Ged Nash
Question:438. Deputy Ged Nash asked the Minister for Finance if the file relating to a matter (details supplied) has been provided to the National Archives; and if he will make a statement on the matter. [37662/23]
View answerNational Archives
Questions (438)
Written answers
I wish to advise the Deputy that my Department has two files directly related to E107/12/87, which is referenced within the document attached to this PQ. Both files, which relate to an agreement for the adoption of a Civil Service Policy on AIDS in the workplace, are currently in long term storage.
Neither file has been released to the National Archive. My Department’s E Series or ‘Establishment Series’ of files largely relates to personnel issues within the Civil Service. Under the terms of S.I. No. 281/1997 - National Archives Act, 1986 (Prescription of Classes of Records) Order, 1997, personnel case files and related records concerning individual civil servants, are precluded from release.
As a policy document within the Establishment Files, E107-012-1987 is a comparative rarity within the series. The E Series is currently part of the backlog for assessment for transfer to the National Archive. At present, the resources of the Department’s File Management and Archiving unit are focused on a series of files which have been deemed by National Archive to be more representative of the Department’s work.
Question No. 439 answered with Question No. 422.
Universal Social Charge
Questions (440)
Thomas Gould
Question:440. Deputy Thomas Gould asked the Minister for Finance when USC will be abolished. [37679/23]
View answerWritten answers
The Universal Social Charge (USC) was designed and incorporated into the Irish taxation system in 2011 to replace the Health and Income Levies. Its primary purpose was to widen the tax base and to provide a steady income to the Exchequer to provide funding for public services. The USC is an individualised tax, meaning that a person’s liability to the tax is determined on the basis of a person’s own individual income and personal circumstances. It is a more sustainable charge than those it replaced and is applied at a low rate on a wide base, which ensures that it is a stable and sustainable source of revenue for the State.
It is important to point out that in 2016, joint Department of Finance/Economic and Social Research Institute (ESRI) research found that USC represented a more stable form of revenue than income tax. The findings highlighted that USC revenues would fluctuate by less than income tax revenues whenever income is volatile, for example where the economy moves from a boom into a bust. Given the openness of the Irish economy and consequent susceptibility to economic shocks, the contribution that the USC makes to the stability of the State’s revenue sources is considerable.
The USC has played a vital role in meeting the many expenditure demands placed on the Exchequer. Receipts from the USC in 2022 were in the region of €5 billion, with the projected yield for 2023 being broadly similar. If USC were to be abolished, it would be necessary to raise this amount from other sources.
Ireland has one of the most progressive personal income tax systems in the world, which plays a crucial role in the process of income redistribution. Our redistributive tax system has been acknowledged by the IMF, the OECD and the ESRI. It is my view a broad-based, progressive income tax system, where the majority of income earners make some contribution but according to their means, is the most fair and sustainable income tax system in the long term.
As such, I have no plans to abolish the USC.
Tax Data
Questions (441)
Patrick Costello
Question:441. Deputy Patrick Costello asked the Minister for Finance the number of workers in the State who pay taxes at the 40% tax bracket level. [37697/23]
View answerWritten answers
I am informed by Revenue that the estimated number of taxpayer units paying tax at the higher rate (40%) can be found by consulting page 2 of the Revenue Ready Reckoner, available at www.revenue.ie/en/corporate/information-about-revenue/statistics/ready-reckoner/index.aspx .
Based on the most recent data, the number of taxpayer units that will be at the 40 per cent income tax rate, based on the highest tax rate paid and before tax credits are taken into account, in 2024, is estimated to be approximately 1,077,500 taxpayer units (31% of total taxpayer units).
The Deputy will wish to note that the term “taxpayer unit” refers to individual taxpayers or to married couples who opt for joint assessment and are counted as one taxpayer unit.
