Written Answers Nos. 245-264
245. Deputy Violet-Anne Wynne asked the Minister for Transport if he has spoken with the Commissioner of United States Customs and Border Protection (details supplied) since 1 March 2021; and if he will make a statement on the matter. [50078/22]
Amharc ar fhreagraI can advise the Deputy that while I have not spoken to the Commissioner of United States Customs and Border Protection, Mr Chris Magnus, since his appointment in December 2021, the Preclearance Consultative Group (PCCG) consisting of officials and state representatives from Ireland and the U.S sides meets formally on an annual basis as part of the US preclearance agreement. The last meeting was held on 31 March 2021 and there will be a further meeting held later this year.
In addition to this, my department officials engage regularly with US CBP officials based in Dublin and Shannon Airports on matters related to preclearance at these airports.
246. Deputy Pauline Tully asked the Minister for Transport when funding for TFI Local Link daily return routes from the towns of Ballyjamesduff and Kilnaleck to the town of Cavan as applied for by Cavan-Monaghan Local Link will be sanctioned; and if he will make a statement on the matter. [50085/22]
Amharc ar fhreagraAs Minister for Transport, I have responsibility for policy and overall funding in relation to public transport.
The National Transport Authority (NTA) has statutory responsibility for securing the provision of public passenger transport services nationally. The NTA also has national responsibility for integrated local and rural transport, including the Rural Transport Programme management, which operates under the TFI Local Link brand.
In light of the NTA's responsibilities for public transport services, including in County Cavan, I have referred your question to the NTA for direct reply to you. Please advise my private office if you do not receive a reply within ten working days.
247. Deputy Patrick Costello asked the Minister for Transport if he will increase the frequency of route 60, the new G-Spine BusConnects service which will replace route 79/79a (details supplied); and if he will make a statement on the matter. [50086/22]
Amharc ar fhreagraAs Minister for Transport, I have responsibility for policy and overall funding in relation to public transport; however, I am not involved in the day-to-day operations of public transport. The National Transport Authority (NTA) has statutory responsibility for securing the provision of public passenger transport services nationally and for the scheduling and timetabling of these services in conjunction with the relevant transport operators.
In light of the NTA's responsibility in this area, I have forwarded the Deputy’s question in relation to increasing the frequency of route 60, the new G-Spine BusConnects service due to be introduced this month, to the NTA for direct reply. Please advise my private office if you do not receive a reply within ten working days.
248. Deputy James Lawless asked the Minister for Transport if he will examine an issue with a bus service (details supplied) which is overcrowded to an extent where it is dangerous; if there are plans to approve this service in the near future; and if he will make a statement on the matter. [50123/22]
Amharc ar fhreagraAs Minister for Transport, I have responsibility for policy and overall funding in relation to public transport; however, I am not involved in the day-to-day operations of public transport. The National Transport Authority (NTA) has statutory responsibility for securing the provision of public passenger transport services nationally and for the scheduling and timetabling of these services in conjunction with the relevant transport operators.
In light of the NTA's responsibility in this area, I have forwarded the Deputy’s question in relation to the 139 bus service, to the NTA for direct reply. Please advise my private office if you do not receive a reply within ten working days.
249. Deputy Mark Ward asked the Minister for Transport if there is a national scheme to register custom-built electrical trikes for road worthiness as in the case of a person (details supplied); if clarity will be given in this case; and if he will make a statement on the matter. [50138/22]
Amharc ar fhreagraAs Minister for Transport, I do not have a role in vehicle registration. That is a competence of the Office of the Revenue Commissioner.
Legal requirements govern all vehicles used on public roads in EU member states, including Ireland. A vehicle must meet a set of safety, environmental and conformity of production requirements, known as motor vehicle type-approval, before it can be registered for use. Every vehicle produced must be accompanied by a certificate of conformity, which certifies that the vehicle corresponds to the approved type. A motorised vehicle cannot be registered without this certificate of conformity and, accordingly, type-approval must be sought from an EU Type-Approval Authority.
The relevant type-approval regulation for two- and three-wheeled vehicles is Regulation (EU) 168 of 2013, which details the minimum technical standards such a vehicle is required to meet.
