Written Answers Nos. 223-233
223. Deputy James Lawless asked the Minister for Transport if he will address an issue with the student Leap card (details supplied) whereby a person is not eligible for the card if they are working a part-time job as well as studying; and if he will make a statement on the matter. [5531/23]
View answerAs 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 of these services in conjunction with the relevant transport operators. The NTA also has responsibility for the regulation of fares charged to passengers in respect of public transport services provided under public service obligation (PSO) contracts.
In light of the Authority's responsibility in this area, I have forwarded the Deputy's question in relation to the student Leap card, to the NTA for direct reply. Please advise my private office if you do not receive a response within ten working days.
224. Deputy Carol Nolan asked the Minister for Finance the number of times the financial stability group within his Department has met; the membership of the group; the issues discussed during the period from March 2022, to date; and if he will make a statement on the matter. [5336/23]
View answerThe Financial Stability Group (FSG), met for the first time in January 2017. The number of meetings held since the formation of the Financial Stability Group (FSG) since 2017 is listed below:
|
Year |
2017 |
2018 |
2019 |
2020 |
2021 |
2022 |
2023 |
|
No of meetings |
9 |
6 |
6 |
20 |
8 |
8 |
6 (expected) |
The FSG normally meet bi-monthly but can meet more often if required.
The formal members of the Group are:
- Department of Finance: Secretary General and Assistant Secretary, Banking Division;
- Central Bank of Ireland: Governor, Deputy Governor, Financial Regulation; Deputy Governor, Monetary and Financial Stability and Director of Financial Stability;
- National Treasury Management Agency: CEO and Director, Funding and Debt Management.
Other senior management from the Department, the Central Bank and the NTMA attend on a regular basis and there is scope for individuals from other Departments or agencies to attend FSG meetings depending on the agenda items discussed.
The topics discussed by the FSG generally have a medium-term focus of impacts on financial stability. The Group considered a wide range of topics since March 2022, of which the most significant were:
- Financial impact of Covid
- Cyber threats
- Distressed debt
- Ukraine
- Operation of the FSG Crisis Coordination framework
- IMF Financial Sector Assessment Programme
- Withdrawal of retail banks
- Sanctions issues
- Retail banking review
- Credit Unions
- Central Bank’s 2022 Financial Stability Reviews
- Energy security issues
225. Deputy Louise O'Reilly asked the Minister for Finance the amount of funding allocated to the accelerated capital allowance in 2021, 2022, and to date in 2023, in tabular form; and if he will make a statement on the matter. [5370/23]
View answerFollowing clarification from the Deputy's office, I understand that this question refers to the Accelerated Capital Allowances scheme for Energy Efficient Equipment.
As this is a tax expenditure, there is no specific advance funding allocation. Rather, claims under this scheme are submitted in the annual tax return of the claimant, following the end of the relevant accounting period. The costs therefore depend on the take up of the scheme in any given year.
In 2019, the most recent year for which comprehensive data are currently available, the cost of the scheme was €4.5 million, in respect of 1,012 claims. Information in respect of prior years is available at the following link: www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/index.aspx It should be noted that this is a temporal cost - the scheme provides for an acceleration of existing capital allowances and therefore is cost-neutral over the life of the asset.
The Accelerated Capital Allowance for Energy Efficient Equipment scheme is regularly reviewed. The last review was undertaken in 2020 and was published in the Budget 2021 Tax Expenditures report, available on the following website: www.gov.ie/en/collection/4e0ff-budget-2021/.
As per tax expenditure guidelines, this scheme will be reviewed again this year in advance of Budget 2024.
226. Deputy Louise O'Reilly asked the Minister for Finance the capital, current and total 2023 budget allocation for temporary extensions, in tabular form; and if he will make a statement on the matter. [5389/23]
View answerThe Deputy should note that the fiscal parameters set out in Budget 2023 are based on the temporary tax measures expiring at end-February.
