Thursday, 10 Nov 2022

Written Answers Nos. 102-120

Business Supports

Ceisteanna (102)

Aengus Ó Snodaigh

Ceist:

102. Deputy Aengus Ó Snodaigh asked the Minister for Finance the supports that can be given to companies that may be required to repay EWSS or TWSS payments which they received correctly during the pandemic and which are now being recalled, due to a more forensic application of the rules of qualification for such payments, but the repayment of same would lead to the closure and loss of jobs in such companies; and if he will make a statement on the matter. [53837/22]

Freagraí scríofa

Minister for Finance

The Temporary Wage Subsidy Scheme (TWSS) and the Employment Wage Subsidy Scheme (EWSS) were economy-wide supports that played a central role in helping to maintain the link between employers and employees between March 2020 and May 2022. TWSS provided supports to over 689,000 employees linked to over 67,000 employers throughout the scheme. EWSS provided supports to almost 52,000 employers to secure employment for nearly 746,000 employees.

As regards eligibility for the schemes, an employer was required to demonstrate, to the satisfaction of Revenue, that its business experienced a decline of turnover or customer order values of 25% and 30% for TWSS and EWSS respectively, and that the decline in trade was as a result of a disruption to business caused by the COVID-19 pandemic. Furthermore, the employer was required to be tax compliant.

The schemes operated on a on a self-assessment basis, with employers claiming the subsidies through their payroll submissions to Revenue. Detailed guidance was provided on both schemes. It would be incorrect to suggest that businesses received the support correctly and subsequently had the supports recalled.

In view of the substantial amounts of public money invested in these schemes, Revenue undertook a programme of compliance checks to ensure that claimant employers were properly eligible and complied fully with scheme requirements. Generally, these checks identified a very high level of compliance but, in both schemes, it was necessary to recover subsidy payments for which employers were not eligible from a small proportion of businesses.

Revenue does not seek repayment of subsidies from employers who met the eligibility criteria attaching to the various schemes. I am advised that Revenue’s compliance programmes review the records available at the time the claims were submitted to ensure projections were prepared on a reliable basis and in line with legislation and guidance. Recoupment occurs only where review procedures show evidence of overpayment or fraud.

In October 2022, Revenue announced an important and significant extension to the Debt Warehousing scheme in light of the current challenging economic situation for businesses. Under the scheme, businesses with warehoused debt were due to enter into an arrangement with Revenue to commence repaying that debt by the end of this year (or by 1 May 2023 for those subject to the extended deadline). Given the current economic uncertainty, Revenue has extended that timeline to 1 May 2024. This extension also applies to EWSS and TWSS repayments and means that businesses no longer have the challenge of making arrangements to repay their warehoused debt (including EWSS and TWSS repayments) until 1 May 2024.

For those businesses who do not qualify for the Debt Warehousing scheme and are encountering difficulties repaying any EWSS/TWSS overpayments, Revenue will agree flexible phased payment arrangements to allow them pay off their debt in instalments over a period of time. Revenue will always work proactively with businesses towards finding tailored solutions which are flexible and take account of the financial circumstances of each business concerned.

Business Supports

Ceisteanna (103, 106)

Ged Nash

Ceist:

103. Deputy Ged Nash asked the Minister for Finance the number of applicants and successfully approved recipients of the temporary business energy support scheme (TBESS); if he plans to attach any conditions on companies accessing the scheme, for example, restricting the payments of dividends and senior management bonuses to firms in receipt of funds under the scheme; and if he will make a statement on the matter. [55835/22]

Niamh Smyth

Ceist:

106. Deputy Niamh Smyth asked the Minister for Finance if the TBESS will open by end of this month; if payments will be made before the end of 2022; and if he will make a statement on the matter. [55802/22]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 103 and 106 together.

Details of the new Temporary Business Energy Support Scheme (TBESS) are set out in Finance Bill 2022, which will be discussed at Committee Stage later today. The TBESS will be available to tax compliant businesses carrying on a trade or profession the profits of which are chargeable to tax under Case I or Case II of Schedule D where they meet the eligibility criteria and to certain sporting bodies and charities. The scheme will operate on a self-assessment basis.

The TBESS is subject to State aid approval and payments cannot be made until this has been granted.