250. Deputy Paul Murphy asked the Minister for Transport if his attention has been drawn to the issues experienced by students when using the 17, 116 and 175 bus routes (details supplied); if he will report the matter to bus companies and ensure that additional buses are added to these routes to resolve these issues; and if he will make a statement on the matter. [50154/22]
Amharc ar fhreagraAs Minister for Transport, I have responsibility for policy and overall funding in relation to public transport; however, I am not involved in the day-to-day operations of public transport. The independent Transport Regulator, the National Transport Authority (NTA) has statutory responsibility for securing the provision of public passenger transport services nationally and for the scheduling and timetabling of those services.
In light of the Authority's responsibility in this area, I have forwarded the Deputy’s specific question, in relation to Go-Ahead Ireland No 17 and No 175 bus routes and Dublin Bus No 116 bus route, to the NTA for direct reply. Please advise my private office if you do not receive a reply within ten working days.
251. Deputy Michael Healy-Rae asked the Minister for Transport if the eligible age for a Leap card will be changed (details supplied); and if he will make a statement on the matter. [50168/22]
Amharc ar fhreagraAs Minister for Transport, I have responsibility for policy and overall funding in relation to public transport; however, I am not involved in the day-to-day operations of public transport. The National Transport Authority (NTA) has responsibility for the regulation of fares charged to passengers in respect of public transport services provided under public service obligation (PSO) contracts.
The Young Adult Card (YAC) was initially introduced on PSO services in May. Following extensive engagement between my Department, the NTA, and representatives from the commercial bus sector the initiative was broadened to include participating Commercial Bus Operators (CBOs) on the 4th of September. As a result, holders of a YAC or Student Leap Card can now avail of the 50% fare discount on both PSO and CBO services.
In relation to the issue of eligibility requirements for the YAC, I am happy to clarify that the NTA are widening the age rules of the Scheme to allow 16, 17, and 18-year-old students in third level education to apply for the Student Leap Card so that they can also avail of the discount. This is in line with the approach that has been taken with mature students who are in full-time third level education.
I am pleased to advise that the NTA have already commenced the technical work on this matter, which is scheduled to be completed in the coming weeks, at which point those third level students aged 16, 17, and 18 will be able to order a Student Leap Card and avail of the discount.
252. Deputy Paul Murphy asked the Minister for Transport if his attention has been drawn to the fact that in New South Wales, Australia, after holding a P2 licence for two years, one automatically receives a full NSW driving licence meaning that there is no driving test in order to obtain a full licence; if his attention has been further drawn to the difficulties that persons face when they have returned from New South Wales and they are asked to provide proof of passing a driving test in NSW; if he will ensure that the NDLS provides extra allowances to those in this situation by allowing them to obtain a full Irish licence without proof of test which is not possible to obtain from New South Wales; and if he will make a statement on the matter. [50249/22]
Amharc ar fhreagraIrish driver licensing law operates within EU law and is intended to ensure drivers on our roads meet high safety standards. The format of driving licences, categories of vehicles, and the standards to be met in driving tests to qualify for a licence are all set out at EU level.
All enquires relating to driver licensing are handled by the National Driver Licence Service, the provision of which I have delegated to the Road Safety Authority (RSA) under the relevant legislation. I have forwarded the Deputy's query to the RSA for direct reply. If he has not heard from the authority in 10 working days, I would ask that he contact my office directly.
253. Deputy Holly Cairns asked the Minister for Transport the number of dedicated spaces for breastfeeding and expressing breast milk in workplaces within his Department and the workplaces of public bodies and agencies under his remit, including a list of said buildings which do and do not have these facilities; and if he will make a statement on the matter. [50351/22]
Amharc ar fhreagraMy Department is committed to providing all appropriate and necessary supports to facilitate breastfeeding breaks for staff in the workplace. Such supports include access to suitable accommodation facilities and flexibility around their start and end of work times each day. Each of the offices of my Department has a private room which can accommodate for breastfeeding and expressing milk in the workplace.
Breastfeeding mothers are also entitled to paid breaks from work (one hour per day), or reduced daily working time (one hour per day) to facilitate breastfeeding or lactation.