The cost of these measures being extended is set out below:
Estimated cost of 9% extension for tourism and hospitality by sector to 31.12.2023
|
Good/Service |
Total €m |
|
Accommodation |
€102 |
|
Food/Catering |
€358 |
|
Other Entertainment |
€13 |
|
Cinemas |
€4.9 |
|
Hairdressing |
€26 |
|
Total |
€503.9 |
Estimated cost of 9% extension for Gas and Electricity to 31.12.2023
|
Good/Service |
Total €m |
|
Electricity |
€113.3 |
|
Gas |
€37.4 |
|
Total |
€150.7 |
Estimated Cost of Excise Extensions from 1.3.23 to 11.10.23 including VAT
|
Fuel Type |
Total €m |
|
Petrol |
123 |
|
Diesel |
318 |
|
MGO |
35 |
|
Total |
476 |
227. Deputy Sean Sherlock asked the Minister for Finance the audit that has been carried out since 2019, 2020, 2021 and 2022 on the impact of benefit-in-kind changes in the Finance Act 2019 on notional pay and the subsequent knock-on taxation implications for workers in pay ranges (details supplied), in tabular form. [5279/23]
View answer228. Deputy Sean Sherlock asked the Minister for Finance the number of workers that have been impacted on changes in benefit-in-kind made in the Finance Act 2019, per county, in tabular form. [5280/23]
View answer229. Deputy Sean Sherlock asked the Minister for Finance if data is available on whether workers who avail of benefit-in-kind are better or worse off due to the changes introduced in the Finance Act 2019; and if emissions are up or down as a result of that change. [5281/23]
View answer230. Deputy Sean Sherlock asked the Minister for Finance if he plans to re-examine the benefit-in-kind changes introduced in the Finance Act 2019 due to higher emissions and costs to those workers. [5282/23]
View answerI propose to take Questions Nos. 227, 228, 229 and 230 together.
The Deputy should note at the outset that it is not possible from the data submitted to Revenue in respect of benefit-in-kind to identify specific statistics solely in relation to BIK on employer-provided vehicles, as the information submitted is not itemised based on the type of benefit granted.
Recent Government policy has focused on strengthening the environmental rationale behind company car taxation. Until the changes 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, a CO2-based BIK regime for company cars was legislated for from 1 January 2023. From the beginning of this year, the amount taxable as BIK is determined by the car’s original market value (OMV) and the annual business kilometres driven, while new CO2 emissions-based bands determines whether a standard, discounted, or surcharged rate is taxable.
In certain instances, this new regime will provide for higher BIK rates, for example in relation to above average emissions and high mileage cars. It should be noted, however, that the rates remain largely the same in the lower to mid mileage ranges for the average lower emission car. Additionally, EVs benefit from a preferential rate of BIK, ranging from 9 – 22.5% depending on mileage. Fossil-fuel vehicles are subject to higher BIK rates, up to 37.5%. This new structure with CO2-based discounts and surcharges is designed to incentivise employers to provide employees with low-emission cars.
I am aware that 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 that are 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 number 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 brings 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 means that the quantum of the relief is phased down from €50,000 in 2022, to €35,000 in 2023, €20,000 in 2024, and €10,000 in 2025. 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 recent implementation.
231. Deputy Pauline Tully asked the Minister for Finance the current number of Revenue Commissioners staff, by grade, that answer the personal PAYE hotline number; if he has plans to increase the number of these staff, given that many older people are not able to use computers and or do not have access to the internet; and if he will make a statement on the matter. [5299/23]
View answerAs the Deputy may be aware, the early months of each year place the highest demand on Revenue’s PAYE Services as taxpayers submit their income tax returns for the previous year, claim any refunds or reliefs to which they may be entitled, and check their tax credits for the current year. As of close of business on 30 January 2023, Revenue have advised me that the PAYE Helpline staff have answered over 66,200 calls and processed over 113,000 items of correspondence received through its online services or the postal system.
Further, Revenue have advised me that it currently has a total of 267 Clerical Officers (COs) and 98 Executive Officers (EOs) providing the full range of PAYE services. Of those officers, approximately 130 COs are on phone duties with the remainder working on correspondence received online or via the postal system. The EOs are allocated to support the phones and correspondence in a similar proportion.
Revenue allocates resources to best meet the demand of the various services required and the current arrangement whereby the phone service is available from 9:30am to 1:30pm each day provides the optimum allocation of available resources to deal with the volume of submissions through post and online as well as through the phone service.
For taxpayers who may not have access to the online services, extensive support is provided across the various Revenue telephone helplines, in addition to the comprehensive service provided for queries received through the postal system.