Subject to receiving State aid approval, it is expected that the TBESS system will open for applications over the weekend of 26 November at which time businesses can register for and make a claim under the scheme using Revenue Online Service (ROS).

Revenue have published comprehensive guidelines on their website on the operation of the scheme.

The scheme is a broad based scheme designed to help businesses with increasing energy prices. Including specific conditionality as proposed by the Deputy would prove difficult to frame in legislation and could open the possibility of legal challenge. It could also be difficult to ensure that a condition like non-payment of dividends would not just result in dividends being delayed until after support payments are received. Similar issues could arise with deferred bonuses.

There could also be State aid issues with some such restrictions. The EU Temporary Crisis Framework specifically provides that “Measures targeting commercial energy users do not constitute State aid, provided such measures are of a general nature.”

Foreign Direct Investment

Ceisteanna (104)

Richard Bruton

Ceist:

104. Deputy Richard Bruton asked the Minister for Finance if the EU taxonomy has yet started to influence the pattern of investment in Ireland; and if he will make a statement on the matter. [55848/22]

Freagraí scríofa

Minister for Finance

I would like to thank the Deputy for this question; as he is probably aware, the EU Taxonomy is not yet fully agreed. While the first two environmental goals, namely adaption and mitigation, have been completed and brought into force the remaining four, that is pollution, water/marine, circular economy and biodiversity, remain to be negotiated and agreed, which I hope will occur in the near future.

For the remaining four goals, negotiations are ongoing in Council, and my Departmental officials are working closely with the Commission and other Member States, including examining the technical input from the Platform for Sustainable Finance. There are also likely to be some areas where finding agreement on sustainability parameters will be difficult, such as for agriculture.

Additionally, the Platform has produced a draft report on the social element of ESG, and there have been initial discussions on the possibility of expanding the Taxonomy to include transitional elements so that it might cover intermediate or transition performance in certain difficult-to-decarbonise sectors.

Reporting on alignment against the adaptation and mitigation elements of the taxonomy started this year for financial services firms and listed corporates but it is too early to tell whether it has demonstrably affected investment in Ireland or elsewhere, although we have seen increased investment in so-called Article 9 sustainable investment funds.

There are some early indications of the state-of-play on sustainable investment: recent research by the European Commission-Joint Research Centre and the University of Zurich estimates that the level of taxonomy alignment for various financial institutions across Europe varies from around 0.8% for banks to 4.8% for insurers and 3.2% for investment funds.

These are undoubtedly low starting points although the research focuses only on larger firms – so these figures will rise as the taxonomy expands to cover additional environmental goals and additional sectors. We also expect these figures to increase as directly comparable taxonomy-aligned data become available as more financial institutions and corporates begin to report.

Defective Building Materials

Ceisteanna (105)

Francis Noel Duffy

Ceist:

105. Deputy Francis Noel Duffy asked the Minister for Finance if he will consider a tax rebate for homeowners impacted by defective properties. [46887/22]

Freagraí scríofa

Minister for Finance

As the Deputy may be aware, the Minister for Housing, Local Government and Heritage, established an Independent Working Group to Examine Defects in Housing. Officials from my Department participated in this Working Group.

The objectives of the group were to identify the scope of relevant significant defects in housing, to evaluate the scale of housing affected, to propose a means of prioritising defects, to evaluate the cost of remediation, to recommend appropriate mechanisms for resolving defects and, to consider financing options in line with the Programme for Government commitment to identifying options for those impacted by defects to access low-cost, long-term finance.

The Report of the Working Group was published on 28 July last. It is clear from that document that the process of remediation is likely to take many years to complete, that the estimated potential costs of such remediation are very substantial and that appropriate actions will need to be prioritised.

The report sets out a number of funding options of which taxation measures are but one approach. It is also clear from the report that further work needs to be undertaken to assess the relative merits of each funding option.

Any proposals for tax expenditure measures would need to be assessed in accordance with my Department's Tax Expenditure Guidelines. These make clear that it is important that any policy proposal which involves tax expenditures should only occur in limited circumstances, for example where there are demonstrable market failures. In particular, they provide that a tax-based incentive should only be considered where it would be more efficient than a direct expenditure intervention. The introduction of such measures is a matter that would fall to be considered in the context of the annual Budget and Finance Bill.