My Department does, and will continue to, implement best practice to support parents in the workplace.
Agencies under my remit will respond to the Deputy directly regarding their arrangements within 10 working days.
254. Deputy Mary Lou McDonald asked the Minister for Finance if a centre (details supplied) is entitled to receive the temporary business energy support scheme. [49803/22]
Amharc ar fhreagra273. Deputy Niall Collins asked the Minister for Finance if he will address a matter in relation to the temporary business energy support scheme and the application to the charity sector (details supplied); and if he will make a statement on the matter. [49918/22]
Amharc ar fhreagraI propose to take Questions Nos. 254 and 273 together.
I indicated in my Budget speech that I would be introducing a Temporary Business Energy Support scheme (TBESS) to assist businesses with their energy costs over the winter months.The scheme is being designed to be compliant with the EU state aid temporary crisis framework and will need to be approved by the EU Commission in advance of making payments.
The TBESS will be open to businesses that carry on a Case I trade, are tax compliant and have experienced a significant increase in their natural gas and electricity costs. I understand that the centre to which Deputy McDonald refers is a registered charity. It is my intention that charities and sporting bodies registered for tax in respect of trading income will be included in the scope of the scheme. The scheme will be administered by the Revenue Commissioners and will operate on a self-assessment basis. Businesses will be required to register for the scheme and to make claims within the required time limits.
It is proposed that the scheme will operate by comparing the average unit price for the relevant bill period in 2022 with the average unit price in the corresponding reference period in 2021. If the increase in average unit price is more than 50% then the threshold has passed and the business is eligible for support under the scheme. A business who has not seen an increase of 50% over the period will not be eligible for the scheme.
Once eligibility criteria are met, the support for businesses will be calculated on the basis of 40% of the amount of the increase in the bill amount. A monthly cap of €10,000 per trade will apply and an overall cap will apply on the total amount a business can claim in accordance with the State Aid Temporary Crisis Framework.
Where a business meets all of the criteria for the scheme, they may apply for support under the scheme subject to the applicable caps.
The operational details of the scheme are being worked through by officials and will be available soon.
The Deputies will also note that in this Budget 2023 speech, the Minister for Public Expenditure and Reform acknowledged that not-for-profit and voluntary organisations in the Arts, Sports, Gaeltacht and the Community and Voluntary sector, are woven into the fabric of community life across Ireland, but they are very vulnerable to the severe impact of increased energy bills. As such, he is making €60 million available in 2022 to ease the pressures in these sectors. The framework for this assistance will be put in place in the next few weeks to ensure that they benefit this year.
255. Deputy Michael Healy-Rae asked the Minister for Finance his views on a matter (details supplied); and if he will make a statement on the matter. [50262/22]
Amharc ar fhreagraThe operation of the commercial vehicle roadworthiness testing system is the statutory responsibility of the Road Safety Authority. I have therefore referred the Deputy’s question to the Authority for direct reply.
I would ask the Deputy to contact my office if a response has not been received within ten days.
256. Deputy Eoin Ó Broin asked the Minister for Finance if there is a policy regarding the appropriate use of domestic flights in his Department and bodies under the aegis of the Department. [50120/22]
Amharc ar fhreagraMy Department has a dedicated Policy on all matters relating to official travel by staff of the Department and its Offices, including air travel. The Policy is framed on the relevant circulars and advice from the Department of Public Expenditure and Reform and reflects the general principle of achieving efficiency and value for money and minimising travel and subsistence costs. The Policy is regularly reviewed. The last such review was completed in March of this year.
In respect of the Agencies that come within my remit, they are statutorily independent in their functions and this is an operational matter for them.
257. Deputy Sorca Clarke asked the Minister for Finance if consideration will be given to increasing the rate of remote working relief in view of the increase in inflation and cost of living. [49451/22]
Amharc ar fhreagraThe Programme for Government includes a commitment to facilitate and support remote working. As part of the national remote working strategy: Making Remote Work, in 2021 the Tax Strategy Group (TSG) reviewed the tax arrangements for remote working in respect of both employees and employers. The paper is published on my Department’s website.
