risks, a responsible approach to managing the public finances is required. To that end, my Department recently published the Annual Report on Public Debt in Ireland 2019. This report provided in-depth analysis of current and future debt dynamics. The evidence provided in this report clearly illustrates the importance of continuing to reduce the public debt burden, while at the same time undertaking investment and structural reforms that boost domestic employment and income levels, as these can impact favourably on the burden of debt.

Commission on Taxation Report

Ceisteanna (132)

Michael McGrath

Ceist:

132. Deputy Michael McGrath asked the Minister for Finance the cost of establishing and running the last Commission on Taxation; and if he will make a statement on the matter. [39333/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Commission on Taxation was established by the then Minister for Finance on 14 February 2008. The terms of reference of the Commission were quite broad. It was asked in the context of maintaining an equitable incidence of taxation and a strong economy, to consider the structure of the taxation system and specifically to:

- Consider how best the tax system can support economic activity and promote increased employment and prosperity while providing the resources necessary to meet the cost of public services and other Government outlays in the medium and longer term

- Consider how best the tax system can encourage long term savings to meet the needs of retirement

- Examine the balance achieved between taxes collected on income, capital and spending

- Review all tax expenditures with a view to assessing the economic and social benefits they deliver and to recommend the discontinuation of those that are unjustifiable on cost/benefit grounds

- Consider options for the future financing of local government, and

- Investigate fiscal measures to protect and enhance the environment including the introduction of a carbon tax.

The Commission concluded its work with the publication of a comprehensive report on 7 September 2009. The records for the relevant business unit in the Department at the time show a total expenditure of just over €833,000. This does not include the staff or accommodation costs of the officials assigned to work in the Secretariat of the Commission.

Insurance Compensation Fund

Ceisteanna (133)

Jack Chambers

Ceist:

133. Deputy Jack Chambers asked the Minister for Finance further to Parliamentary Question No. 82 of 28 February 2018, the status of efforts to ensure third-party claimants of a company are compensated in full; the status of the case of a person (details supplied); and if he will make a statement on the matter. [39336/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

Setanta Insurance ("Setanta") was placed into liquidation by the Malta Financial Services Authority on 30 April 2014.  As it was a Maltese incorporated company, the liquidation is being carried out under Maltese law.

I am very conscious of the effect of the delays in the payment of compensation to Setanta claimants, and this is one of the reasons why we brought forward the Insurance (Amendment) Act last year to ensure that Setanta third party claimants are compensated in full, and to put in place revised arrangements for the ongoing management and administration of the Insurance Compensation Fund, including for applications to the High Court.  However as previously outlined neither I nor the Department of Finance have any role in the process including the making of applications to the High Court or payments.

To date, 796 personal injury claimants have been compensated in full by the Compensation Fund. There are a further 297 personal injury claimants who have yet to settle their claims. I have been informed by the State Claims Agency that a further 92 personal injury claims settlements have now been agreed and are included in the current submission to the Fund. This brings the total number of personal injury claimants who have agreed settlements to 888.  In addition to the settled cases submitted to the Fund there have also been 21 cases where the claims were either dismissed or withdrawn and consequently there will be no draw on the Fund in respect of these claimants. The latest information from the liquidator indicates that the total value of all payments (settlements, legal costs, etc.) in the next tranche will be approximately €6.9 million.

Regarding when the next payments will be made, the Deputy will note that in accordance with the relevant legislation, there are certain steps to be completed in preparing any application to the High Court for payment from the ICF. These steps include the assessment and verification of each individual claim within the application by the State Claims Agency.  The Agency has advised my officials that the next application for a call on the fund for Setanta claims will likely be in the 2nd half of October 2019.

In relation Deputy Chamber’s request for an update on a particular case, my officials have checked this matter with the State Claims Agency and they have indicated that there is no claim outstanding, but that there is a refund of premiums due. They indicated that while  the refund of premiums for commercial and personal insurance policies is not covered by the Insurance Compensation fund, there is a possibility that a portion of any such refund due, may be met from the proceeds of the distribution of Setanta's Insurance assets on completion of the liquidation process.

Finally, the Liquidator continues to make every effort to settle these claims on the best possible terms, however, each and every one of these claimants are in the litigation process and consequently it is difficult to predict exactly when all of these claimants will settle. This in turn means it is not possible to say at this stage when it will be known whether there will be any money available to make any refund of premiums.  Consequently, any individual (or their solicitor) who has queries about either an outstanding claim or a refund of premiums  should contact the liquidator via phone at +353 (0)818 255 255 or via email at iesetanta@deloitte.ie.