Against this background, it would be premature at this point to focus in on a tax rebate for homeowners, as mentioned by the Deputy.

Question No. 106 answered with Question No. 103.

Business Supports

Ceisteanna (107)

Jennifer Murnane O'Connor

Ceist:

107. Deputy Jennifer Murnane O'Connor asked the Minister for Finance if the temporary business energy support scheme to help businesses with their energy costs will be applied to creches and montessori schools to support their rising energy costs this winter; and if he will make a statement on the matter. [50110/22]

Freagraí scríofa

Minister for Finance

Details of the new Temporary Business Energy Support Scheme (TBESS) are set out in Finance Bill 2022. The scheme will provide support to qualifying businesses in respect of energy costs relating to the period from 1 September 2022 to 28 February 2023. The scheme is 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 available to tax compliant businesses carrying on a trade or profession the profits of which are chargeable to tax under Case I or Case II of Schedule D where they meet the eligibility criteria. Charities and sporting bodies that carry on certain activities which would be chargeable to tax under Case I or II of Schedule D but for an available exemption are included in the scope of the scheme. The scheme will operate on a self-assessment basis.

A business in the childcare sector would generally be regarded as carrying on a trade or profession chargeable to tax under Case I or Case II of Schedule D, and therefore would be an eligible business for the purposes of the scheme.

For example, a business involved in childminding will generally be regarded as trading and therefore taxable under Case I of Schedule D whereas a specialist Montessori school could be regarded as carrying on a trade or a profession depending on the facts and circumstances. In either case, the profits are chargeable to tax under Case I or II of Schedule D and therefore would be within scope of the TBESS where all the eligibility criteria are met.

Any amount charged on an energy bill for a claim period that is not expended wholly and exclusively for the purpose of the trade or profession must be deducted from the relevant energy bill amount for the claim period when calculating the eligible cost. This could be the case where, for example, a single electricity connection supplies both the business and a domestic dwelling.

Tax Yield

Ceisteanna (108, 139)

Jennifer Carroll MacNeill

Ceist:

108. Deputy Jennifer Carroll MacNeill asked the Minister for Finance if he will detail where tax revenues stood by the end of October 2022 or the most recent available month in 2022; the way in which it differs from 2021; and if he will make a statement on the matter. [55590/22]

Neale Richmond

Ceist:

139. Deputy Neale Richmond asked the Minister for Finance if he will report on tax receipts and revenues to end-October 2022; and if he will make a statement on the matter. [55874/22]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 108 and 139 together.

Tax revenues to end-October stood at €63.9 billion, €13 billion or over 25 per cent ahead of the same period last year. With the notable exception of excise duty receipts, which are negatively impacted by Government policy to address the cost of living challenge, virtually all revenue streams are up on last year. Income tax receipts were up by €3.2 billion, or nearly 16 per cent, and VAT was up by €2.9 billion, or 23 per cent. While the year-on-year comparison is exaggerated due to the public health restrictions that were in place last year, this is nonetheless a clear sign of the strength of our economic recovery.

However, as the Deputy will be aware, the headline fiscal position is boosted by the continuing surge in corporation tax. These receipts now stand at €16.2 billion, up by €6.6 billion on last year. While this is, in many respects, welcome, we know that these receipts are highly volatile and should not be relied upon to fund permanent expenditure. Indeed, I do not expect much of the windfall corporate tax received in recent months to be replicated next year.

As part of Budget 2023, the Government published a new metric, the GGB* or underlying general government balance, which presents the fiscal position if estimates of windfall corporation tax were excluded. My Department estimates that as much as €9 billion in corporation tax receipts this year could be classified as ‘excess’: in other words, they are not linked to developments in the domestic economy. Excluding these volatile receipts would mean that, instead of a modest budgetary surplus this year, we would be facing a very significant deficit.

To mitigate this risk, I announced on Budget Day that we will commit part of this excess - €2 billion this year and €4 billion next year – to the National Reserve Fund. This will allow us to take advantage of these receipts while they last to rebuild our fiscal buffers and ensure we are prepared to meet future economic challenges, while not repeating the mistakes of the past by allowing volatile tax revenues to become part of the permanent expenditure base.

