Written Answers Nos. 330-349
331. Deputy Neale Richmond asked the Minister for Finance his views on financial institutions refusing to offer loans to workers whose employers are availing of Covid-19 supports or payments regardless of whether the applicant is receiving such supports; and if he will make a statement on the matter. [16772/21]
Amharc ar fhreagra332. Deputy Neale Richmond asked the Minister for Finance if he has engaged with the Central Bank or individual financial institutions operating in Ireland regarding the reluctance of same to offer loans to persons whose employers are availing of Covid-19 supports; and if he will make a statement on the matter. [16773/21]
Amharc ar fhreagraI propose to take Questions Nos. 331 and 332 together.
Since the COVID-19 situation first arose, I have maintained contact with the BPFI and lenders on the measures they have put in place to assist their customers who are economically impacted by the pandemic. In relation to the particular issue of new mortgage lending, the main retail banks previously confirmed that they are considering mortgage applications and mortgage drawdowns in relation to their customers who are on the Employment Wage Subsidy Scheme on a case by case basis and that they are taking a fair and balanced approach. Lenders continue to process mortgage applications and have supports in place to assist customers impacted by COVID-19. Therefore, if mortgage applicants have any queries or concerns about the impact of COVID-19 on their mortgage application, they should in the first instance contact their lender directly on the matter.
However, there are certain consumer protection requirements which govern the provision of mortgage credit. For example, the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 (CMCAR) provide that, before concluding a mortgage credit agreement, a lender must make a thorough assessment of the consumer’s creditworthiness with a view to verifying the prospect of the consumer being able to meet his or her obligations under the credit agreement. The CMCAR further provide that a lender should only make credit available to a consumer where the result of the creditworthiness assessment indicates that the consumer’s obligations resulting from the credit agreement are likely to be met in the manner required under that agreement. The assessment of creditworthiness must be carried out on the basis of information on the consumer’s income and expenses and other financial and economic circumstances which are necessary, sufficient and proportionate.
In addition, the Central Bank’s Consumer Protection Code 2012 imposes ‘Knowing the Consumer and Suitability’ requirements on lenders. Under these requirements, lenders are required to assess affordability of credit and the suitability of a product or service based on the individual circumstances of each borrower. The Code specifies that the affordability assessment must include consideration of the information gathered on the borrower’s personal circumstances and financial situation. Furthermore, where a lender refuses a mortgage application, the CMCAR requires that the lender must inform the consumer without delay of the refusal. In addition, the Code requires that the lender must clearly outline to the consumer the reasons why the credit was not approved, and provide these reasons on paper if requested.
Within this regulatory framework, the decision to grant or refuse an application for mortgage credit remains a commercial matter for the individual lender. Nevertheless, the Central Bank has indicated that it expects all regulated firms to take a consumer-focused approach and to act in their customers’ best interests at all times, including during the COVID-19 pandemic. If a mortgage applicant is not satisfied with how a regulated firm is dealing with them in relation to an application for credit, or they believe that the regulated firm is not following the requirements of the Central Bank’s codes and regulations or other financial services law, they should make a complaint directly to the regulated firm. If the mortgage applicant is still not satisfied with the response from the regulated firm, he or she can refer the complaint to the statutory Financial Services and Pensions Ombudsman.
333. Deputy Ged Nash asked the Minister for Finance the steps Ireland will take to support the taking forward of the recommendations in the report of the UN High-Level Panel on International Financial Accountability, Transparency and Integrity to tackle illicit finance, including international tax abuse; and if he will make a statement on the matter. [16862/21]
Amharc ar fhreagraI have noted the issues raised in the February 2021 FACTFI Panel Report. Illicit financial flows drain resources from sustainable development, exacerbate inequalities, weaken governance and damage public trust.
The FACTI Panel has made recommendations for tackling illicit financial flows. As a long-standing member of the international Financial Actions Task Force (FATF) and an EU Member State, Ireland adheres to the highest global standards of Anti-Money Laundering/Combating Terrorist Financing - "AML/CFT" - and actively supports and implements measures to combat such activities.
The Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2021, which transposes the 5th AML Directive, was enacted on 18 March 2021 and will be commenced in the coming weeks. While this legislation was advanced by the Department of Justice, my Department is progressing certain matters of relevance to financial services. These include: the establishment of a Register of Beneficial Ownership for trusts; a Register of Beneficial Ownership for bank and payment accounts and safe-deposit boxes; and the introduction of a registration and supervision regime, for AML/CFT purposes, for Virtual Asset Service Providers. The EU and FATF are clear and I agree, that all of these measures are necessary to combat financial crime and illicit financial flows.
