Written Answers Nos. 1-30
6. Deputy Jackie Cahill asked the Minister for Finance if he intends to extend the timeframe for the reduction in excise duties on petrol, diesel and marked gas oil; and if he will make a statement on the matter. [20571/22]
Amharc ar fhreagra26. Deputy Joe Flaherty asked the Minister for Finance the estimated cost of the recent cuts to excise duties on petrol, diesel and marked gas oil; and if he will make a statement on the matter. [20524/22]
Amharc ar fhreagra61. Deputy Barry Cowen asked the Minister for Finance if he has plans to further reduce excise duties on petrol and diesel; and if he will make a statement on the matter. [20522/22]
Amharc ar fhreagraI propose to take Questions Nos. 6, 26 and 61 together.
The Government is very aware of the impact of rising fuel prices on households and businesses. These trends are driven primarily by global factors. The key drivers of this increase are increases in wholesale energy prices as a result of the rapid rebound in global demand, global supply chain disruptions and the imbalance between demand and supply that emerged as economies re-opened. More recently, as a result of the war in Ukraine, oil and gas prices have risen further. It is not possible for the Government to fully insulate consumers against these price impacts, however, a number of very significant steps have been taken to lessen the impact of increased fuel prices.
On fuel excise, a package of measures, to the value of €320 million, was introduced with effect from 10 March reducing the VAT inclusive excise duty on petrol, diesel and MGO by 20, 15 and 2 cent per litre respectively. These reductions mitigate the cost of a fill of a 60 litre tank by some €12 for petrol and €9 for diesel. This assists all transport users, rural and urban, including commuters, business and farmers. These measures are now being extended to 12 October 2022, with an additional 3 cent reduction for MGO. The extended measures will cost a further €97m.
Energy taxation in Ireland is governed by the Energy Taxation Directive, which sets out excise duty rules covering all energy products in the EU used for heating and transport, as well as electricity. The Directive sets out minimum levels of taxation applicable to these energy products for specific fuel uses. For diesel used as a propellant, the minimum rate is €330.00 per 1000 Litres exclusive of VAT. This equates to 33 cents per litre.
The March 9th (pre reduction) rate on MOT on diesel was 53.55 cent per litre. The subsequent reductions have brought the overall MOT rate to 40.54 cents per litre. The Diesel Rebate Scheme operates a price cap of 7.5 cent per litre bringing the effective rate of excise paid to 33.04 cents for those availing of the relief.
For this reason, it is not possible to reduce the rate on MOT on diesel by any more than 15 cents VAT inclusive.
8. Deputy Peadar Tóibín asked the Minister for Finance if Ireland or Europe imposes any tax on fertiliser or the sale of agricultural fertiliser; if so, the percentage breakdown of this tax; if any environmental taxes are imposed on the sale or purchasing of fertiliser; and if the Government have plans to impose such a tax. [21258/22]
Amharc ar fhreagraI am advised by Revenue that the VAT rating of goods and services is subject to the requirements of EU VAT law, with which Irish VAT law must comply. In general, the EU VAT Directive provides that all goods and services are liable to VAT at the standard rate, unless they fall within categories of goods and services specified in Annex III of the VAT Directive, in respect of which Member States may apply a lower rate from VAT. Within its rates structure, the EU VAT Directive also allows for historic VAT treatment to be maintained under certain conditions on certain goods and services not provided for in Annex III.
Currently Ireland has a standard VAT rate of 23% and two reduced rates of 13.5% and 9%. Ireland also holds a number of derogations, under which is it permitted to retain some historic VAT arrangements, under strict conditions.
On this basis, the zero rate of VAT applies to the supply of fertiliser including agricultural fertiliser, provided such fertiliser is supplied in units of not less than 10 kilos; otherwise, the standard rate of VAT applies. No carbon tax is applied on the sale or purchase of fertiliser.
I have no proposals to change the current VAT arrangements in this area at the moment.