Revenue Commissioners
Questions (442)
Michael Healy-Rae
Question:442. Deputy Michael Healy-Rae asked the Minister for Finance if an issue with the Revenue Commissioners will be examined (details supplied); and if he will make a statement on the matter. [37781/23]
View answerWritten answers
I am advised by Revenue that the tax record of the person concerned has been updated and a revised Tax Credit Certificate for 2023 issued on 11 August 2023.
I am further advised by Revenue that, in order to claim any additional relief due to them, the person concerned can complete their Income Tax Return for 2022 by logging into their online Revenue account.
Primary Medical Certificates
Questions (443)
Rose Conway-Walsh
Question:443. Deputy Rose Conway-Walsh asked the Minister for Finance the number of appeals to the Disabled Drivers Medical Board of Appeal that are currently outstanding; if the nominated person who resigned in March 2023 has been successfully replaced through the latest expression of interest campaign in April 2023; if new arrangements have been implemented, following the withdrawal of services by the National Rehabilitation Hospital, and if not, the projected timeline for their implementation; and if he will make a statement on the matter. [37814/23]
View answerWritten answers
Following the resignation of all previous members of the Disabled Drivers Medical Board of Appeal (DDMBA) in November 2021, I had hoped that a new DDMBA would have been established by now and that the appeals process would have recommenced.
Five members are legislatively required for a functional Board, however the recruitment of these members has proved to be challenging. In this regard, four expressions of interest campaigns have been organised by the Department of Health – 3 of them in 2022, and one in April to replace a previously nominated person. The necessary 5 members have now been nominated by the Minister for Health and all have successfully completed Garda vetting. They will be formally appointed by the Minister pending confirmation from the National Rehabilitation Hospital (NRH) that they are willing to again host the Board, following withdrawal of their services in February 2023.
Senior officials from my Department and the Department of Health are actively working to determine financial arrangements for the NRH, who have indicated a willingness to again host the DDMBA once these are in place. It is important to note that requests for appeal hearings can still be sent to the DDMBA secretary based in the NRH.
Assessments for the primary medical certificate, by the HSE, are continuing to take place. In this regard, an important point to make is that even though there has been no appeal mechanism since the previous Board resigned, applicants who have been deemed not to have met one of the six eligibility criteria required for a PMC are entitled to request another PMC assessment six months after an unsuccessful PMC assessment.
I have 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.
As at end June there were 1,006 appeals waiting to be heard.
Banking Sector
Questions (444, 467)
Martin Browne
Question:444. Deputy Martin Browne asked the Minister for Finance if he plans to engage with Irish banks on passing on interest rate increases to savers; and if he will make a statement on the matter. [37828/23]
View answer
Richard Bruton
Question:467. Deputy Richard Bruton asked the Minister for Finance if he has assessed the gap that has emerged between deposit rates given by banks and the lending rates charged; and if he has plans to ensure that depositors and lenders are fairly treated. [38584/23]
View answerWritten answers
I propose to take Questions Nos. 444 and 467 together.
It has been widely discussed that the interest rate environment has changed significantly over the last 12-18 months and I am acutely conscious of the impact that rising interest rates are having on mortgage borrowers. That is why I recently met with the representatives of the banking and mortgage sector to discuss the measures they can take to assist their customers at this time of rising interest rates.
However, deposit interest rates are a means for banks to attract or maintain a stable source of funding. The determination of the rate of interest to offer to attract depositors is a commercial decision, which is the sole responsibility of the board and management of each bank.
Neither the Central Bank of Ireland nor I have a role in setting the interest rates offered by banks on monies held on deposit. Although the State is a shareholder in some of the banks operating in the jurisdiction, those entities must also be run on a commercial and independent basis.
In terms of the interest rates currently available on deposits, the Central Bank of Ireland retail interest rates release was published on 09 August 2023.
I am informed by the Central Bank of Ireland, that:
• Interest rates on household overnight deposits rose to 0.07 per cent in June 2023.