Furthermore, the latest FATF Mutual Evaluation Review of Ireland was conducted in 2017 and found that “Ireland has a sound and substantially effective regime to tackle money laundering and terrorist financing”. To ensure active consideration of current and emerging AML/CFT risks in Ireland's financial and non-financial sectors, my Department chairs the Anti-money Laundering Steering Committee, comprised of members from across many Government Departments and agencies, such as An Garda Síochána, the Criminal Assets Bureau, the Office of the Director of Public Prosecutions, and the Revenue Commissioners. Currently, that committee is overseeing the implementation of an Action Plan to further enhance Ireland's AML/CFT framework, in accordance with the recommendations arising from the FATF review. Of 206 actions necessitating the consideration of numerous stakeholders, over half have already been fully addressed. These actions will further strengthen Ireland’s AML/CFT regime and ensure that mitigation measures are in place to protect against illicit financial flows.
International Tax
Aggressive tax planning is a global problem and is best solved by global cooperation. In this context, Ireland engaged constructively in the BEPS process and importantly, we have reformed and modernised our tax code in recent years to effectively address aggressive tax planning. Ireland continues to work constructively with all 139 members of the Inclusive Framework, on an equal footing, to address these issues and build an international tax framework that is fair, robust and sustainable.
334. Deputy Ged Nash asked the Minister for Finance the steps Ireland will take to support the proposal for an immediate commencement to negotiations of a UN tax convention to raise standards of tax transparency and co-operation and to ensure that all countries at all levels of per capita income are included in the benefits of same as outlined in the report of the UN High-Level Panel on International Financial Accountability, Transparency and Integrity. [16863/21]
Amharc ar fhreagra335. Deputy Ged Nash asked the Minister for Finance the steps Ireland will take to support the creation of an intergovernmental body under UN auspices to allow globally inclusive and transparent negotiations over international tax rules as outlined in the report of the UN High-Level Panel on International Financial Accountability, Transparency and Integrity. [16864/21]
Amharc ar fhreagra336. Deputy Ged Nash asked the Minister for Finance the steps Ireland will take to ensure it participates fully in the automatic exchange of financial account information, including by providing information to lower-income countries on a non-reciprocal basis in the first instance, and by publishing information on the aggregate value of accounts on which information is provided and received by the UK under the OECD Common Reporting Standard as outlined in the report of the UN High-Level Panel on International Financial Accountability, Transparency and Integrity; and if he will make a statement on the matter. [16865/21]
Amharc ar fhreagra338. Deputy Ged Nash asked the Minister for Finance the steps Ireland will take to meet the recommendation that all multinational companies should publish country by country reporting data as outlined in the report of the UN High-Level Panel on International Financial Accountability, Transparency and Integrity; and if he will make a statement on the matter. [16867/21]
Amharc ar fhreagraI propose to take Questions Nos. 334 to 336, inclusive, and 338 together.
I note the recent publication of the report by the UN High-Level Panel on International Financial Accountability, Transparency and Integrity. Officials in my Department are currently studying the report’s recommendations.
Ireland is committed to the OECD/G20 Inclusive Framework on BEPS, and is one of the 139 jurisdictions working together on an equal footing to address the tax challenges arising from digitalisation. Ireland has seen the benefits of international cooperation and is committed to the ongoing global discussions to address the tax challenges arising from digitalisation. We are hopeful that a sustainable, robust and growth-friendly agreement will be reached this year which meets the needs of all countries, large and small, developed and developing.
As outlined in the update to Ireland’s Corporation Tax Roadmap published earlier this year Ireland is committed to continue to meet international best practices on exchange of information and support efforts to further enhance information exchange.
Tax transparency is key to ensuring fair and effective taxation and Ireland is fully committed to maintaining the highest international best practice standards developed by the Global Forum on Transparency and Exchange of Information for Tax Purposes. It should be noted that of the 78 jurisdictions reviewed to date by the Global Forum on Transparency and Exchange of Information for Tax Purposes, Ireland is one of only a small number of jurisdictions to have been found to be fully compliant with new international best practice.
Ireland is at the forefront of the further development of the International EOI framework both in the EU and in the OECD and is actively working with other jurisdictions including through the EU Fiscalis Programme and the OECD Forum on Tax Administration.
Ireland has been proactive at the OECD in shaping the Model Rules for Reporting by Platform Operators with respect to Sellers in the Sharing and Gig Economy (MRDP) that were agreed July and will bring the sharing and gig economy within the scope of Automatic Exchange of Information (AEOI). Ireland is also active in shaping proposals at EU level such as our proactive participation in developing the various Directives on Administrative Cooperation. For instance, DAC7 which was adopted last week, will extend the EU tax transparency rules to digital platforms. EU Member States will automatically exchange information on income generated by sellers on digital platforms.