Finally, I would caution that while current trends in tax revenue are undoubtedly positive, the overall Exchequer figures do not yet fully reflect the impact of the Budget 2023 cost of living tax and expenditure measures as well as the planned transfer of €2 billion to the National Reserve Fund, which will lead to a lower Exchequer surplus by the end of the year.

Business Supports

Ceisteanna (109)

Holly Cairns

Ceist:

109. Deputy Holly Cairns asked the Minister for Finance if he will ensure the temporary business energy support scheme is modified to enable SMEs to claim support for energy bills relating to the July and August 2022 period. [53861/22]

Freagraí scríofa

Minister for Finance

Details of the new Temporary Business Energy Support Scheme (TBESS) are set out in Finance Bill 2022. The aim of the scheme is to support qualifying businesses with their energy costs for the winter period and will run from 1 September 2022 to 28 February 2023. The scheme is 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 available to tax compliant businesses carrying on a trade or profession the profits of which are chargeable to tax under Case I or Case II of Schedule D where they meet the eligibility criteria. Charities and sporting bodies that carry on certain activities which would be chargeable to tax under Case I or II of Schedule D but for an available exemption are included in the scope of the scheme. The scheme will operate on a self-assessment basis and will be administered by the Revenue Commissioners.

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.

Once eligibility criteria are met, the support 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, rising to a maximum of €30,000 per month in certain circumstances. There is also an overall cap on what an undertaking can claim as set out in the Temporary Crisis Framework.

The Government and I have always recognised that it is not possible to fully mitigate the increase in energy prices incurred by businesses carrying out a trade or profession. The scheme has been designed to assist businesses with their energy costs over the winter months and I do not intend backdating it to cover energy bills earlier in the year.

Vacant Properties

Ceisteanna (110)

Richard Boyd Barrett

Ceist:

110. Deputy Richard Boyd Barrett asked the Minister for Finance the basis on which his Department set the new vacant home tax at three times the value of the LPT; his views on whether it will be adequate to bring vacant homes back into use; and if he will make a statement on the matter. [55850/22]

Freagraí scríofa

Minister for Finance

As the Deputy is aware, the Vacant Homes Tax (VHT) is a new measure announced in Budget 2023, which aims to increase the supply of homes for rent or purchase to meet demand. Further detail on this measure is set out in the Finance Bill which was published on 20 October.

As stated in my Budget speech, this measure aims to increase the supply of homes for rent or purchase, rather than raise revenue. In developing a new tax, an important consideration is simplicity, it is important to ensure that the tax is easy to understand and to administer. This is why I chose to set it at a multiple of a property’s basic local property tax charge as the LPT system is well understood. The purpose of the VHT is to encourage behaviour change. Accordingly, the rate should be set at a level that will influence property’s owner’s decision making. I believe that a tax charged at three times a property’s basic local property tax charge represents a considerable financial penalty to those who leave properties vacant, and will incentivise property owners to bring such properties back into use.

The rate means that, for example, the owner of a vacant residential property valued at €250,000 would face a VHT charge of €675 in addition to their annual LPT charge of €225.

The owner of a property valued at €400,000 would face a VHT charge worth €1,215, in addition to their annual LPT charge of €405, while the owner of a property valued at €500,000 would face a VHT charge of €1,485 in addition to their annual LPT charge of €495.

While a higher rate would mean a greater yield, the policy intent of a vacant homes tax is not to raise revenue. In setting the appropriate rate for the tax, I believe that care must be taken to get the balance right between achieving the objective of encouraging the use of available housing, without excessively penalising a limited group of property owners.

As this is a new measure, it is important to see how the tax operates after coming into effect, and then make an assessment as to whether it is working. My Department will monitor the tax and if it is not considered to be effective in bringing more properties into use, then I will have no hesitation in reviewing the measure including the rate.

Housing Provision

Ceisteanna (111)

Richard Bruton

Ceist:

111. Deputy Richard Bruton asked the Minister for Finance the way in which the funding model for housing has evolved since the financial crash; and if finance remains a constraint on reaching the Government’s housing targets. [55847/22]

Freagraí scríofa

Minister for Finance

The Irish funding landscape has undergone significant change since the Global Financial Crisis in 2008. In order to address the current imbalance between supply and demand of housing across all tenure types, the Government's Housing for All plan aims to significantly increase the supply of housing to an average of 33,000 per year over the next decade.