• Interest rates on new household deposits with agreed maturity rose to 2.12 per cent in June in Ireland, while the euro area equivalent was 2.70 per cent.
As at end-June 2023, €151.6 billion was held on deposit by Irish households with Irish resident credit institutions, of which €141.8 billion is in overnight deposits and €2.5 billion is on deposit with agreed maturity. It is worth noting that banks currently hold an unusually large share of overnight deposits by historical standards.
The difference between interest rates on overnight deposits and term deposits represents an increased opportunity cost of holding overnight deposits. Over time, it would be expected to see some flow from overnight to term deposits for savers to achieve a greater return. Increasing competition to attract these relatively stable sources of funding could also contribute to a greater pass-through of policy rates into deposit rates over time.
Deputies may also wish to note that the Competition and Consumer Protection Commission's (CCPC) website includes a number of comparison tools to help consumers shop around. These tools can be used to compare the features and rates of both lump sum deposit products and regular savings accounts.
Tax Code
Questions (445)
Michael Healy-Rae
Question:445. Deputy Michael Healy-Rae asked the Minister for Finance his views on introducing levies on concrete products (details supplied), which will have a detrimental effect for people and companies; and if he will make a statement on the matter. [37874/23]
View answerWritten answers
As the Deputy is aware, arising from a November 2021 Government decision that a levy be imposed on the construction sector to contribute towards the cost of the Mica Redress Scheme, the Defective Concrete Products Levy was announced as part of Budget 2023.
The levy, which was legislated for in section 99 of Finance Act 2022, will apply to pouring concrete and concrete blocks as defined by 2 harmonised EU standards. It should be noted that pouring concrete and the most widely used concrete block type are subject to a reduced rate of VAT at 13.5% as opposed to the standard rate of 23%.
As part of the work undertaken on the impact that the levy could have on the construction sector the Department of Housing, Local Government and Heritage commissioned a bottom up scientific analysis, which was carried out by an independent Construction Economics Cost Consultant, to help identify the likely impact of the levy on construction costs.
This report was carried out in September 2022 and took account of the prevailing relevant costs in the construction sector as they applied at the time they were prepared. The costs set out in the report are for the third quarter of 2022 and account for inflation up to that point in time.
This report was undertaken on the impact of the levy, as was announced in the Budget 2023 speech, and so the cost assessment is based on a 10% levy on concrete products for typical dwellings. As the rate of the levy (as was provided for in Finance Act 2022) was subsequently reduced to 5% following consideration of feedback received from industry participants and others, the costings in the analysis should be reduced by approximately 50% to determine the impact of the new design of the Defective Concrete Products Levy on costs. This report is available on my Department's website.
Therefore, while it should be noted that costs are subject to range of variables, and based on the situation in late 2022, the levy is expected to result in an increase in hard costs of between €400 to €800 for a typical 3 bed semi-detached house and between €375 to €550 per apartment in a typical 6 floor apartment block with basement carpark. When soft costs including cost of finance, fees, risk and contingency are included the impact of the levy for typical dwelling was estimated to be €700 to €1,100 and for a typical apartment €650 to €1,050.
The percentage increase in construction and development costs of the levy was therefore estimated to be approximately 0.2% to 0.45% for a typical semi-detached dwelling and 0.15% to 0.2% for a typical apartment for both hard and soft costs.
The levy only came into effect last week, on 1 September 2023. The Deputy will also be interested to note that I announced on Wednesday 6 September my intention to bring forward legislation in Finance Bill 2023 to exclude the value of pouring concrete used in pre-cast products from the scope of the levy with effect from 1 January 2024. I intend to introduce a refund scheme for the interim period of 1 September 2023 to 31 December 2023. Details of the amendments will be published in Finance Bill 2023.