Ireland is fully committed to contributing to the development of new reporting rules for crypto-assets and e-Money to complement the Common Reporting Standard. This will feed into a European Commission proposal in this area (DAC8) which is expected towards the end of 2021 and Ireland looks forward to engaging with our EU partners on this proposal.
Ireland supports transparency and good governance for corporates including “country-by-country” reporting by MNEs to national tax authorities. The Finance Act 2015 introduced obligations for relevant companies to report to the Revenue Commissioners in line with agreements on tax transparency agreed as part of the OECD Base Erosion and Profit Shifting project.
In relation to public country by country reporting, a proposal by the European Commission for a Directive to amend Directive 2013/34/EU (the Accounting Directive) as regards disclosure of income tax information by certain undertakings and branches was recently discussed at COMPET Council. Ireland opposed this proposal as the legal base is not in keeping with the Treaties and that as it relates to tax, it should be the responsibility of Finance Ministers to negotiate at the ECOFIN Council rather than at COMPET Council. Ireland’s principled position is shared by a number of other Member States and indeed the Council Legal Service. Notwithstanding Ireland's stated views regarding the legal basis, this proposal now has the necessary support to proceed from COMPET Council. Ireland is engaging constructively in the negotiations on this proposal.
337. Deputy Ged Nash asked the Minister for Finance the steps Ireland will take to ensure it meets fully the recommendation for public registers of the ultimate beneficial ownership of each type of legal entity that it permits to be established, with the information fully verified as outlined in the report of the UN High-Level Panel on International Financial Accountability, Transparency and Integrity; and if he will make a statement on the matter. [16866/21]
Amharc ar fhreagraAs a long-term member of the international Financial Action Task Force (FATF) and an EU Member State, Ireland adheres to the highest global standards of Anti-money Laundering/Combating Terrorist Financing and fully supports any measures to combat such activities.
The latest FATF Mutual Evaluation Review of Ireland, in relation to the technical compliance and effectiveness of our AML/CFT measures, was conducted in 2017 and found that “Ireland has a sound and substantially effective regime to tackle money laundering and terrorist financing". In addition, the Department of Finance chairs the Government's Anti-money Laundering Steering Committee, membership of which is drawn from throughout multiple Government departments, agencies and public bodies, such as An Garda Siochana, the CAB and the DPP and through which the Department is coordinating the execution of an Action Plan to further enhance Ireland's AML/CFT framework in accordance with the recommendations arising from the FATF review.
I note the recommendations on beneficial ownership outlined in the report of the UN High-Level Panel on International Financial Accountability, Transparency and Integrity and observe that they largely mirror recommendations outlined in the UN sustainable development goals, FATF recommendations and the various EU Directives. Pursuant to the 4th and 5th EU Anti-money Laundering Directives, central beneficial ownership registers relating to companies and other financial vehicles have already been established. Central Registers of the beneficial ownership of trusts and and bank accounts are in the process of being established, via a combination of primary legislation included in the recent Criminal Justice Act which was signed by the President on 18 March this year; and secondary legislation which is currently being drafted. The Act also includes legislation to establish a requirement for virtual asset service providers to register with the Central Bank of Ireland, for AML supervision purposes.
339. Deputy Richard Boyd Barrett asked the Minister for Finance if companies that operated the TWSS can seek to demand payments from their workforce if their employees were marginally better off in their net take home pay as a result of the way in which the scheme operated; and if he will make a statement on the matter. [16889/21]
Amharc ar fhreagraThe Temporary Wage Subsidy (TWSS) was in place between 26 March and 31 August 2020 and was introduced as an emergency income support for employees of vulnerable firms whose businesses had been negatively impacted by COVID restrictions and whose turnover had reduced by at least 25% during Q2 while the strictest public health measures were in place. The support was paid via the employer so as to maintain employment links between the employee and employer insofar as was possible and, to that end, the rate of Employers' PRSI was also significantly reduced to 0.5%. The level of income given to each individual employee was based on previous wages received in January and February 2020. Over 66,500 employers received a subsidy under the TWSS with payments worth just under €2.9 billion paid out to a total of 664,000 workers.
The TWSS was intended to facilitate the retention of the employer/employee relationship in relevant cases, thereby supporting the early recommencement of normal business when conditions allowed. There was no distinction made regarding the subsidy amount based on whether the business had closed due to the restrictions brought in by the Government or had continued to trade with employees continuing to work part-time or work full time with similar hours as before the Covid-19 pandemic.
An employer who received TWSS payments under the scheme was obliged to pass on any such payments to its employees. Revenue’s ongoing TWSS compliance programme is specifically examining that employers adhered to that requirement, as well as examining employer/employee eligibility for the TWSS.