The TSG paper noted that changes to the tax arrangements for remote working may give rise to issues of deadweight loss and economic inefficiencies, as well as equity issues in the personal income tax system. The paper also noted that in the context of a whole of Government policy to facilitate and support remote working, it may be considered appropriate to enhance or amend the current tax arrangements in order to underline and reinforce public policy decisions in this area.
Taking these factors into consideration, as announced in Budget 2022, the tax arrangements for remote working were enhanced and formalised in line with Government policy to facilitate and support remote working. Accordingly, for the tax year 2022, an income tax deduction amounting to 30% of the cost of vouched expenses for electricity, heat and broadband in respect of those days spent working from home can be claimed by taxpayers.
The amount of the relief will depend on the particular circumstances of the remote worker in terms of the level of costs incurred and their marginal tax rate. However, this measure provides some relief for those with additional expenses arising from working from home, and at the same time it ensures that the traditional burden of employer related costs are not transferred from the employer to the State and the wider body of taxpayers. In addition, I would point out that, as the current deduction relates to a proportion of the cost of the relevant expenses, the amount that may be claimed will increase as those expenses increase. There are no immediate plans to further increase the tax relief for working from home.
With regard to cost of living increases, the Government is acutely aware of the cost pressures currently facing households and businesses and has responded to help alleviate some of this burden. A Budget package of €6.9 billion was recently announced, as well €4.1 billion of one-off measures, which included the provision of energy credits for all households. This is in addition to €3 billion of measures that were implemented before the recent Budget.
258. Deputy Richard Boyd Barrett asked the Minister for Finance if renters under a licence agreement will be entitled to the renters' tax credit; and if he will make a statement on the matter. [49452/22]
Amharc ar fhreagraOn Budget Day, I announced a €500 Rent Tax Credit which it is proposed will be claimable in respect of rent paid in 2022 and subsequent years to end-2025. The estimated cost of this measure in respect of each relevant year of assessment is €200 million.
The intention is that, in order for a person to be in a position to claim the credit in a year :
- the rent paid must be in respect of the person’s principal private residence,
- the person living in the rented property themselves, or their spouse/civil partner, must have paid sufficient rent and sufficient tax to avail of the credit,
- the tenancy must be registered with the Residential Tenancies Board (RTB), but only where this is already a legal requirement.
In the context of fully utilising the €500 tax credit, "sufficient rent" amounts to €2,500 in a year. For 2022, "sufficient tax" amounts to €3,900 (equivalent to the aggregate 2022 value of the Personal Tax Credit, the Employee/Earned Income Tax Credit and the proposed Rent Tax Credit). For 2023, "sufficient tax" amounts to €4,050 (equivalent to the aggregate proposed 2023 value of the Personal Tax Credit, the Employee/Earned Income Tax Credit and the Rent Tax Credit).
I understand that licence arrangements could exist, where, for example, a person is sharing with the owner of a property in a rent-a-room or digs type arrangement or where they are staying in rented accommodation at the invitation of a tenant.
In such circumstances, they may be entitled to claim the proposed rent tax credit but it is intended that this will be subject to compliance with the conditions in the first and second bullet points above. Other conditions may also apply, for example relating to the details that must be provided to Revenue in making a claim for the relief.
Qualification/compliance requirements are continuing to be worked through at present and the aim is to have them finalised in the coming days in the context of the preparation of the Finance Bill.
259. Deputy John Paul Phelan asked the Minister for Finance when the Disabled Drivers Medical Board of Appeal will be set up and operating again (details supplied); the way in which the huge backlog of applicants will be dealt with in a timely manner; and if he will make a statement on the matter. [49470/22]
Amharc ar fhreagra261. Deputy Dara Calleary asked the Minister for Finance when the Disabled Drivers Appeals Board will be re-established (details supplied). [49530/22]
Amharc ar fhreagraI propose to take Questions Nos. 259 and 261 together.
The Disabled Drivers and Disabled Passengers Scheme provides relief from Vehicle Registration Tax and VAT on an adapted car, as well as an exemption from motor tax and an annual fuel grant.