Budget 2024
Questions (446)
Michael Healy-Rae
Question:446. Deputy Michael Healy-Rae asked the Minister for Finance to address the issues the Coach Tourism and Transport Council, CTTC, has raised (details supplied); and if he will make a statement on the matter. [37878/23]
View answerWritten answers
The Value Added Tax (Refund of Tax) (Touring Coaches) Order of 2012 provides for a refund of VAT on the cost of acquiring “qualifying vehicles” used for the carriage of tourists under contracts for group transport.
This order places no restriction on the fuel source of a qualifying vehicle and therefore electric and alternatively powered vehicles that conform to the physical dimensions and designated usage requirements of the order are already eligible under the Refund Order.
The order defines qualifying vehicles by reference to their use and physical dimensions as follows:
(a) a single-deck touring coach having dimensions as designated by the manufacturer of not less than 2,700 millimetres in height, not less than 8,000 millimetres in length, not less than 775 millimetres in floor height and with an underfloor luggage capacity of not less than 3 cubic metres, or
(b) a double-deck touring coach having dimensions as designated by the manufacturer of not more than 4,300 millimetres in height and not less than 10,000 millimetres in length.
It is not possible to expand the scope of this refund order.
Tax Code
Questions (447)
Michael Healy-Rae
Question:447. Deputy Michael Healy-Rae asked the Minister for Finance if he will address a matter (details supplied) regarding excise duty on fuel; and if he will make a statement on the matter. [37918/23]
View answerWritten answers
In recognition of the impact of increased fuel prices in 2022, the Government provided for excise rate reductions effective from 10 March 2022 on petrol and diesel in the order of 20 and 15 cent per litre VAT inclusive. A further 1 cent reduction was applied from April to offset the anticipated increase in retail price arising from biofuel obligation rate changes. These rate reductions were due to expire in August 2022 but were extended initially to October 2022 and then to February 2023. In February 2023 the Government further extended the reductions with a phased restoration of rates which began in June 2023:
• 01 June – VAT inclusive increase of 6 cent on petrol and 5 cent on diesel.
• 01 September - VAT inclusive increase of 7 cent on petrol and 5 cent on diesel.
• 31 October - VAT inclusive increase of 8 cent on petrol and 6 cent on diesel.
This reflects a decision which considered both the impact on public finances and the need to support citizens and industry. The Mineral Oil Tax reductions are estimated to have cost over €970m between March 2022 and June 2023, and there will continue to be an additional cost to the exchequer while reductions apply.
Both the June and September rate restorations have now been implemented and as the Deputy will be aware, it is a longstanding practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.
Tax Code
Questions (448)
Neasa Hourigan
Question:448. Deputy Neasa Hourigan asked the Minister for Finance if he will extend the bike-to-work scheme to those who are self-employed; and if he will make a statement on the matter. [37920/23]
View answerWritten answers
Section 118(5G) of the Taxes Consolidation Act 1997 (TCA) provides for the Cycle to Work scheme. This scheme offers an exemption from benefit-in-kind (BIK) where an employer purchases a bicycle and/or associated safety equipment for one of their employees (or directors) to use, in whole or in part, to travel to work. Associated safety equipment includes helmets, lights, bells, mirrors and locks but does not include child seats or trailers.
One of three thresholds applies to the amount of exempted expenditure. The applicable threshold depends on the type of bicycle purchased and includes related safety equipment. From 1 January 2023, the Cycle to Work scheme applies to the first:
• €3,000 of expenditure in relation to a cargo or e-cargo bike;
• €1,500 of expenditure in relation to a pedelec or e-bike; or
• €1,250 of expenditure in relation to any other type of bike.
The employer and employee may also enter into a Revenue-approved salary sacrifice arrangement under which the employee agrees to sacrifice part of his or her salary in exchange for a bicycle and/or related safety equipment. If such an arrangement is in place, the amount of remuneration foregone, up to the value of the bicycle and/or safety equipment, would also be exempt from tax under section 118B TCA.