The employer was expected to make best efforts to maintain the employee’s net income for the duration of the scheme and the position in relation to the TWSS did not affect any legal obligations that the employer may have to their employee as regards any terms, conditions or entitlements of their employment, including pay, sick pay or pension schemes.
However, the question of an individual’s entitlements and rights in an employment context, the question of what wages an employer would be legally obliged to pay employees in respect of hours worked and the question of an employer’s capacity to pay wages to employees at pre-COVID levels in the light of the impact of the pandemic on the employer’s business, are outside the remit of the TWSS.
As with the decision around whether to avail of the TWSS in the first place, the question of whether an employer would recover amounts from its employees in any particular circumstance is a matter between the employer and the relevant employees. Where an employer takes such steps they are obliged to comply with the formalities of the PAYE deduction system and reflect in their payroll submissions to Revenue the actual position regarding gross and net pay as well as income tax, USC and PRSI deductions for each employee so impacted. These adjustments may materially affect each employee’s end of year position for 2020 and a failure by an employer in any such cases to accurately correct the records would be regarded as a breach of the PAYE Regulations.
340. Deputy Pádraig O'Sullivan asked the Minister for Finance his plans to extend the stay and spend tax credit initiative beyond April 2021; and if he will make a statement on the matter. [16894/21]
Amharc ar fhreagra344. Deputy Aindrias Moynihan asked the Minister for Finance the consideration being taken to extend the spend and stay scheme given that with the new level 5 restrictions persons are not able to avail of this scheme currently; and if he will make a statement on the matter. [1818/21]
Amharc ar fhreagraI propose to take Questions Nos. 340 and 344 together.
The purpose of the Stay and Spend Tax Credit scheme is to provide targeted support to businesses within the hospitality sector whose operations are likely to be most affected by continued restrictions on public health grounds. Under the relevant legislation, the scheme is due to expire at the end of next month but the flexibility is there to extend it further to the end of the year subject to certain statutory procedures being followed.
Since 1 October 2020, a total of 59,172 receipts have been uploaded to the Revenue Receipts Tracker, as at 25 March 2021. The related expenditure recorded on these receipts amounts to €9,722,399, and the potential tax cost is €1,944,480, assuming all such expenditure is claimed and qualifies in full for tax relief. As at 25 March, 3,145 service providers have registered for the scheme.
The scheme was developed at a time when there appeared to be a steady downward trend in infection rates and there was an expectation that the re-opening of the economy could be sustained uninterrupted. Unfortunately, this has not been the case and, with the exception of some short periods, public health restrictions have had the effect of impeding the operation of the incentive as originally envisaged.
Decisions on next steps relating to the scheme have yet to be taken. However, I would make the point that Stay and Spend should not be viewed in isolation from the other significant measures put in place to support businesses generally, including the hospitality sector.
In recognition of the unprecedented challenges facing the Hospitality and Tourism sector, the VAT rate was reduced from 13.5% to 9% from 1 November 2020. This is a temporary but important measure to provide support to the sector, where many businesses remain closed for now and those that are open are operating at significantly reduced capacity. It will apply until 31 December 2021. It should be noted that this VAT rate reduction came after the introduction of the Stay and Spend Tax Credit and reflects the fact that the latter was not intended to be the sole sector-specific support for hospitality.
Also, the Employment Wage Subsidy Scheme (EWSS) continues to be a key component of the Government’s response to the COVID-19 crisis to support viable firms and encourage employment in the hospitality and tourism sector and beyond. I have been clear that there will be no cliff-edge to the EWSS and, as announced by Government last month, the scheme is being extended in its enhanced form to the end of June 2021.
The Covid Restrictions Support Scheme (CRSS) is a targeted support for businesses significantly impacted by restrictions introduced by the Government under public health regulations to combat the effects of the COVID-19 pandemic. The support is available to companies, self-employed individuals and partnerships who carry on a trade or trading activities, the profits from which are chargeable to tax under Case I of Schedule D, from a business premises located in a region subject to restrictions introduced in line with the Living with COVID-19 Plan.
Businesses may also be eligible under the Debt Warehousing Scheme to ‘park’ certain VAT and PAYE (Employer) liabilities, excess payments received under the Temporary Wage Subsidy Scheme (TWSS), outstanding balances of self-assessed Income Tax for 2019 and Preliminary Tax for 2020.
341. Deputy Paul McAuliffe asked the Minister for Finance his views on the removal of cash desk services at branches of a bank (details supplied); and if he will make a statement on the matter. [17048/21]
Amharc ar fhreagraAs the Deputy may be aware, as Minister for Finance, I have no role in the commercial decisions made by any bank in the State. This includes banks in which the State has a shareholding.