While the plan is backed by unprecedented State investment of over €4bn per annum, the Government cannot deliver on this programme alone. The only way we can deliver housing at the substantial scale we need is by also attracting private capital to the market, alongside our public investment.

Through modelling undertaken by the Department of Finance in December 2021, it is estimated that €12 billion of development funding per annum, comprising both debt and equity, will be required to develop the Housing for All target of an average of 33,000 homes per year. Of this €12 billion per annum, an estimated €10 billion will be required from private capital sources.

Given recent withdrawals from the banking market, there are fewer retail banks now lending for property development in Ireland than was previously the case. Domestic banks set risk limits around the type and nature of lending activity, resulting in more selective and prudent lending practices. This approach is also influenced by improved risk governance and legacy exposures from the Global Financial Crisis.

It is not desirable that domestic banks provide senior debt at unsustainable levels and levels of debt should appropriately reflect the risk profile of development projects. Therefore, appropriate levels of risk capital from a number of sources is essential for a sustainable functioning of the banking sector.

To help address a shortfall of debt finance available for the construction of residential housing, the Government established Home Building Finance Ireland in 2018. To end of June 2022, HBFI has approved €1,156m of funding, across 20 counties, supporting the delivery of 3,229 homes and continues to support residential delivery, responding to demand, through its agile business model.

The number of alternative lenders has also grown in the Irish funding landscape in recent years, providing an important source of debt funding for residential development.

In relation to equity, in the aftermath of the Global Financial Crisis, the Irish developer community has, in the main, been more equity constrained, requiring private equity partners to support their development activities.

In general, international investors are often transient and securing embedded sources of risk capital can be challenging. Therefore, a stable, consistent and transparent policy environment is key to supporting private investment in housing.

As a result, we will continue to attract and welcome inward investment to our housing market, as we have successfully done with investment in other sectors of our economy. This private and patient capital coming from well-established investors such as pension funds is a normal facet of housing investment in many of our European neighbours and beyond.

Through the implementation of the Housing for All strategy, the Government plans to increase the supply of housing to an average of 33,000 per year over the next decade. This is an ambitious plan which will provide increased housing supply and affordability.

Vehicle Registration Tax

Ceisteanna (112)

Denis Naughten

Ceist:

112. Deputy Denis Naughten asked the Minister for Finance if he will review section 38 of the Finance Act 2018, which removed the VAT on the VRT repayment scheme for the car hire industry; and if he will make a statement on the matter. [54959/22]

Freagraí scríofa

Minister for Finance

Vehicle Registration Tax (VRT) was introduced by the Finance Act 1992 with effect from 1 January 1993. Unlike its predecessor – Motor Vehicle Excise Duty, which was charged on the VAT-exclusive value of a vehicle – the new VRT on a passenger car was chargeable on its Open Market Selling Price, which, in effect, is a VAT-inclusive value.

Under the rules for Value-Added Tax (VAT), certain businesses can recover the input VAT on their cars. The introduction of the new VRT in 1993 meant that such businesses would incur VRT on the VAT-inclusive value of cars they acquired, although they were entitled to recover the VAT itself under the VAT code. To mitigate this situation, Section 134(7) of the VRT legislation provided a relief to allow a partial repayment of VRT in relation to passenger cars acquired by vehicle leasing or hiring businesses or for providing driving lessons, which were entitled to a VAT deduction in respect of the cars. At the time of its introduction, the relief provided parity for such businesses with their pre-1993 cost of supplying a passenger car for hire or lease or driving instruction.

However, after 25 years, it was considered that there was no longer a compelling rationale for maintaining parity with the pre-1993 system for a small cohort of businesses who benefitted from the relief. Also, the VRT charging structure and rates had changed considerably over the period; following the introduction of emissions-related VRT rates in 2008, anyone registering a new car could hugely reduce their VRT charge by choosing to purchase a lower-emitting vehicle of the same value.

Therefore, section 38 of the Finance Act 2018 was introduced to amend section 134 of the Finance Act 1992 by ceasing to allow VRT repayments in respect of the VAT element of the charge for any cars registered after 1 January 2019, and by ceasing the repayment altogether from 1 April 2019.