BIK is a charge to tax which only applies where an employer provides a benefit to either their director or employee. Therefore, the exemption from BIK under the Cycle to Work scheme is only applicable where the bicycle and/or related safety equipment is provided by an employer to either their director or someone in their employment.
Self-employed individuals generally can’t qualify for the Cycle to Work scheme because an employer-employee relationship does not exist. Likewise, they generally are not eligible for the exemption from tax in respect of sacrificed remuneration because salary sacrifice arrangements may only be entered into between an employer and their director or employee.
As the Deputy will appreciate, the expansion of any tax expenditure creates a cost to the Exchequer in terms of revenue foregone and that cost must be recovered elsewhere.
For these reasons, while the Cycle to Work scheme is kept under review by officials, I have no plans at present to change the scope of the scheme.
Further information and guidance regarding the conditions of the Cycle to Work scheme can be found on Revenue’s website at the following link: www.revenue.ie/en/jobs-and-pensions/taxation-of-employer-benefits/cycle-to-work-scheme.aspx
Banking Sector
Questions (449)
Thomas Gould
Question:449. Deputy Thomas Gould asked the Minister for Finance for an update on provision to assist type 1 diabetics in progressing with a mortgage given difficulties in securing mortgage protection insurance. [37969/23]
View answerWritten answers
At the outset, it is important to note that neither I, nor the Central Bank of Ireland, can intervene in the provision or pricing of insurance products, nor can we compel any insurer operating in the Irish market to provide cover to specific individuals or businesses. This position is underpinned by the EU framework for insurance companies (the Solvency II Directive).
It is my understanding that generally insurers use a combination of actuarial factors in making their individual decisions on whether to offer life cover and what terms to apply. These can include: age; health; family medical history; occupation; and lifestyle. In addition, these may be determined or linked to the policy duration. In the case of mortgage protection policies, these tend to be over the lifetime of the repayment schedule.
Moreover, my understanding is that different insurers do not use the same combination of factors. Accordingly, the cost and availability of cover varies across the market, and will be priced in accordance with firms’ prior claims experience.
Notwithstanding this, I am aware of the sensitive issue for many individuals in our community with chronic or underlying health conditions, including diabetes, in accessing mortgage protection cover.
It may interest the Deputy to know that in order to assist clients who have had difficulty acquiring life cover due to a pre-existing illness, Brokers Ireland has published a register containing contact details of Brokers who have experience in advising on life cover in this area. This is available at: brokersireland.ie/life-cover-pre-existing-illnesses/.
In addition, Insurance Ireland operates an Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance, which can be accessed by ringing 01-676-1820 or at feedback@insuranceireland.eu.
Finally, with respect to mortgage protection insurance in the context of home ownership, there is a provision under Section 126 of the Consumer Credit Act 1995 whereby lenders can provide a mortgage in situations where a borrower may be unable to obtain life insurance, or where such insurance is unduly costly compared to that payable by borrowers generally. For individuals, including those with chronic health conditions, who may experience difficulties acquiring mortgage protection insurance when securing a home loan, this is also an important provision to be aware of and to discuss with their lender.
Interest Rates
Questions (450)
Joe O'Brien
Question:450. Deputy Joe O'Brien asked the Minister for Finance if he has considered increasing the interest rate for Government saving bonds, which are remarkably low considering the current ECB rate; and if he will make a statement on the matter. [38055/23]
View answerWritten answers
I am happy to inform the Deputy that on Friday, 1 September last the National Treasury Management Agency announced increases in interest rates on State Savings fixed rate products and new variable interest rates for Deposit Accounts and the prize fund rate for Prize Bonds. The rates are effective from 1 October 2023 and the changes were published via the statesavings.ie website.
Question No. 451 answered with Question No. 425.