Decisions in this regard, including the management of branch or ATM networks, are the sole responsibility of the board and management of the banks which must be run on an independent and commercial basis. The independence of banks in which the State has a shareholding is protected by Relationship Frameworks which are legally binding documents that cannot be changed unilaterally. These frameworks, which are publicly available, were insisted upon by the European Commission to protect competition in the Irish market. The Permanent TSB Relationship Framework can be found at the following link:
https://assets.gov.ie/5907/220119171401-73204346db4a45f9b88b0b4cd64066a7.pdf.
Permanent TSB issued a press release on 16th March announcing its commitment to maintaining its branch network. In the same announcement the bank confirmed that it has introduced Quick Banking Machines into 44 branches which will automate cash transactions and free staff to support customers. The bank added that with the exception of coins, these machines can handle all the cash transactions associated with a cash desk.
The bank’s full press release can be found at the following link: www.permanenttsbgroup.ie/permanent-tsb-retail-director-confirms-commitment-maintaining-branch-network.
342. Deputy Patrick O'Donovan asked the Minister for Finance if a copy will be provided of the Ministerial consent signed by the Minister of State at his Department to allow Limerick City and County Council draw down funding under the large-scale sport infrastructure fund for the new athletics hub at Newcastle West, County Limerick. [17065/21]
Amharc ar fhreagraI am advised by officials in my Department that a notice of consent, signed by Minister of State, Seán Fleming T.D., has issued to Limerick City and County Council in relation to a proposed new athletics hub at Newcastle West, Co Limerick.
Minister of State Fleming granted his consent on 25 February 2021. An electronic copy of the signed notice of consent issued to Limerick City and County Council on that date. A hard copy of the signed notice of consent subsequently issued to Limerick City and County Council on 23 March 2021.
The obligation on Limerick City and County Council to seek consent arose under Section 67(2) of the Credit Institutions (Stabilisation) Act, 2010. This section was enacted in order to ensure compliance with the terms of the loan agreements under the EU-IMF financial assistance programme.
343. Deputy Aindrias Moynihan asked the Minister for Finance the legislative steps planned to tackle the ongoing high cost of insurance, especially motor insurance; and if he will make a statement on the matter. [1817/21]
Amharc ar fhreagraThe Government’s Action Plan for Insurance Reform contains a range of deliverables, including legislation where required, in a number of Government Department policy areas. Work is underway in relation to certain areas, including:
- implementing the new Personal Injuries Guidelines to replace the Book of Quantum via further amendments to the Judicial Council Act 2019 ;
- examining legal changes to the duty of care;
- reducing insurance fraud and placing perjury on a statutory footing, making the offence easier to prosecute;
- strengthening the legal enforcement powers of the Competition and Consumer Protection Commission; and
- enhancing the role of the Personal Injuries Assessment Board, including through legislative change.
In addition to this work, there has been recent intensive engagement with key stakeholders by Minister of State Fleming, including meetings with the major insurers, the Alliance for Insurance Reform and industry representatives Insurance Ireland. He is due to meet with the major insurers again in the coming weeks. Separately, an Office to Promote Competition in the Insurance Market has been recently established within the Department of Finance and work is underway to increase market transparency through the National Claims Information Database (NCID), including for employer and public liability insurance.
With regard to the specific issue of the cost of motor insurance premiums, I would draw the Deputy’s attention to data from the Central Bank’s NCID Private Motor Insurance Report 2, published in November. This shows the average earned premium for private motor insurance decreased by 9 per cent to the end of 2019 from its mid-2018 peak. I would reasonably expect that the next report – covering 2020 – will show further reductions. Separately, the most recent data from the Central Statistics Office’s Consumer Price Index indicates that motor premiums have reduced by just over 30 per cent from their July 2016 peak. While for methodological reasons, these datasets are not directly comparable, both have indicated the same downward trend for some time. This in part reflects the positive work done by the Cost of Insurance Working Group, and it is the Government’s intention to build on this success via the new Action Plan.
In conclusion, seeking to secure a more sustainable and competitive market through deepening and widening the supply of insurance in Ireland remains a priority issue for this Government. Both I and Minister of State Fleming will continue to play a lead role in this policy area.
345. Deputy Pádraig O'Sullivan asked the Minister for Finance if he will consider amending regulations with regard to the local property tax to allow more flexibility for persons who have been in receipt of Covid-19 payments for more than six months; and if he will make a statement on the matter. [1322/21]
Amharc ar fhreagraRevenue has been very active in supporting taxpayers and businesses throughout the COVID-19 crisis, including administering the key Wage Subsidy Schemes and the Debt Warehousing Scheme. In addition, Revenue has also engaged extensively with individual taxpayers experiencing financial difficulties due to the pandemic to agree flexible arrangements that best suit their circumstances, including in respect of Local Property Tax (LPT) liabilities.