The Scheme is open to severely and permanently disabled persons as a driver or as a passenger and also to certain charitable organisations. In order to qualify for relief, the applicant must hold a Primary Medical Certificate issued by the relevant Senior Area Medical Officer (SAMO) or a Board Medical Certificate issued by the Disabled Driver Medical Board of Appeal. To qualify for a Primary Medical Certificate an applicant must be permanently and severely disabled, and satisfy at least one of the six medical criteria.
The Minister has no role in relation to the granting or refusal of PMCs and the HSE and the Medical Board of Appeal must be independent in their clinical determinations.
Two Expression of Interest campaigns have been held seeking suitable candidates for the Board. The Department of Health leads on all actions and tasks with respect to the Expression of Interest Campaigns. Department of Finance officials provide support to the Department of Health in this matter.
The first campaign closed on 29th April. As there were insufficient suitable candidates arising from the first campaign, a second round was issued with a closing date of 5th July 2022. From these, three suitable candidates have been identified and are being Garda vetted; it is hoped to interview two further candidates very shortly. Five members are legislatively required for a functional Board with a quorum of three needed for any appeal hearing.
Once these processes have been completed for all candidates the Minister for Finance will then be in a position to appoint any suitable Department of Health nominee to the Board. When the new Board is up and running, it will consider the best way of ensuring outstanding appeals are addressed as quickly as possible.
Requests for appeal hearings can be sent to the DDMBA secretary based in the National Rehabilitation Hospital. New appeal hearing dates will be issued once the new Board is in place. Assessments for the primary medical certificate, by the HSE, are continuing to take place.
260. Deputy Josepha Madigan asked the Minister for Finance if his Department is considering the expansion of the cycle-to-work scheme to the self-employed; and if he will make a statement on the matter. [49507/22]
Amharc ar fhreagraSection 118(5G) of the Taxes Consolidation Act 1997 (TCA 1997) provides for the Cycle to Work scheme. This scheme provides an exemption from benefit-in-kind (BIK) where an employer purchases a bicycle and associated safety equipment up to a maximum of €1,250 (€1,500 in the case of e-bikes), for an employee to use, in whole or in part, to travel to work. Safety equipment includes helmets, lights, bells, mirrors and locks but does not include child seats or trailers.
From 1 August 2020, this exemption was increased from €1,000 to €1,250 for expenditure incurred by an employer in connection with the provision of a bicycle and/or bicycle safety equipment in respect of any one employee. A higher exemption limit of €1,500 applies in the case of the provision of an electric bike (which may also include bicycle safety equipment). These increases and the change to a 4-year period from a 5-year period were in line with the commitment made in the Programme for Government.
Under section 118B TCA 1997 an employer and employee may also enter into a salary sacrifice arrangement under which the employee agrees to sacrifice part of his or her salary, in exchange for a bicycle and related safety equipment.
Benefit-in-kind is a charge to tax that applies where an employer provides an employee with a benefit such as a bicycle, car or accommodation. Therefore, the Cycle to Work scheme is only applicable where the bicycle and safety equipment is provided by an employer to either a director or someone in its employment and thus, where an employer-employee relationship does not exist, for example, in the case of self-employed, retired individuals, or those in receipt of social welfare payments, such individuals cannot qualify for the scheme. Likewise, salary sacrifice arrangements may only be entered into between an employer and a director or employee.
Further guidance regarding the Cycle to Work Scheme and salary sacrifice arrangements can be found on Revenue’s website.
262. Deputy Cormac Devlin asked the Minister for Finance if his attention has been drawn to the difficulties that the owners of dwellings with thatched roofs are having securing home insurance; if he will raise the matter with the insurance sector to seek an appropriate solution; and if he will make a statement on the matter. [49565/22]
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 prevents Member States from doing so.
Minister Fleming is currently undertaking a round of high-level engagements with stakeholders in the insurance sector, and is raising with them the issue of thatched roof properties, amongst other ‘pinch point’ areas of cover. Brokers Ireland has previously informed this Department that it has a dedicated information service for people having insurance issues with their thatch roof properties and has established a special email address to deal with these queries, which is thatchedroofqueries@brokersireland.ie.