Primary Medical Certificates
Questions (452)
Brendan Smith
Question:452. Deputy Brendan Smith asked the Minister for Finance when it is proposed to establish the disabled drivers medical board of appeal; when the criteria for this scheme will be amended in view of the widespread dissatisfaction in relation to the workings of this scheme; and if he will make a statement on the matter. [38167/23]
View answerWritten answers
Following the resignation of all previous members of the Disabled Drivers Medical Board of Appeal (DDMBA) in November 2021, I had hoped that a new DDMBA would have been established by now and that the appeals process would have recommenced.
Five members are legislatively required for a functional Board, however the recruitment of these members has proved to be challenging. In this regard, four expressions of interest campaigns have been organised by the Department of Health – 3 of them in 2022, and one in April to replace a previously nominated person. The necessary 5 members have now been nominated by the Minister for Health and all have successfully completed Garda vetting. They will be formally appointed by the Minister pending confirmation from the NRH that they are willing to again host the Board, following withdrawal of their services in February 2023.
Senior officials from my Department and the Department of Health are actively working to determine financial arrangements for the NRH, who have indicated a willingness to again host the DDMBA once these are in place. It is important to note that requests for appeal hearings can still be sent to the DDMBA secretary based in the NRH.
Assessments for the primary medical certificate (PMC) , by the HSE, are continuing to take place. In this regard, an important point to make is that even though there has been no appeal mechanism since the previous Board resigned, applicants who have been deemed not to have met one of the six eligibility criteria required for a PMC are entitled to request another PMC assessment six months after an unsuccessful PMC assessment.
I have 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.
In relation to the second part of the Deputy's question, he should note that the final report of the NDIS Transport Working Group's review of mobility and transport supports including the Disabled Drivers and Disabled Passengers Scheme (DDS), endorsed proposals for a modern vehicle adaptation scheme in line with international best practice that would replace the DDS, as it is no longer fit-for-purpose on any and all aspects.
As the Deputy will appreciate, access to transport for people with disabilities is a multifaceted issue that involves work carried out by multiple Government departments and agencies. Officials from relevant Departments and agencies are meeting to discuss the issues arising from this report and to map a way forward. My officials are proactively engaging with this work as an important step in considering ways to replace the DDS.
The Government is committed to providing services for people with disabilities which will empower them to live their lives, provide greater independence in accessing the services they choose and enhance their ability to tailor the supports required to meet their needs and plan their lives.
Tax Code
Questions (453)
Seán Canney
Question:453. Deputy Seán Canney asked the Minister for Finance when the appropriate amendment will be made to the forthcoming finance Act to exempt R2 residential zoned land from the residential zoned land tax, given that this land cannot currently be developed. [38171/23]
View answerWritten answers
The Residential Zoned Land Tax (RZLT) is a new tax introduced in Finance Act 2021 which seeks to increase housing supply by encouraging the activation of development on lands which are suitably zoned and appropriately serviced. It aims to bring those lands which have benefitted from investment in services and are capable of being developed forward for housing. The tax is an action contained in Housing for All, the Government’s plan for housing, to increase housing supply and is supported in the Programme for Government.
The tax applies to land that is:
• zoned suitable for residential development whether it be solely or primarily for residential use, or for a mixture of uses, including residential use, and
• serviced (that is: reasonable to consider may have access, or be connected, to public infrastructure and facilities, including roads and footpaths, public lighting, foul sewer drainage, surface water drainage and water supply, necessary for dwellings to be developed and with sufficient service capacity available for such development)
In order to be liable for the tax the land must meet both criteria.
Each local authority in the State was responsible for the preparation of an RZLT map for their functional area. In identifying in-scope lands for the tax, the local authorities have identified the relevant zonings contained in their development plan, including land zoned phase 1, phase 2 and as a strategic residential reserve. Each local authority, in preparing the draft RZLT maps, determined whether the zoned land is connected or able to connect to the six required categories of services. Finally, any exclusions which would rule the land out of scope were applied.
Each local authority then published a draft RZLT map identifying the land which meets the requirements of the legislation and which may be liable to the tax. The tax will first be due and payable in 2024.