9. Deputy Mick Barry asked the Minister for Finance if he will support measures to levy corporate landlords' profits to assist in funding social and affordable housing in view of the level of profits and the dominant position of corporate landlords; and if he will make a statement on the matter. [12111/22]
Amharc ar fhreagraThis Government is providing record levels of State investment for all forms of housing. Housing for All is the Government’s plan to increase availability and affordability of housing, and to create a sustainable housing system into the future. This year, €4 billion of Exchequer funding, supplemented by Land Development Agency funding and Housing Finance Agency lending, will be made available to deliver 9,000 new-build social homes and make 4,130 homes available for affordable purchase and Cost Rental. Over 300,000 new homes will be built by 2030, including a projected 54,000 affordable homes for purchase or rent and over 90,000 social homes.
However, Government expenditure alone cannot meet the projected housing needs in the State. Investment by large-scale corporate landlords is critically important to generating additional supply and improving affordability. The Deputy’s proposal of an additional levy on corporate landlords' profits could act as a deterrent to the crucial participation of non-bank finance in the housing market. It should be noted that much of the investment by these large scale landlords is in the form of forward commit transactions - that is, the provision of capital to fund the construction of new dwellings or binding purchase contracts to enable financing - thereby directly supporting additional supply.
Notwithstanding their increased activity in the property market, it must also be acknowledged that institutional investors still account for a relatively small share in the context of the wider residential housing market, far below a dominant market share. According to CSO data, the Real Estate sector (a close proxy for institutional investors) which includes property funds and real estate investment trusts, accounted for just 3% of the purchases of all dwellings in 2020 and 6% of the purchases of new dwellings. According to CBRE, institutional investors owned approximately 20,000 properties in 2020, accounting for less than 1% of the total housing stock.
The relevant Government Departments will, on a bi-annual basis, assess the adequacy of funding available from all sources - including the domestic and international banking sector, capital markets and international capital - to complement public investment in order to meet the demand for homes across the various tenures.
10. Deputy Neale Richmond asked the Minister for Finance if he will report on the tax receipts for the first quarter of 2022; and if he will make a statement on the matter. [21166/22]
Amharc ar fhreagra64. Deputy Michael Moynihan asked the Minister for Finance the way the overall tax receipts in the first quarter of 2022 compare with the same period in 2021; and if he will make a statement on the matter. [20521/22]
Amharc ar fhreagraI propose to take Questions Nos. 10 and 64 together.
Tax receipts in the first quarter of the year amounted to €17.2 billion. This was driven by particularly strong growth in income tax, VAT and corporation tax. Total tax revenue was up by over €4 billion, or more than 30 per cent, on the same period last year.
Income tax receipts in the quarter were up by €900 million, or 16 per cent, on the first quarter of 2021. This is a reflection of the strong recovery in the labour market, with employment now at its highest level ever. The strong rebound in VAT receipts – up by €1.4 billion, or more than 30 per cent – points to the recovery in consumer spending.
Of course, it is important to remember that these annual comparisons are flattered by a number of factors, such as the impact of stringent public health restrictions in the first quarter of last year, as well as the temporary reduction in the standard rate of VAT (which straddled part of the first quarter of last year). These exaggerate the year-on-year growth.
Nonetheless, even when compared to 2019 – the ‘pre-pandemic’ position – VAT receipts are still up significantly, by 17 per cent.
Excise receipts of €1.2 billion were broadly flat on last year. This is due, in part, to the measures Government has taken to address the rising cost of living by reducing excise on petrol, diesel and marked gas oil, and likely also reflects the impact of rising energy prices.
Corporation tax receipts were €1.9 billion in the quarter, up by €1.3 billion on the same period last year. This is due in part to a timing issue, whereby receipts that would have been expected in August of this year have been received earlier, distorting the annual comparison. It also reflects increased profitability in a small number of taxpayers in the ICT sector.
I would caution that these figures are backward-looking: my Department expects that economic activity will be negatively affected by the Russian invasion of Ukraine in the coming months, with implications for the public finances by way of slower tax revenue growth and higher expenditure associated with re-settling Ukrainian refugees.
Finally, it is worth pointing out that sovereign borrowing costs are now rising and so the capacity of the Government to run large deficits is more constrained than during the pandemic.
13. Deputy John Lahart asked the Minister for Finance if motor insurance premiums are decreasing; and if he will make a statement on the matter. [20548/22]
Amharc ar fhreagraAt the outset, it is important to note that neither I, nor the Central Bank of Ireland, can direct the pricing or provision of insurance products, as this is a commercial matter which individual companies assess on a case-by-case basis. This position is reinforced by the EU Single Market framework for insurance (the Solvency II Directive) which expressly prohibits Member States from doing so.