Regarding LPT specifically, Revenue has assured me that any property owners experiencing financial difficulties can avail of a wide range of flexible payment options both in respect of 2021 liabilities and for any previous years where liabilities remain outstanding. The full range of payment options, which includes phased arrangements, are available to property owners via the LPT portal on the Revenue website at https://lpt.revenue.ie/lpt-web/views/login.html?execution=e1s1.
Alternatively, property owners can make direct contact with Revenue at telephone number (01) 7383626 or by writing to LPT Branch, PO Box 1, Limerick, where every effort will be made to agree a suitable payment arrangement.
346. Deputy Neale Richmond asked the Minister for Finance his plans to extend tax warehousing without penalty to the entertainment industry until mass gatherings are permitted again; and if he will make a statement on the matter. [17109/21]
Amharc ar fhreagra385. Deputy Louise O'Reilly asked the Minister for Finance if the tax debt warehousing scheme will remain available for businesses until the full lifting of all restrictions. [17264/21]
Amharc ar fhreagraI propose to take Questions Nos. 346 and 385 together.
I am advised by Revenue that the current tax warehousing schemes allow for the deferral of collection of certain tax liabilities relating to “Period 1”, the “Covid-19 restricted trading period”. The tax liabilities that may be deferred or “warehoused” are VAT, PAYE (Employer) liabilities, excess Temporary Wage Subsidy Scheme (TWSS) payments due to be refunded to Revenue by employers, and certain self-assessed income tax liabilities.
To be eligible for income tax warehousing, taxpayers have to declare that they estimated their total income for 2020 would be at least 25% less than their total income for 2019 and where applicable, that their total income for 2021 will be at least 25% less than their total income for 2019.
In the case of VAT, PAYE (Employer) and excess TWSS liabilities, Period 1 refers to the period when a business has been unable to trade due to the Covid-19 related restrictions and includes the first full two monthly VAT period after the business resumes trading.
Revenue has confirmed that where a business re-opened but has had to close again due to the re-imposition of restrictions, the trade is deemed to be still subject to the restrictions provided for in the regulations under sections 5 and 31A Health Act 1947 until it has re-opened again. This means that VAT, PAYE (Employer) and excess TWSS liabilities for such businesses can continue to be warehoused in respect of the extended restricted period.
The end date for Period 1, and consequently the period for which liabilities can be warehoused, will vary from business to business depending on the restrictions affecting that business. However, in all cases, Period 1 will include the duration for which a business is subject to trading restrictions plus the first full VAT period after the restrictions have been lifted and the business resumes trading.
Businesses in the entertainment sector that are currently eligible for warehousing will continue to be able to warehouse their liabilities from Period 1 until the restrictions for that sector are lifted.
Following the expiration of Period 1, businesses are afforded a further 12 months (“Period 2”) during which collection of warehoused liabilities will be deferred. No interest will be charged on outstanding Covid-19 liabilities in either Period 1 or Period 2. Payment of warehoused debts will not commence until after Period 2. Interest on warehoused liabilities is charged from this point on at c. 3% per annum until the liabilities are paid in full.
347. Deputy Peadar Tóibín asked the Minister for Finance his views on the over-concentration of the Irish banking market; and the measures being taken to counteract this over-concentration. [42096/20]
Amharc ar fhreagraAs the Deputy may be aware, the responsibility for competition policy rests with the Department of Enterprise, Trade and Employment and the Competition and Consumer Protection Commission (CCPC) is an independent statutory body that is responsible for the enforcement of competition law in Ireland. I would welcome the introduction of new lenders to the Irish market.
When considering competition in any market, two key aspects are the range of products available to all sectors and the pricing of those products. All the retail banks have extensive product ranges, so continued supply should not, for the most part, be a cause for concern. Indeed, it is worth noting that the provision of financial services is evolving rapidly. Innovations in the FinTech space and new initiatives from credit unions and An Post are resulting in the provision of new services and products all the time.
The Irish retail banking system is concentrated, with five retail banks accounting for the majority of new mortgage lending, and three retail banks accounting for the majority of new bank lending to SMEs. However, the wider context is one of improving competition in the provision of financial services, with new entrants to both bank and non-bank lending markets for households and businesses in Ireland already announced. Indeed, it is a welcome development that a new residential mortgage lender has recently entered the market. This will be of benefit to new mortgage borrowers and also to borrowers who may wish to consider switching to a new lender.