A landowner with land identified on any published draft map has had the opportunity to make a submission to the local authority regarding the land, setting out why they consider that the land does not meet the criteria for inclusion within the scope of the tax. For example, if the land is not zoned for residential use, if the land does not have access to or there is no capacity for any of the six servicing criteria, or if the land benefits from an exclusion as outlined in the legislation.
The local authority was required to assess any submission and inform the landowner of their decision to either remove or retain the land on the map by 1 April 2023. If dissatisfied with the local authority decision, the landowner had the opportunity to appeal the determination to An Bord Pleanála, again setting out why the land does not meet the criteria for inclusion for the tax.
In addition to being able to make a submission regarding inclusion of land on a draft map, the landowner also had the opportunity to submit a request to change the zoning of the land by variation of the adopted development plan. Where the zoning is amended to a use other than residential or mixed use including residential, it would not meet the criteria for the tax and would be removed from RZLT maps. Decisions on whether to amend zonings as a result of submissions or at any other time are a matter for the local authority, taking into account the need to ensure that housing supply targets across the county can be met.
Furthermore, provision is made in the Planning and Development Act 2000 for elected members to seek a report from their Chief Executive on the matter of proposed re-zonings. Officials in my department are currently considering this matter.
The issue of development potential of phased land which is identified in a statutory land use plan has been raised by a number of stakeholders and this matter is currently being examined in detail by officials in the Department of Housing, Local Government and Heritage and Department of Finance having regard to the need for a consistent approach to be applicable across the State.
Tax Code
Questions (454)
Fergus O'Dowd
Question:454. Deputy Fergus O'Dowd asked the Minister for Finance to respond to concerns raised by an organisation (details supplied); and if he will make a statement on the matter. [38173/23]
View answerWritten answers
In recognition of the impact of increased fuel prices in 2022, the Government provided for excise rate reductions effective from 10 March 2022 on petrol and diesel in the order of 20 and 15 cent per litre VAT inclusive. A further 1 cent reduction was applied from April to offset the anticipated increase in retail price arising from biofuel obligation rate changes. These rate reductions were due to expire in August 2022 but were extended initially to October 2022 and then to February 2023. In February 2023 the Government further extended the reductions with a phased restoration of rates which began in June 2023:
• 01 June – VAT inclusive increase of 6 cent on petrol and 5 cent on diesel.
• 01 September - VAT inclusive increase of 7 cent on petrol and 5 cent on diesel.
• 31 October - VAT inclusive increase of 8 cent on petrol and 6 cent on diesel.
This reflects a decision which considered both the impact on public finances and the need to support citizens and industry. The Mineral Oil Tax (MOT) reductions are estimated to have cost over €970m between March 2022 and June 2023 and there will continue to be an additional cost to the exchequer while reductions apply.
Both the June and September rate restorations have now been implemented and as the Deputy will be aware, it is a longstanding practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.
With regard to price differentials in border areas, it should be noted that the final retail prices of fuel is determined by a number of factors including energy market dynamics, wholesale pricing policy, transport costs, exchange rate impacts, taxation and individual retailer pricing policies.
The table below sets out the excise rate applicable in the State with effect from 1 September 2023 :
|
Fuel |
Excise Rate per 1000 Litres |
|
Petrol |
€589.03 |
|
Auto Diesel |
€506.75 |
The equivalent rates applicable across the UK, including Northern Ireland are set out below :
|
Fuel |
Excise Rate per 1000 Litres |
|
Petrol |
£529.50 |
|
Auto Diesel |
£529.50 |
Housing Policy
Questions (455)
Alan Dillon
Question:455. Deputy Alan Dillon asked the Minister for Finance if he will consider allowing first-time home buyers to access a portion of their pension funds for use as a deposit on a home; and if he will make a statement on the matter. [38220/23]
View answerWritten answers
The main purpose of a pension fund is to provide a secure income in retirement for the pension beneficiary. The purpose of providing tax relief for pension contributions is to encourage individuals to save for retirement, to meet a target level of supplementary pension coverage and an income replacement target, and to assist in preventing an over reliance on State support for people in later life.