I have no plans to review this provision.

Real Estate Investment Trusts

Ceisteanna (113)

Pearse Doherty

Ceist:

113. Deputy Pearse Doherty asked the Minister for Finance the assessment his Department has made regarding the significant fall in dividend withholding tax paid by Irish real estate funds in 2021; the proposals his Department is considering to ensure Irish real estate funds are taxed equitably; and if he will make a statement on the matter. [55911/22]

Freagraí scríofa

Minister for Finance

I am aware that there has been a reduction in withholding tax paid by Irish Real Estate Funds (IREFs) in 2021 in respect of taxable events that occurred in accounting periods ended in 2020, relative to the amount paid in the preceding year. Revenue is currently undertaking a review to identify the reason(s) for this change. I am advised that the initial focus of the review is to analyse the information contained in the 2020 IREF Financial Statements, IREF Withholding tax Returns and Form 1 (IREFs) Income tax returns. The review encompasses the consideration of various risk factors, and a key focus is the identification of cases for compliance interventions to ensure perceived risks are properly and robustly addressed. The analysis involves detailed examination of tax returns and financial statements for a number of years and will include a review of the transactions undertaken by IREFs and of distributions made, to ascertain if distributions have been treated in accordance with the legislative provisions. If, as part of the review, possible non-compliance with the relevant legislation is identified, Revenue will undertake appropriate compliance interventions. In addition, should any deficiencies in the legislative provisions be identified, they will be brought to the attention of my Department. Separately and more broadly, the Deputy will be aware that I have welcomed a recommendation of the Commission on Taxation and Welfare in its recently published report, “Foundations for the Future: Report of the Commission on Taxation and Welfare”, to undertake a review of the Real Estate Investment Trust and Irish Real Estate Fund regimes. Both regimes have been part of our property investment ecosystem for a number of years and I believe it is now time to take stock of the impact of both structures on the property market Accordingly, I intend to commence a review to consider those structures and how best they can continue to support housing policy objectives. The parameters of this review and timelines have yet to be fully decided, but it is expected to commence early in the New Year.

Primary Medical Certificates

Ceisteanna (114, 118, 120, 122, 141, 155)

Niamh Smyth

Ceist:

114. Deputy Niamh Smyth asked the Minister for Finance if he will provide an update on resumption of the primary medical certificate appeals process; and if he will make a statement on the matter. [55801/22]

Pádraig O'Sullivan

Ceist:

118. Deputy Pádraig O'Sullivan asked the Minister for Finance if he will provide an update on the review of the disabled drivers and disabled passengers scheme; when he expects the review to be completed; the engagement he or his Department have had with the Department of Children, Disability, Equality, Integration and Youth in this regard; and if he will make a statement on the matter. [55674/22]

Pearse Doherty

Ceist:

120. Deputy Pearse Doherty asked the Minister for Finance the current status of the disabled drivers medical board of appeal; the number of unassessed appeals before the board; the status of the review of the disabled drivers and passengers scheme; and if he will make a statement on the matter. [55910/22]

Denis Naughten

Ceist:

122. Deputy Denis Naughten asked the Minister for Finance the plans, if any, he has to amend the disabled drivers and disabled passengers scheme; and if he will make a statement on the matter. [54960/22]

Rose Conway-Walsh

Ceist:

141. Deputy Rose Conway-Walsh asked the Minister for Finance the number of persons with disabilities who are awaiting an appeal hearing with the disabled drivers medical board of appeal; the length of time applicants have been waiting, by county or CHO; if there is an indicative date for the resumption of the DDMBOA while the NDIS transport working group carries out its review of transport options for persons with disabilities and develops next-step proposals; if emergency additional funding will be made available if the criteria are expanded; if the working group will consider expanding the scheme to include persons with Parkinson’s disease or multiple sclerosis; and if he will make a statement on the matter. [55899/22]

Catherine Connolly

Ceist:

155. Deputy Catherine Connolly asked the Minister for Finance if he will provide an update on the review of the disabled drivers and disabled passengers scheme; the expected timeline for the completion of the review; and if he will make a statement on the matter. [55840/22]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 114, 118, 120, 122, 141 and 155 together.