Brexit Issues

Ceisteanna (134)

Declan Breathnach

Ceist:

134. Deputy Declan Breathnach asked the Minister for Finance if his attention has been drawn to the fact that due to differences in tax policies on both sides of the Border, a truckload of coal is €2,217 more expensive here than in Northern Ireland; if his attention has been further drawn to the fact that this price differential will increase further post-Brexit; the actions being taken to prevent smuggling of solid fuel across the Border; and if he will make a statement on the matter. [39408/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am assuming that the Deputy, when referring to solid fuel smuggling, is enquiring about the movement of solid fuel into the State from Northern Ireland in the context of Solid Fuel Carbon Tax (SFCT). SFCT is an excise duty that applies to coal and peat when first supplied in the State for use as a fuel. Neither the movement of solid fuel into the State nor the physical presence of solid fuel in the State generate a liability to SFCT. Therefore, there is no smuggling offence, in terms of evasion of SFCT, attaching to coal coming into the State from Northern Ireland.

European Union Single Market constraints preclude the use of any cross-border controls in relation to the movement of solid fuel into the State from other Member States. Therefore, Revenue has no authority to stop vehicles and physically inspect loads of solid fuel entering the State from Northern Ireland. Similarly, the transportation 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. 

In the event of a no-deal Brexit, the UK will be come a third country and will be outside of the EU’s Single Market and Customs Union.  Any imports of products from a third country, including the UK, will be subject to EU customs requirements.  The exact implications of this for trade and customs compliance between Ireland and Northern Ireland are currently the subject of discussions with the EU Commission.

Currently in Northern Ireland, there is no carbon tax on coal and solid fuel environmental standards are lower than in the State. These factors combined with currency fluctuations and Northern Ireland’s lower VAT rate on solid fuel can give rise to significant price differentials between the two jurisdictions.

As I and my predecessor have pointed out before, the regulatory regime covering the marketing, sale, distribution and burning of solid fuels in the State 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 coal that does not meet these standards. 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 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 explore the scope for follow up action by Revenue in relation to persons found to be in breach of environmental regulations.

Customs and Excise Controls

Ceisteanna (135)

Declan Breathnach

Ceist:

135. Deputy Declan Breathnach asked the Minister for Finance the measures being taken to monitor goods entering the State across the Border after the UK leaves the EU; if extra customs staff are being deployed for this purpose; if new offices of the Revenue Commissioners are being established along the Border; and if he will make a statement on the matter. [39417/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Government has been clear that it is determined in the context of Brexit, deal or 'no deal', to avoid a hard border on the island of Ireland.

The Deputy will be aware that given the approaching Brexit deadline, intensive discussions are taking place involving the Government, the EU Commission and our EU partners as to how we can meet the shared twin objectives of protecting the Single Market and Ireland’s place in it, to avoid physical infrastructure at the border. Revenue is providing the necessary technical expertise and assistance to facilitate those discussions.

In preparation for Brexit, Revenue has been recruiting additional staff across a range of grades and is confident that the full additional resource of 600 will be in place by 31 October. I am advised by Revenue that these staff are being recruited and deployed for the purposes of facilitating and supporting legitimate trade post-Brexit.

Revenue already implements a comprehensive risk-based intervention programme to identify, target and disrupt all forms of cross-border smuggling and criminality. Revenue’s priority focus on such activity will continue to be the case regardless of the eventual outcome of Brexit. I am assured that Revenue will continue to adjust its recruitment, training and deployment plans in response to business needs, including Brexit-related developments and will deploy resources to quickly confront any risks as they emerge. I remain open to consider any request from Revenue for additional resources, if required.

Disabled Drivers and Passengers Scheme

Ceisteanna (136)

Declan Breathnach

Ceist:

136. Deputy Declan Breathnach asked the Minister for Finance his plans to amend the criteria under the disabled drivers and disabled passengers scheme to qualify for a primary medical certificate; if his attention has been drawn to the fact that a large number of disabled drivers are at a severe disadvantage by not meeting the strict criteria as currently set out; and if he will make a statement on the matter. [39476/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Disabled Drivers and Disabled Passengers (Tax Concessions) Scheme provides relief from VAT and VRT (up to a certain limit) on the purchase of an adapted car for transport of a person with specific severe and permanent physical disabilities, payment of a Fuel Grant, and an exemption from Motor Tax. 

To qualify for the Scheme an applicant must be in possession of a Primary Medical Certificate. To qualify for a Primary Medical Certificate, an applicant must satisfy one of the following conditions:

- be wholly or almost wholly without the use of both legs;

- be wholly without the use of one leg and almost wholly without the use of the other leg such that the applicant is severely restricted as to movement of the lower limbs;

- be without both hands or without both arms;

- be without one or both legs;

- be wholly or almost wholly without the use of both hands or arms and wholly or almost wholly without the use of one leg;

- have the medical condition of dwarfism and have serious difficulties of movement of the lower limbs.