Motor insurance is the one insurance product that is mandatory, in that every person intending to use a vehicle on a public road must have third-party cover at a minimum. Therefore, it is important that motor insurance is affordable. In that regard, I am pleased to note that data from both the Central Statistics Office (CSO) and National Claims Information Database (NCID) show that prices are falling for private motor insurance.
CSO Consumer Price Index (CPI) data indicates that the price of motor insurance peaked in July 2016 and has since fallen 40 per cent to March 2022, including a decline of 12.1 per cent in the past year. For comparison, the CPI as a whole increased by 6.7 per cent in the same period. The most recent NCID data indicates that the average earned premium per policy peaked at €708 in Q4 2017 and declined 16% to €595 in Q4 2020. I expect that the next NCID report on private motor insurance, due later this year, will show continued decrease in insurance prices.
While the two datasets, from CSO and the Central Bank, should not be compared as ‘like with like’ due to different methodologies used to produce them, both show a similar trend of falling motor insurance premiums in recent years. This is a welcome development taking account of the Government's significant reform agenda that we are implementing through our Insurance Action Plan.
14. Deputy Mairéad Farrell asked the Minister for Finance the status of the work of the Office to Promote Competition in the Insurance Market since its establishment; its terms of reference and objectives; the number of engagements it has had with stakeholders; and the success to date in promoting competition in and attracting new entrants to the insurance market. [21486/22]
Amharc ar fhreagra23. Deputy Michael Moynihan asked the Minister for Finance the details of his work to increase competition in the Irish insurance market; and if he will make a statement on the matter. [20520/22]
Amharc ar fhreagra52. Deputy Willie O'Dea asked the Minister for Finance if he will report on the work of the Office to Promote Competition in the insurance market; and if he will make a statement on the matter. [20566/22]
Amharc ar fhreagraI propose to take Questions Nos. 14, 23 and 52 together.
Insurance reform is a key priority for this Government as evidenced by the fact that implementation of the Action Plan on Insurance Reform is overseen by the Cabinet Sub-Group on insurance reform. The second Implementation Report, which was published on 1 March 2022, shows that 80 per cent of the actions contained therein are now been delivered.
The establishment of the Office to Promote Competition in the Insurance Market, which I chair, is a Programme for Government commitment. Its aims are to help expand the risk appetite of existing insurers and explore opportunities for new market entrants in order to increase the availability of insurance. The Terms of Reference are available on the Office’s web page.
Since its establishment, the Office has held over 70 meetings with a range of stakeholders, including insurance companies and representative organisations. During 2021, I met with the CEOs of the major insurance providers in Ireland twice, who confirmed that they are committed to passing on savings from the new Personal Injury Guidelines, and other reforms, to customers. They also reiterated their support for the reform agenda and that they are adhering to the Guidelines in direct settlements with their clients.
The Office has also cooperated with the Central Bank of Ireland to create a databank for new market entrants, which was launched on 8 February. This databank is an additional source of information for insurance providers who are considering entering the Irish market, as it provides ‘one-stop’ access to key sources of information on insurance in Ireland, and showcases the high-quality work being done in data collection by the Central Bank of Ireland, such as the National Claims Information Database (NCID). In addition, the Office is actively working with IDA Ireland to help leverage the ongoing insurance reforms with the aim of targeting new entrants to the Irish market, or persuading current incumbents to expand their existing operations here.
I wish to assure the Deputies of my intention to work with my Government colleagues to ensure further implementation of the Action Plan which should have a positive impact on the affordability and availability of insurance for all consumers.
17. Deputy Martin Browne asked the Minister for Finance if he is committed to introducing a vacant property tax following the collection of data on vacancy levels under objective 19.12 of Housing for All; and if he will make a statement on the matter. [21438/22]
Amharc ar fhreagra19. Deputy Steven Matthews asked the Minister for Finance his views on the effectiveness on implementing a vacant homes tax, collectable by the Revenue Commissioners with the purpose of bringing additional properties into the housing market; and if he will make a statement on the matter. [21260/22]
Amharc ar fhreagra20. Deputy Mairéad Farrell asked the Minister for Finance if he is committed to introducing a vacant property tax following the collection of data on vacancy levels under objective 19.12 of Housing for All; and if he will make a statement on the matter. [21487/22]
Amharc ar fhreagraI propose to take Questions Nos. 17, 19 and 20 together.