As the Deputies are aware, I committed to a comprehensive review of the DDS to include a broader review of mobility supports. In order to achieve this objective, Minister O’Gorman agreed in September 2021 that the DDS review should be incorporated into the work of the National Disability Inclusion Strategy (NDIS) Transport Working Group (TWG).

The Working Group, under the Chairpersonship of Minister of State Anne Rabbitte, held a number of meetings across 2022 and is expected to hold its final meeting later this month. The Working Group will produce its report shortly afterwards.

As part of its engagement in this process, the Department of Finance established an information-gathering Criteria Sub-group (CSG) at the start of this year. Its membership comprised of former members of the DDMBA and Principal Medical Officers (PMOs) in the HSE. Its purpose was to capture their experiences, expertise and perspectives in relation to the practical operational and administrative challenges of the DDS, as well as to explore what alternative vehicular arrangements were available for those with mobility issues based on international experience. The CSG work led to the production of five papers and a technical annex, submitted to the Department of Children, Equality, Disability, Integration and Youth in July 2022.

The main conclusion of the CSG is that the DDS needs to be replaced with a fit for purpose, needs-based vehicular adaptation scheme in line with best international practice. Both I and my Department share this view.

In relation to the argument that the scope of the DDS should be broadened, I do not believe this is either feasible or credible as any change or expansion of eligibility criteria for the DDS will still require an individual to 'prove' they meet that criteria and conversely there will still be individuals that will be deemed not to meet the criteria i.e. the scheme will still adhere to an 'in or out' policy rationale. Such an approach has the potential to make already highly contested Primary Medical Certificate and appeals processes even more difficult, for the HSE, for the DDMBA, and for individuals.

This conclusion, together with design principles and parameters for the new scheme as based on international practice, were incorporated into a response to three questions posed in September 2022 to members of the NDIS Transport Working Group, in respect of proposals for enhanced, new and/or reconfigured supports to meet the transport and mobility needs for those with a disability.

Efforts are ongoing to establish a new Disabled Drivers Medical Board of Appeals. Following the resignation of all members of the previous Disabled Drivers Medical Board of Appeal, effective from 30th November 2021, 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 have successfully completed their Garda vetting. Five members are legislatively required for a functional Board with a quorum of three needed for any appeal hearing. Two other candidates have recently been interviewed and if nominated by the Minister for Health will undergo Garda vetting.

Once these processes have been completed for all candidates I 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.

There were 672 appeals outstanding as of end September 2022 (latest data available). Information on waiting times for appeals and on geographical breakdowns are not available.

Tax Credits

Ceisteanna (115, 156)

Brian Stanley

Ceist:

115. Deputy Brian Stanley asked the Minister for Finance if he will introduce a refundable tax credit equivalent to one month’s rent for struggling renters in budget 2023 in light of deepening unaffordability in the rental sector; and if he will make a statement on the matter. [47356/22]

Richard Boyd Barrett

Ceist:

156. Deputy Richard Boyd Barrett asked the Minister for Finance his views on whether the new renter's tax credit is adequate to support renters given the extraordinarily high level of rents; if he will ensure all renters can avail of this credit; and if he will make a statement on the matter. [55853/22]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 115 and 156 together.

In my Budget 2023 address on 27 September last, I acknowledged the challenges that the Government faces in relation to housing. I also acknowledged that too many people are paying too much of their income in rent. As part of the response, I announced a new €500 Rent Tax Credit to assist renters, specifically those who do not receive other housing supports from the State. The credit will apply for 2023 and subsequent tax years to end 2025. However, it is not only being introduced in respect of future years; it will also be available in respect of 2022. In addition, between Budget day and the publication of the Finance Bill, I decided that the application of the credit would be broadened so that it would also be available in certain circumstances to parents who pay rent on behalf of their student child in third-level education.

A minimum amount of €2,500 rent must be paid to fully avail of the support.

In addition, the tax credit will be non-refundable. A person must pay income tax to avail of same and there is no intention to depart from this principle. In the case of a single person, the amount of tax that must be paid to fully avail of the relief is €3,900 in 2022 and €4,050 in 2023.