As you may be aware, Ireland operates what is described as an “Exempt – Exempt – Taxed” or “EET” supplementary pension regime. Contributions to a pension fund are relieved from tax subject to age-related percentage and income limitations and growth in these funds are also accumulated on a tax-free basis. Payments out of the fund during retirement, after taking a tax-free lump sum are then subject to income tax, and USC and PRSI where applicable.
The taxation of payments from the fund after the tax-free lump sum is an important balance to the generous tax reliefs for contributions and growth of pension funds. Allowing early access to funds tax-free would not be in alignment with the goal of supporting savings for retirement. Therefore I currently have no plans to allow pension savers to access their funds tax free before retirement.
I would note that there are already a number of direct expenditure measures alongside tax based measures, such as Help To Buy, available to assist first time buyers.
Tax Data
Questions (456)
Pauline Tully
Question:456. Deputy Pauline Tully asked the Minister for Finance the amount it would yield if the late registration fee of 0.1% was increased to 0.5% for each day over 30 days for which a vehicle remain unregistered for vehicle registration tax based on 2022 figures. [38243/23]
View answerWritten answers
In general, vehicles must be registered within 30 days of entering the State, and Vehicle Registration Tax is assessed and payable at the time of registration. Section 132 of the Finance Act, 1992 provides that an additional charge applies where a vehicle is unregistered after the date registration is required by law, or where a payment or part payment remains outstanding after the same date.
The law provides that this additional charge is calculated as the amount of VRT outstanding multiplied by 0.1%, multiplied by the total number of days that have passed between the date the vehicle enters the State and the date it is registered. This charge applies only where registration takes place after the required last date of registration set down in law, which is to say it applies only where the 30-day period for registration after a vehicle enters the State, where applicable, has expired.
In 2022, Revenue collected €1,009,810 in relation to this additional charge. Had the rate been 0.5% per day (instead of the 0.1% rate set down by law), the receipts for 2022 would have been approximately €5 million (i.e. 5 times higher), assuming no behavioural change.
Tax Code
Questions (457)
Claire Kerrane
Question:457. Deputy Claire Kerrane asked the Minister for Finance if consideration has been given to extending benefit-in-kind measures beyond the current December 2024 deadline; and if he will make a statement on the matter. [38295/23]
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In light of the cost of living crisis, the Government recognised the difficulty experienced by some people who faced BIK increases under the new 2023 regime. Therefore, temporary changes were made to BIK for 2023 which will help lessen the BIK liability for most people.
This temporary change takes the form of a universal relief of €10,000 which is currently applied to the Original Market Value (OMV) of vehicles in Category A-D in order to reduce the amount of BIK payable. This means that, for the purposes of calculating BIK liability, employers may reduce the OMV by €10,000 i.e. the BIK liability for a car worth €50,000 will now be calculated using €40,000 as the OMV. This relief also applies to vans and electric vehicles, however does not apply to cars in category E – the highest emission category. For electric vehicles, the OMV deduction of €10,000 is in addition to the existing relief of €35,000 that is currently available for such vehicles, meaning that the total relief for 2023 is €45,000.
Additionally, the lower limit in the highest mileage band has been amended by way of a 4,000km reduction, so that the highest mileage band is now entered into at 48,001km. This amendment will help those employees who drive particularly large amounts of mileage and will result in their BIK liability being reduced. This change is in recognition of employees driving cars more integral to the conduct of business.
This was introduced as a temporary measure for 2023 and is due to remain in place until 31 December 2023.
Regarding any future decisions, it is a longstanding practice of the Minister for Finance not to comment further, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.