Separately, the Deputy may also be aware that the Department of Housing, Local Government and Heritage is currently undertaking a study into the question of insurance for thatched roof properties, and that owners of such properties have been invited to contribute to this. All queries regarding this project should be directed to the Department of Housing, Local Government and Heritage. Officials in my Department are continuously engaging with insurance providers and are monitoring ongoing developments in this specific area.
Finally, I would like to take this opportunity to assure the Deputy that securing a more sustainable and competitive market through deepening and widening the supply of insurance in Ireland remains a key policy priority for this Government, and that it is my intention to continue to work with my colleagues to ensure that implementation of the Action Plan for Insurance Reform can have a positive impact on the affordability and availability of insurance across all sectors in the economy.
263. Deputy Pádraig O'Sullivan asked the Minister for Finance his views on a matter (details supplied) in relation to the sale of coal; if his attention has been drawn to the fact that this is adversely impacting a specific retail industry; and if he will make a statement on the matter. [49573/22]
Amharc ar fhreagraRevenue has responsibility for administering and enforcing Solid Fuel Carbon Tax (SFCT) which applies to coal, peat, and peat products when they are first supplied in the State. There is no differentiation between different types of coal with regard to the rate of SFCT that applies. This means that smokeless, low smoke, and smoky coal all attract the same SFCT rate, currently €107.98 per tonne. SFCT rates are available on Revenue’s website at www.revenue.ie/en/companies-and-charities/excise-and-licences/energy-taxes/solid-fuel-carbon-tax/rate-of-tax.aspx. VAT at 13.5% is also applicable to coal and this is applied on top of the consideration and SFCT.
SFCT is not an import duty and neither the movement of solid fuel into the State, nor its physical presence in the State, generate a liability to SFCT; it is not until solid fuel is first supplied within the State that SFCT becomes liable. Under the Treaty on the Functioning of the European Union, Revenue cannot impose any barriers to the movement of solid fuel into the State from other Member States or Northern Ireland. This means that solid fuel coming into the State from Northern Ireland is not subject to cross-border movement controls typical of the harmonised excise regimes: mineral oils, tobacco and alcohol.
Where a solid fuel supplier based in the State sources some or all of their solid fuel supplies from outside the State, they must register with Revenue to account for and pay SFCT. Where a supplier based outside the State brings solid fuel into the State for supply direct to consumers, they must register with Revenue for SFCT. Similarly, suppliers based outside the State who deliver solid fuel into the State to a private individual, must register with Revenue and pay the tax. This means that suppliers from outside the State, including Northern Ireland, who take orders for delivery to private individuals in the State are liable for SFCT and must register with Revenue. Approximately 5% of solid fuel suppliers registered for SFCT are based in Northern Ireland.
Where an individual personally purchases solid fuel outside the State and accompanies that solid fuel into the State, they do not have an SFCT liability provided the fuel is for their own private use. However, if that individual, instead of using the solid fuel themselves, supplies it to another person in the State, they will have made a first supply and will be liable to pay SFCT and must register with Revenue accordingly.
Currently in Northern Ireland there is no carbon tax on solid fuel and this factor combined with that jurisdiction's lower VAT rate give rise to price differentials which can incentivise the sourcing of solid fuel from Northern Ireland. Revenue is aware of the concerns expressed by suppliers about cheaper coal entering the State from Northern Ireland. Where a person suspects, or has evidence, that a solid fuel supplier, based in the State or in NI (or, indeed, elsewhere), is not paying SFCT on first supplies of solid fuel they should report any information to Revenue, and this can be done by contacting Revenue’s Confidential Freephone 1800 295 295. As is the norm with all self-assessed taxes, Revenue addresses non-compliance with SFCT law on a risk basis and, where appropriate, utilises relevant powers of enforcement to collect the tax. However, as already outlined Revenue cannot impose any barriers to the movement of solid fuel into the State from other Member States or Northern Ireland.