The new credit is estimated to cost about €200 million for each year that it operates. This is a very significant amount of expenditure within the tax system. It represents a proportionate response within the limits of what was available in the context of the overall Budget 2023 arithmetic.

The Government's Housing for All strategy is intended to deliver more homes of all types for people with different housing needs, including those who wish to rent at an affordable price.

The most recent Housing for All Action Plan Update and Q3 Progress Report published last week by the Department of the Taoiseach indicates that while there are challenges, in particular from cost pressure due to the war in Ukraine, the plan is working. It also states that housing supply is increasing and that the Government fully expects to meet its 2022 delivery target of 24,600 homes noting that more homes are expected to be built this year than in any year since 2009. Additional supply will help to moderate housing costs in both the purchase and rental sectors.

Tax Code

Ceisteanna (116, 145)

Cathal Crowe

Ceist:

116. Deputy Cathal Crowe asked the Minister for Finance if he will extend the 9% rate of VAT applicable to the tourism and hospitality sectors beyond 28 February 2023; and if he will make a statement on the matter. [55648/22]

John Lahart

Ceist:

145. Deputy John Lahart asked the Minister for Finance if he has considered the implications to the sustainability of the hospitality sector given the increase of VAT to 13.5%; and if he will make a statement on the matter. [55757/22]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 116 and 145 together.

As the Deputies will be aware, the 9% rate for the tourism and hospitality sectors was reintroduced in Budget 2021 from 1 November 2020 to 31 December 2021 at an estimated cost of €401m. This measure was initially extended in Budget 2022 to 31 August 2022 at a further estimated cost of €251m. It was then extended again for another six months until 28 February 2023 at an additional estimated cost of €250m. This was done to provide further support to the tourism and hospitality sectors over the busy November/December period and into the early New Year.

No further extension to this measure is envisaged so the rate which applies to these sectors will revert to 13.5% from 1 March 2023.

The Deputies should note that 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.

Question No. 117 answered with Question No. 100.

Question No. 118 answered with Question No. 114.

Illicit Trade

Ceisteanna (119)

Brendan Smith

Ceist:

119. Deputy Brendan Smith asked the Minister for Finance if he is satisfied there are adequate measures available to the Revenue Commissioners and other statutory agencies to tackle illicit cross-Border trade; and if he will make a statement on the matter. [55872/22]

Freagraí scríofa

Minister for Finance

I am assured by Revenue that combating the threat which fuel fraud and the illicit alcohol and tobacco trades pose to legitimate businesses, consumers and the Exchequer continues to be a priority for the organisation.

Steps taken by Revenue to combat the illegal mineral oils trade include the application of stringent supply chain controls and reporting requirements, a programme of risk focused enforcement action and the application of legislative sanctions where that is required. In addition, Revenue and His Majesty’s Revenue and Customs (HMRC) undertook a joint initiative leading to the introduction a new marker for use in marked fuels, which came into operation in April 2015. The industry view is that the actions taken have been successful in curtailing fuel fraud.

Illicit trade in alcohol can occur through the diversion of untaxed alcohol onto the market, through the production of counterfeit alcohol and through smuggling from countries with lower taxes. I am aware that Revenue takes appropriate action where illicit cross-border activity is detected and that this action is informed by intelligence on criminal activity and risk-based examination of commercial traffic and stock in retail premises.

In relation to the tobacco trade, I am advised that Revenue uses a combination of risk analysis, profiling and intelligence, and risk-based screening of cargo, vehicles, baggage and postal packages to intercept illicit products. Action after importation includes checks at retail outlets, markets and private and commercial premises.

Revenue and An Garda Síochána collaborate very closely in acting against fuel, alcohol and tobacco crime, and also cooperate closely with their counterparts in Northern Ireland, in the framework of the North-South Joint Agency Task Force. This cooperation plays a key role in targeting the organised crime groups who operate across jurisdictions and are responsible for much of this criminality. Those who facilitate this activity should be aware that they are funding serious organised criminal activity.

I am satisfied that Revenue’s work against fuel fraud and the illicit alcohol and tobacco trades has achieved a considerable level of success. I know that Revenue is very conscious of the resourcefulness of those involved and remains vigilant for, and ready to respond to, any new developments in these areas.

Question No. 120 answered with Question No. 114.