The Central Bank recognises that the relatively lower levels of competition in the Irish retail banking market may be one contributing factor to average interest rates for mortgage and SME lending being higher in Ireland than the Eurozone average. The wider context is one of improving competition in the provision of financial services, with new entrants to both bank and non-bank lending markets for households and businesses in Ireland either already announced or likely in the coming years.
Price competition is possible even in a concentrated system. The Irish mortgage market in particular is interesting in this regard. Since 2015, headline interest rates have fallen substantially for household and SME borrowers in Ireland despite a relatively small number of participants. Trends show that interest rates in Ireland have been falling in recent years, providing benefit to consumers. Interest rates on fixed rate mortgages (excluding renegotiations) have fallen from 4.05% in December 2014 to 2.79% in January 2021. The weighted average interest rate on new fixed rate mortgage agreements declined by 2 basis points to 2.65% in January 2021, the lowest level since data has been collected on a comparable basis.
There have also been reductions in interest rates on loans to SMEs from 5.19% to 3.95% over the period Q1 2015 to Q4 2020, as well as reductions in interest rates on consumer loans (for example, from 8.3% to 6.66% on APRC consumer loans from January 2015 to January 2021).
The Department of Finance published a paper in 2019 by Indecon Consulting on an Evaluation of the Concept of Community Banking in Ireland. This was a follow on to a previous paper on Local Public Banking published by the Department of Finance in 2018. The Indecon report concluded that there is no business case for the State to establish a public banking system in Ireland, supporting the outcome of the previous report on Local Public Banking.
Credit unions are increasing the offering of financial products for their members. The Credit Union Act, 1997 (the 1997 Act) and the Credit Union Act 1997 (Regulatory Requirements) Regulations 2016 set out the services that credit unions may provide to their members. These include loans and savings under the 1997 Act and a further suite of services under the 2016 Regulations such as third party payments; ATM services; bureau de change and certain insurance services on an agency basis. I understand that a number of credit unions provide some of the services provided for under the 2016 Regulations. Where a credit union wishes to provide other services to its members, an application may be made to the Central Bank for approval to provide such services in accordance with the provisions set out in sections 48-51 of the 1997 Act.
One such additional service includes the Member Personal Current Account Service (MPCAS). In 2016, the Central Bank defined and described a suite of additional services known as MPCAS, under which approved credit unions may offer personal current accounts with debit cards, overdrafts and a wide range of payment services within an appropriate risk framework.
An Post offers financial services including a payment account, personal loans, credit cards, a range of insurances, money transmission and foreign exchange services. An Post offers counter services for a number of retail banks, allowing customers to lodge and withdraw cash at An Post branches. There is there is a significant network of post offices in areas where there is no bank branch within five kilometres. An Post offers counter services for AIB, allowing customers to lodge and withdraw cash at An Post branches.
Bank of Ireland has also recently announced the closure of 88 branches in the Republic of Ireland, alongside this, it also announced a new partnership with An Post to provide a range of banking services means that there will be a post office within, on average, less than 500 metres of the branches that are being closed. The Bank confirmed that the new partnership with An Post will be available to all Bank of Ireland customers before any branch closes.
348. Deputy Dara Calleary asked the Minister for Finance if his Department has assessed the likely impact of the EU–UK trade agreement on the public finances in 2021. [1870/21]
Amharc ar fhreagraA key assumption underlying Budget 2021 was that there would be a disorderly end to the Brexit transition period.
It was in that context that my Department predicted a deficit of €20.5 billion, or 5.7 per cent of GDP for 2021.
Budget 2021 provided a further €100m to Departments in 2020 for Brexit preparedness measures, and €340 million in 2021. The allocation was to ensure the continuation of existing measures along with new supports for sectors and enterprises likely to be most affected. This was in addition to over €700 million in successive Budgets since 2017.
The Recovery Fund of €3.4 billion was also set up, and designed to allow for specific, targeted measures to be introduced when and where the need arises in response to both Brexit and Covid-19.
Since Budget 2021 last October, the situation has evolved. The EU-UK Trade and Cooperation Agreement is now in place. This will likely have a positive impact relative to the ‘no-deal’ scenario upon which the Budget projections were based. However, it is important to bear in mind that while the worst form of Brexit – involving tariffs and quotas on trade with the UK - has been avoided, Irish firms will still be impacted by the change in trading arrangements.
Updated medium-term macroeconomic and fiscal forecasts will be published in April with the Stability Programme Update.