Bringing solid fuels that do not comply with Ireland’s environmental standards into the State does not constitute a Revenue offence. While Revenue (as the tax authority) cannot impose any obstacles to the free movement of solid fuels into the State from other Member States and Northern Ireland, such imports are open to challenge by Local Authorities (as the relevant authority responsible for enforcing environmental standards) if the fuel does not meet environmental standards in this State. I understand that placing such fuels on the market, distributing them, selling them and burning them in the State are actions that must comply with a regulatory regime which operates under the Air Pollution Act 1987. Last year the Minister for the Environment, Climate and Communications, Mr. Eamon Ryan T.D., announced the introduction of significant enhancements to the regulatory framework dealing with domestic solid fuels from October 2022. The Minister indicated that his Department would support local authorities to ensure implementation of the most effective model of environmental enforcement for the enhanced regulatory regime.
While Revenue does not have a direct role in relation to these environmental enforcement matters Revenue has participated in several joint operations with other agencies including Local Authority solid fuel inspection teams, with a view to checking for compliance across several tax headings, including SFCT.
264. Deputy Niall Collins asked the Minister for Finance if he will address a query raised in correspondence by a person (details supplied); and if he will make a statement on the matter. [49593/22]
Amharc ar fhreagra277. Deputy Thomas Pringle asked the Minister for Finance the rationale to justify the benefit-in-kind rise in budget 2023; and if he will make a statement on the matter. [50143/22]
Amharc ar fhreagra280. Deputy Pádraig O'Sullivan asked the Minister for Finance if he will agree to a full review of the benefit-in-kind tax system; if he will defer the proposed budget 2023 changes until the review is undertaken; and if he will make a statement on the matter. [50281/22]
Amharc ar fhreagraI propose to take Questions Nos. 264, 277 and 280 together.
At the outset, the Deputy should note that recent Government policy has focused on strengthening the environmental rationale behind company car taxation. Until the changes I brought in as part of the Finance Act 2019, Ireland’s vehicle benefit-in-kind regime was unusual in that there was no overall CO2 rationale in the regime. This is despite a CO2 based vehicle BIK regime being legislated for as far back as 2008 (but never having been commenced).
In Finance Act 2019, I legislated for a CO2-based BIK regime for company cars from 1 January 2023. From that date the amount taxable as BIK remains determined by the car’s original market value (OMV) and the annual business kilometres driven, while new CO2 emissions-based bands will determine whether a standard, discounted, or surcharged rate is taxable. The number of mileage bands is reduced from five to four. EVs will benefit from a preferential rate of BIK, ranging from 9 – 22.5% depending on mileage. Fossil-fuel vehicles will be subject to higher BIK rates, up to 37.5%. This new structure with CO2-based discounts and surcharges will incentivise employers to provide employees with low-emission cars.
I am aware there have been arguments surrounding the mileage bands in the new BIK structure as they can be perceived as incentivising higher mileage to avail of lower rates, leading to higher levels of emissions. The rationale behind the mileage bands is that the greater the business mileage, the more the car is a benefit to the company rather than its employee (on average); and the more the car depreciates in value, the less of a benefit it is to the employee (in years 2 and 3) as the asset from which the benefit is derived is depreciating faster. Mileage bands also ensure that cars more integral to the conduct of business receive preferential tax treatment.
I believe that better value for money for the taxpayer is achieved by curtailing the amount of subsidies available and building an environmental rationale directly into the BIK regime. It was determined in this context that reforming the BIK system to include emissions bands provides for a more sustainable environmental rationale than the continuation of the current system with exemptions for electric vehicles (EVs). This will bring the taxation system around company cars into step with other CO2-based motor taxes as well as the long-established CO2-based vehicle BIK regimes in other member states.
In addition to the above and in light of government commitments on climate change, Budget 2022 extended the preferential BIK treatment for EVs to end 2025 with a tapering mechanism on the vehicle value threshold. This BIK exemption forms part of a broader series of very generous measures to support the uptake of EVs, including a reduced rate of 7% VRT, a VRT relief of up to €5,000, low motor tax of €120 per annum, SEAI grants, discounted tolls fees, and 0% BIK on electric charging.
Finally, it should be noted that this new BIK charging mechanism was legislated for in 2019 and was announced as part of Budget 2020. I am satisfied that this has provided a sufficient lead in time to adapt to this new system before its implementation in 2023. Therefore there are no plans to review it.