The Scheme represents a significant tax expenditure. Between the Vehicle Registration Tax and VAT foregone, and the fuel grant, the scheme cost €65m in each of 2016 and 2017, rising to €70m in 2018. This figure does not include the revenue foregone in respect of the relief from Motor Tax provided to members of the Scheme.  

I understand and sympathise with any person who suffers from a serious physical disability and can’t access the scheme under the current criteria. However, given the scope and scale of the scheme, any possible changes to it can only be made after careful consideration, taking into account the existing and prospective cost of the scheme as well as the availability of other schemes which seek to help with the mobility of disabled persons, and the interaction between each of these schemes.  

Accordingly, I have no plans to amend the qualifying medical criteria for the Disabled Drivers and Disabled Passengers Scheme at this time.

Tax Collection

Ceisteanna (137)

Seán Sherlock

Ceist:

137. Deputy Sean Sherlock asked the Minister for Finance if correspondence by him or to him from all Cabinet Ministers, including the Taoiseach, in respect of policy changes on the collection and ringfencing of carbon tax for the purposes of implementing measures on climate adaptation or mitigation, particularly in the housing and transport sectors, will be provided. [39485/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

In advance of the Budget, as Minister for Finance I receive a large number of pre-budget submissions on a wide range of issues.  In addition to written formal submissions, I also have ongoing discussions with my cabinet colleagues around estimates and budgetary issues.

Excise Duties

Ceisteanna (138)

Peadar Tóibín

Ceist:

138. Deputy Peadar Tóibín asked the Minister for Finance the breakdown of taxes that are levied on aviation fuel; and the estimated revenue that would accrue if VAT and excise duty were applied to aviation fuel. [39540/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

Ireland’s excise duty treatment of fuel used for air navigation is based on European law as set out in Directive 2003/96/EC on the taxation of energy products and electricity, commonly known as the Energy Tax Directive. Under this Directive, Member States are obliged to exempt certain fuels used for commercial aviation purposes from excise duty. The scope of this exemption must include jet fuel (which is the most commonly used heavy oil in air navigation) and must encompass such fuel used for intra-Community and international air transport purposes. A Member State may waive this exemption where it has entered into a bilateral agreement with another Member State to tax fuel for intra-community flights. With regard to fuel for international transport, the scope for a Member State to take a unilateral approach to taxation is limited by international law and a range of bilateral and multilateral agreements that operate under 1944 Convention on International Civil Aviation (known as the Chicago Convention).  

VAT is charged on domestic and private usage of jet fuel at the reduced rate of 13.5%, while VAT is charged at the standard rate of 23% on aviation gasoline used for the same purpose.  The supply of aviation fuel for international air travel is zero rated and airline tickets are exempt from VAT throughout the EU.

I am advised that consumption data required to estimate the revenue that could be accrued, if the Excise Duty applied fully to aviation fuel with no exemptions, is not readily available. According to the CSO, the revenue foregone due to the excise exemption on aviation fuel was €494 million in 2016. However, this is a theoretical amount that cannot be realised under the current EU and international legislative framework.       

Finally, I am informed by Revenue that the breakdown of taxes levied on the different types of aviation fuel as provided for under the Finance Act 1999 and Energy Tax Directive are shown in the following table.

Aviation Fuel/Use

Energy Tax Directive

Finance Act 1999

Light oil (aviation gasoline) used for domestic commercial aviation

No mandatory tax exemption, Member States may opt to exempt or partially exempt

Partial relief from MOT, effective rate of €355.44 per 1,000 litres (section 97B Finance Act 1999)

Light oil (aviation gasoline) used for intra-Community/international commercial   aviation

No mandatory tax exemption, Member States may opt to exempt or partially exempt

Partial relief from MOT, effective rate of €355.44 per 1,000 litres (section 97B Finance Act 1999)

Light oil (aviation gasoline) used for private pleasure flying

Mandatory taxation

Full MOT rate of €587.71 per 1,000 litres (section 96 Finance Act 1999)

Heavy oil (jet fuel) used for domestic commercial aviation

No mandatory tax exemption, Member States may opt to exempt or partially exempt

Full exemption (section 100(2)(b) Finance Act 1999)

Heavy oil (jet fuel) used for used for intra-Community/international commercial   aviation

Mandatory tax exemption, except where bilateral arrangement entered into with another Member State

Full exemption (section 100(2)(b) Finance Act 1999)

Heavy oil (jet fuel) used for private pleasure flying

Mandatory taxation

Full MOT rate of €479.02 per 1,000 litres (section 100(2)(b) Finance Act 1999)

Brexit Issues

Ceisteanna (139)

Tony McLoughlin

Ceist:

139. Deputy Tony McLoughlin asked the Minister for Finance if he will consider the importance of the road haulage industry to Ireland, the worrying effects Brexit will have on this industry and the implications of a carbon tax on this industry when considering its introduction in Budget 2020; and if he will make a statement on the matter. [39591/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

As the Deputy will be aware, it is a longstanding practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.