349. Deputy Barry Cowen asked the Minister for Finance the measures being taken by revenue and customs officials to help businesses adjust to the new procedures for trade with the United Kingdom since 1 January 2021. [1867/21]
Amharc ar fhreagraThe trading environment between Ireland and Great Britain changed irrevocably on 1 January with customs and SPS formalities now an integral part of trade with Great Britain. The Protocol on Ireland and Northern Ireland means that no new procedures apply to goods moving between Ireland and Northern Ireland. The Government and State Agencies have been providing, and continue to provide, a range of advisory, financial and upskilling supports to assist businesses in moving goods, to, from or through Great Britain. Further information is provided on Gov.ie/Brexit.
It is clear from the first three months trading under the new conditions that some businesses had undertaken extensive preparations and have adapted well to the new requirements. This is evident in that currently over 80% of freight vehicle movements are being green routed and are therefore permitted to leave the ports without any interaction with Customs or the other regulatory authorities on arrival in Ireland.
It should be noted that, due to the nature of the goods traded with the UK e.g. high levels of foodstuffs, there will always be a level of documentary or physical examination of goods movements required as part of Ireland’s obligation to protect the Single Market and the Customs Union. In practical terms this means that there will never be a scenario where all goods (i.e.100%) arriving into Ireland from Great Britain will be green routed.
I am advised by Revenue that some businesses were less well prepared or underestimated the level of preparations required and have found compliance with the new requirements challenging. Additionally, the tight timeframes involved in the just-in-time business model, which underpins trade with the UK, puts additional pressure on the supply chain to gather the detailed information required to complete customs and SPS declarations.
Revenue is aware that some goods movements are being ‘orange routed’ due to unfamiliarity with the new requirements. In such instances, Revenue and other State Agencies actively work with the relevant responsible parties in the supply chain to overcome and rectify the issues as quickly as possible. In time, dealing with the customs and other regulatory formalities that now apply to goods moving to, from or through Great Britain will become routine for importers, transport companies and truck drivers. Revenue is continuing to work closely with individual businesses and business representative bodies to assist them in building capability and understanding so as to be able to complete the relevant customs and other regulatory requirements.
The EU-UK Trade and Cooperation Agreement (TCA) was agreed very late last year which did not allow much time for businesses to tailor their preparations, particularly in relation to rules of origin requirements, which are fundamental to allowing tariff free trade with the UK. Where additional guidance was needed this has been provided by Revenue via eCustoms Notifications. 30 such notifications have been issued so far in 2021. These are available on the Revenue website and are also emailed to anyone who has subscribed to the mailing list. Information is also available through Revenue’s Brexit Latest News.
I am advised that since 1 January 2021 Revenue has:
- provided important Customs advice to hauliers and truck drivers moving goods from Great Britain (GB) into Irish ports regarding creating a Pre-Boarding Notification (PBN) and the channel routing look up facility.
- issued a detailed step by step guide (including screenshots from the systems) on how to create and, if necessary, edit a PBN for import and export declarations.
- provided information and clarification on the correct procedure for completing an Entry Summary Declaration (ENS) for Roll-On Roll-Off ferry movements.
- provided, on a temporary basis, an administrative easement and support service for businesses who are experiencing difficulties in lodging their safety & security ENS declaration.
- engaged with representative bodies for freight forwarders.
- engaged with shipping companies in relation to companies having difficulties in boarding ferries in Great Britain.
- issued stakeholder group updates.
- engaged with individual businesses to resolve matters specific to their business models.
- provided significant support to businesses through its range of support services including our 24/7 Customs telephone helpline ((01) 7383685).
Additionally, since 1 January Revenue has participated in 36 events aimed at providing additional supports to businesses and trade representative bodies. This engagement has been extremely positive, and Revenue has been able to work with businesses in identifying solutions to their specific issues and to help mitigate some of the impacts of the UKs departure from the EU. Revenue will continue to work with trade and business, on both a collective and individual basis, to assist them in addressing the challenges and issues arising from the UK’s departure from the EU. Customs and other State agency officials are working on a 24/7 basis at Dublin and Rosslare ports and in Dublin Airport, and will work with businesses to resolve issues as quickly as possible.
Revenue is actively working with the Department of Agriculture Food and the Marine (DAFM) and the HSE’s Environmental Health Officers (EHO) to improve interagency communication, to increase the opportunities to share data thereby reducing the requirement for trade to submit the same data to multiple State Agencies and to streamline processes in as far as is practicable. However, additional data requirements apply to SPS and controlled goods movements beyond those required for standard customs clearance purposes and in such circumstances documentary requirements can and will arise which have not previously been supplied as part of the engagement with Customs in any particular instance.
I know that Revenue continues to work to optimise the efficiency with which legitimate trade can be processed, subject to the need for Ireland to play its part in protecting the integrity of the Single Market and the Customs Union and compliance with the overarching UCC legal framework and other similar frameworks such as the Official Control Regulations.