The Government’s strategy ‘Housing For All’ includes an action for my Department to collect data on vacancy with a view to introducing a Vacant Property Tax. The timeframe for delivery on this commitment is the second quarter of 2022. The Finance (Local Property Tax) (Amendment) Act 2021 enabled Revenue to collect certain information in relation to the occupancy status of residential properties including , where unoccupied, the duration and reason for this, in the Local Property Tax (LPT) return forms submitted by residential property owners in respect of the new LPT valuation period 2022-2025. This information, together with information from other available sources, will be used to assess the merits and impact of introducing a Vacant Property Tax.
In considering the case for such a tax it is important to have a sound understanding of the quantity, locations and characteristics of long-term vacant properties. It is also essential to identify the reasons for vacancy, and whether this is long or short-term in nature. There may be genuine and acceptable reasons for vacancy such as refurbishment work, the temporary absence of the owner for medical reasons or pending the grant of probate for a deceased person’s estate.
Revenue have completed a preliminary analysis of the LPT returns received to date which has been shared with my Department. The results of the preliminary analysis suggest that levels of vacancy are low across all counties. The Minister for Finance will consider the issue in consultation with his colleagues before reverting to Government with proposals on the appropriate response. I understand Revenue intends to publish a profile of the occupancy data from the LPT returns in due course.
Addressing vacancy and dereliction, and maximising the use of the existing housing stock, is a priority objective of the Government, as evidenced in the Housing for All Strategy where one of the four pathways in the plan is specifically dedicated to this area.
21. Deputy James O'Connor asked the Minister for Finance if his Department will consider a new tax incentive for start-up businesses in rural towns that are hosting refugees in order to increase employment and job opportunities in those areas; and if he will make a statement on the matter. [21467/22]
Amharc ar fhreagraI am happy to advise the Deputy that there is already a tax incentive for new start up companies - Section 486C of the Taxes Consolidation Act 1997 provides relief from corporation tax for start-up companies in their first years of trading.
I extended this relief in last year's Finance Act for a period of five years, to end-2026. In view of the challenges facing small businesses as a result of the pandemic and related public health restrictions, I also enhanced the relief to apply to qualifying companies in their first five years of trading, an increase from the previous three-year claim window.
The objective of this tax relief is to support new business ventures in their critical early years of trading, thereby supporting the creation of additional employment and economic activity in the State.
The relief is granted by reducing the corporation tax payable on the profits of the new trade and on any gains on the disposal of assets used for the purposes of the new trade. The amount of relief available is directly linked to the amount of Employer PRSI paid, in order to ensure a link to employment creation.
This tax relief is open to all eligible businesses, wherever they are located in the country, and therefore would be available to businesses in rural towns as described by the Deputy.
24. Deputy Ged Nash asked the Minister for Finance if the recently announced temporary reduction in VAT, excise duty and lump-sum payments are to be paid from a surplus in the public finances or by adding to the public debt; and if he will make a statement on the matter. [21423/22]
Amharc ar fhreagraThe Stability Programme Update (SPU), published by my Department earlier this month, projects an exchequer deficit of almost €1.1 billion for this year. On a general government basis, a deficit of €2.0 billion is in prospect for this year, the equivalent of 0.8 per cent of modified national income.
Since Budget 2022 was presented in October last year, Government has intervened on three further occasions to address the cost of living, with the total cost of the measures announced between February and April estimated at approximately €1 billion. When the Budget 2022 income tax and social welfare package of almost €1.1 billion is included, Government has provided approximately €2.1 billion to address increases in the cost of living.
The SPU includes these costs in the projections for the budgetary deficit; to put it another way, the measures introduced have worsened the budgetary deficit by a broadly similar amount.
All else being equal, therefore, the measures introduced by Government will require additional borrowing and will add to the stock of public debt. For this year, the level of public debt is projected at €234 billion, or 96.5 per cent of modified national income.