Brexit Issues

Question No. 141 answered with Question No. 129.

Ceisteanna (140)

Micheál Martin

Ceist:

140. Deputy Micheál Martin asked the Minister for Finance if policy notes recently released under freedom of information regarding memos in his Department in relation to the rainy day fund and its uses being specifically for force majeure events and not being utilised as a Brexit mitigant is policy; and if he will make a statement on the matter. [39596/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The briefing notes in question were drafted both before and during the passage of the National Surplus (Reserve Fund for Exceptional Contingencies) Bill through the Oireachtas and so at those times, Government was working to achieve the best Brexit solution, while also preparing for a no-deal scenario.  The Government's preparations included the Brexit Omnibus Act, which was signed into law by the President on 17 March 2019. 

The Act to establish the Rainy Day Fund was subsequently signed into law by the President on 26 June 2019.  Section 9 of the Act, provides for the Minister for Finance of the day to propose a resolution to Dáil Éireann for a drawdown from the Fund to “remedy or mitigate the occurrence in the State of exceptional circumstances”.

Under the Fiscal Responsibility Act 2012, “exceptional circumstances” are defined as either a period of severe economic downturn or a period during which an unusual event outside the control of the State has a major impact on the financial position of the general government.

The Fund is intended, therefore, to be used as a defined-purpose instrument to address severe events, as opposed to the normal fluctuations within the economic cycle. This approach would align it with the current EU fiscal rules framework, whereby it could be accommodated as an “unusual event” under the existing Stability and Growth Pact provisions. Withdrawals from the Fund will be transferred directly to the Exchequer so as to support the tax shortfalls and/or voted expenditure to address the specific downturn.

The Act deliberately does not describe specific events, such as Brexit or others, so as to give flexibility to Governments to withdraw from the Fund for all severe downturns, many of which are not possible to specify in advance.

It is envisaged that the occurrence of a force majeure event could justify deployment of the Fund. Therefore, I expect a significant fiscal impact and/or an economic downturn arising from a no-deal Brexit would clearly allow for a drawdown from the Rainy Day Fund. 

I should stress that a drawdown from the Rainy Day Fund should not be the first action taken in the face of a no-deal Brexit, as the Government has already taken significant steps to prepare for Brexit and will continue to do so.

These steps to prepare for the fallout of Brexit include dedicated measures, and economic and fiscal policies to get Ireland Brexit ready in Budgets 2017, 2018 and 2019.  Such policies include, amongst others, moving to fiscal balance, the rolling out of support schemes, and the provision of advice to businesses. 

I would, therefore, envisage the National Surplus (Exceptional Contingencies) Reserve Fund only being used for an extreme outcome, i.e. “tail-risks” related to Brexit and in advance of seeking approval to withdraw from the Fund, the magnitude of the impact would have to be properly considered.

My sensible approach to using the Rainy Day Fund is that I want to ensure its funds are available and used to support measures that are timely, targeted and temporary, which assist in converting our economy and its businesses to a post-Brexit world.

Question No. 141 answered with Question No. 129.

Tax Data

Ceisteanna (142)

Robert Troy

Ceist:

142. Deputy Robert Troy asked the Minister for Finance the estimated first and full-year cost of a proposal by an organisation (details supplied). [39654/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am advised by Revenue that information is not available in tax returns in respect of holding periods of shares or of the dividends received by those in receipt of the Entrepreneur Relief. As such, it is not possible for Revenue to provide me with an accurate estimate of the cost of the Deputy's proposal. 

Tax Reliefs Costs

Ceisteanna (143, 144)

Robert Troy

Ceist:

143. Deputy Robert Troy asked the Minister for Finance the estimated first and full-year cost of a proposal by an organisation (details supplied). [39655/19]

Amharc ar fhreagra

Robert Troy

Ceist:

144. Deputy Robert Troy asked the Minister for Finance his views on a proposal by an organisation (details supplied); and the estimated costs which would arise. [39656/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 143 and 144 together.

Regarding Question No. 143, on the basis of claims in respect of research and development tax credit for 2017, the latest year available, the estimated cost of increasing the credit rate from 25% to 30% for SMEs is up to c.€27 million in a full year and c.€16m in the first year. However it is possible that the cost could be lower due to the limits on the payable credit.  This cost does not take account of any possible behavioural change by companies to avail of the increased credit. 

Regarding Question No. 144, on the assumption that all SMEs avail of this proposal, and assuming no behavioural change, I am advised by Revenue that, while the measure would be cost-neutral over the longer term, the first year cost of the measure, based on the cashflow impact to the Exchequer, is likely to be of the order of c.€57 million. This is due to the second and third installments of the repayable credit being paid along with the first installment.