Finally, it is also worth pointing out that sovereign borrowing costs are now rising, meaning the Government's capacity to finance large deficits is more constrained than it was during the pandemic.
25. Deputy Brendan Griffin asked the Minister for Finance if his attention has been drawn to the concerns of the tourism and hospitality sector regarding the inflationary impact of increasing the VAT rate from 9% to 13.5% from 1 September 2022; and if he will make a statement on the matter. [21473/22]
Amharc ar fhreagra40. Deputy Brendan Griffin asked the Minister for Finance his plans regarding the increase of the VAT rate for tourism and hospitality businesses from 9% to 13.5% from 1 September 2022; his views on whether this is the wrong time to proceed with such a move; and if he will make a statement on the matter. [21472/22]
Amharc ar fhreagraI propose to take Questions Nos. 25 and 40 together.
As part of the Government’s response to Covid-19, Budget 2021 brought the VAT rate for Hospitality and Tourism related services and goods down from 13.5% to 9%. This was initially planned for 14 months, from 1 November 2020 to 31 December 2021. This was then extended to 31 August 2022 in recognition of the difficulties facing these sectors.
This extension provides support for a further 8 months to the end of the 2022 summer season, allowing for a longer period of recovery for tourism and hospitality. This measure is only one of the supports the Government has provided for businesses over the course of the pandemic and was always designed to be temporary, with a sunset clause included in the enacting legislation.
A review was undertaken of the 9% VAT rate in advance of Budget 2019. This review found that tourism expenditure is more sensitive to income growth and the economic cycle than price changes, which reduces the relevance of the VAT rate applying to the sector.
Should the economic position or tourism demand alter, the VAT rate applicable to tourism and hospitality will be reviewed as part of the budgetary cycle.
27. Deputy Rose Conway-Walsh asked the Minister for Finance if he will consider providing a tax exemption for apprenticeship allowances during participants' off-site training; and if he will make a statement on the matter. [21407/22]
Amharc ar fhreagraI am advised by the Minister for Further and Higher Education, Research, Innovation and Science that the position in relation to apprentice 'off-the-job' training payments and allowances is as follows:
- Craft apprentices alternate between ‘on-the-job’ training with an employer and ‘off-the-job training’ in an education centre.
- For apprentices on apprenticeships before 2016, their sponsoring employer pays the apprentice while they are being trained ‘on-the-job’. While the apprentice is attending ‘off-the-job’ training, an ‘off-the-job’ training payment is paid every two weeks by the Education and Training Board through the Department of Education.
- 'Off-the-job' payments are aligned to gross wages paid by industry in each sector. All 'off-the-job' training payments are subject to statutory deductions of Income Tax, PRSI and USC. The rate of tax that is paid will depend on the apprentice's own personal circumstances.
- In some cases, the Education and Training Board will also contribute an ‘off-the-job’ training allowance to an apprentice's travel and accommodation costs. All 'off-the-job' training allowances are not subject to statutory tax deductions.
- For Revenue purposes, 'off-the-job' training is registered as a separate Department of Education employment to that of the apprentice's sponsoring employer. Appropriate changes to tax credits and/or rate bands between multiple employments can be made through Revenue's myAccount system.
In contrast, apprentices who began apprenticeships from 2016 onwards are paid by their employer for the duration of their apprenticeship. As such, they would not be in receipt of payments from the Education and Training Board for 'off-the-job' training. The rate of pay is agreed between the apprentice and their employer.
In relation to the Deputy's question in respect of providing a tax exemption for apprenticeship allowances paid during off-site training, it is a general principle of taxation that, as far as possible, income from all sources should be subject to taxation.
Ireland has one of the most progressive personal income tax systems in the EU and OECD. This means that Ireland’s tax system is designed to ensure that those on lower incomes pay less tax than those who earn more.
My Department's Tax Expenditure Guidelines make clear 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.
In the circumstances, I have no plans to provide for an exemption along the lines suggested by the Deputy.
28. Deputy Michael Creed asked the Minister for Finance the quantum of taxes, by category, that have been warehoused arising from the provisions in the emergency legislation dealing with Covid-19; and if he will make a statement on the matter. [14985/22]
Amharc ar fhreagraThe Debt Warehousing Scheme was introduced to provide a vital liquidity support to businesses suffering a downturn due to the Covid-19 pandemic. Under the scheme, businesses can temporarily ‘park’ certain tax debts on an interest free basis until the end of this year (or until 30 April 2023 for businesses most impacted by the most recent public health restrictions and who are eligible for certain Covid-19 support schemes).
The scheme is automatically available to businesses and individuals that are managed by Revenue’s Business and Personal Divisions. Revenue’s Business Division manages enterprises with an annual turnover less than €3 million, which accounts for the majority of business taxpayers. Revenue’s Personal Division deals with all business entities with no trade or professional income such as trusts, charities, sporting bodies.
The scheme is available by agreement to larger businesses managed by Revenue’s Large Corporates and Medium Enterprises Divisions, where such businesses were adversely impacted by COVID-19. Revenue’s Medium Enterprises Division deals with businesses with an annual Irish turnover of more than €3 million (but less than €190 million) as well as the subsidiaries/parents of such companies. Large Corporates Division deals with the largest companies with an annual Irish turnover of more than €190 million per annum.
I am advised by Revenue that the total debt eligible for the Debt Warehousing Scheme since its introduction is €31 billion, and 250,000 businesses were eligible to avail of the scheme. However, 91% of that debt has been paid, with the balance of €2.9 billion warehoused at the end of March 2022 in respect of almost 94,000 businesses.
This declared warehoused debt by Revenue Division as of 31 March 2022 is as follows:
|
Division |
€m |
|
Business |
1,467 |
|
Medium Enterprises |
1,011 |
|
Large Corporates |
377 |
|
Personal |
24 |
|
Large Cases – High Wealth Individuals |
6 |
|
Total |
2,885 |
The breakdown of warehoused debt by taxhead as of 31 March 2022 is as follows:
|
Taxheads |
€m |
|
VAT |
1,361 |
|
Employers PAYE |
1,385 |
|
Income Tax |
57 |
|
TWSS |
55 |
|
EWSS |
27 |
|
Total |
2,885 |
The breakdown of warehoused debt by Sector as of 31 March 2022 is as follows:
|
Sectors |
Customer Count |
€m |
% of Total Debt |
|
Wholesale and retail |
14,411 |
652 |
23% |
|
Accommodation and food services |
9,894 |
427 |
15% |
|
Construction |
15,520 |
339 |
12% |
|
Professional, scientific and technical |
10,526 |
301 |
10% |
|
Transportation and storage |
3,776 |
193 |
7% |
|
Administrative and support service activities |
3,992 |
193 |
7% |
|
Information and communication |
3,738 |
191 |
7% |
|
Manufacturing |
4,989 |
170 |
6% |
|
Arts, entertainment and recreation |
2,355 |
76 |
3% |
|
Real estate activities |
3,139 |
70 |
2% |
|
Human health and social work |
3,759 |
69 |
2% |
|
Financial and insurance |
1,126 |
57 |
2% |
|
Other service activities |
5,846 |
55 |
2% |
|
Agriculture, forestry and fishing |
5,225 |
27 |
1% |
|
Education |
2,960 |
26 |
1% |
|
Water supply: sewerage |
343 |
11 |
0% |
|
Electricity, gas, steam and air conditioning supply |
79 |
9 |
0% |
|
All other Sectors/Unknown |
1,677 |
9 |
0% |
|
Public administration |
274 |
5 |
0% |
|
Mining and quarrying |
114 |
5 |
0% |
|
Activities of households as employers |
206 |
0 |
0% |
|
Activities of extraterritorial organisations and bodies |
11 |
0 |
0% |
|
Total |
93,960 |
2,885 |
100% |
Revenue recently published updated statistics on the Debt Warehousing Scheme and this report, as well as further information on the Scheme, is available on the Revenue website.
29. Deputy Paul McAuliffe asked the Minister for Finance the extent of VAT receipts from January to March 2022; and if he will make a statement on the matter. [20551/22]
Amharc ar fhreagraThe total of the VAT Receipts for January, February and March 2022 is €5,851 million.
Tax Trend by Month €000 - Monthly Actual Out turn 2022
|
- |
January |
February |
March |
Total |
|
Valued Added Tax |
3,107,722 |
260,849 |
2,482,287 |
5,850,858 |