Additionally, Revenue provides an in-person appointment service at their offices in Dublin; Cork; Limerick and Galway. This service allows customers to schedule an appointment at a time that suits them by calling the Appointment Helpline on 01 738 3660, from 9.30am to 1.30pm, Monday to Friday. The in-person appointment service complements the existing virtual appointment service which largely reduces the need to visit in-person. Virtual appointments may also be arranged through the Appointment Helpline.
232. Deputy Pádraig O'Sullivan asked the Minister for Finance if the naval personnel sea service tax credit will be increased; and if he will make a statement on the matter. [4806/23]
View answerSection 472BB of the Taxes Consolidation Act 1997 (TCA 1997) provides that a tax credit, called the sea-going naval personnel credit, is available to those who satisfy the qualifying conditions of that section.
This credit was introduced by Finance Act 2019 in recognition of the proportion of their time that naval personnel spend away from the State at sea (and the various hardships associated with that); and to aid in the recruitment and retention of personnel in the Naval Service. It was initially available to permanent members of the Irish naval service in the 2020 year of assessment only. However, the availability of the credit has since been extended and the credit now applies for the 2021 to 2023 years of assessment inclusive also.
The sea-going naval personnel tax credit was €1,270 for the 2020 year of assessment. For the 2021, 2022 and 2023 years of assessment the credit was increased to €1,500.
Full details of qualifying conditions that apply are set out in the relevant Tax and Duty Manual (Part 15-01-48) available on the Revenue website at the following link:
www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-48.pdf
This credit was introduced as a targeted and time bound measure aimed at incentivising the retention of skilled personnel who have been trained, at cost to the Exchequer, to provide essential services in the area of fisheries protection, amongst other functions.
The further extension of this tax credit for the 2023 year of assessment recognises the unique conditions of service in the navy, whilst also ensuring the credit remains a targeted and time bound measure. There is also scope for other retention measures to be implemented on foot of the Public Service Pay Commission (PSPC) Report on Recruitment and Retention in the Permanent Defence Force.
My Department will continue to engage with the Department of Defence in relation to the current taxation measure. Decisions regarding tax incentives and reliefs are normally made in the context of the annual Budget and Finance Bill process. Such decisions must have regard to the sound management of the public finances and my Department's Tax Expenditure Guidelines. The guidelines make clear that any policy proposal which involves tax expenditures should only occur in limited circumstances where there are demonstrable market failures, where a tax-based incentive is more efficient than a direct expenditure intervention. Tax reliefs, no matter how worthwhile in themselves, may serve to narrow the tax base and can make general reform of the tax system that much more difficult.
233. Deputy Mark Ward asked the Minister for Finance further to Parliamentary Question No. 329 of 18 January 2023, the reason that cohabiting partners cannot be jointly assessed as cohabitants for tax purposes in the same way a married couple would be, in view of the fact that they are assessed jointly for social protection entitlements (details supplied); and if he will make a statement on the matter. [5328/23]
View answerThe basis for the current tax treatment of married couples derives from the Supreme Court decision in Murphy vs. Attorney General (1980). This decision was based on Article 41.3.1 of the Constitution where the State pledges to protect the institution of marriage. The decision held that it was contrary to the Constitution for a married couple, both of whom are working, to pay more tax than two single people living together and having the same income. The Constitutional protection of Article 41.3.1 does not extend to non-married couples.
As such, in situations where a couple is cohabiting, rather than married or in a civil partnership, each partner is treated for the purposes of income tax as a separate and unconnected individual. Because they are treated separately for tax purposes, credits, tax bands and reliefs cannot be transferred from one partner to the other.
In the event that the tax treatment of married couples was to be extended to cohabiting couples, consideration would need to be given to the practicalities that would arise for Revenue if they were to administer such a system.
It would be very difficult for Revenue to administer a regime for cohabitants, similar to that for married couples. Married couples and civil partners have a verifiable official confirmation of their status. It would be difficult, intrusive and time-consuming to confirm declarations by individuals that they were actually cohabiting and to establish when cohabitation started or ceased.
There would also be legal issues with regard to ‘connected persons’. To counter tax avoidance, ‘connected persons’ are frequently defined throughout the various Tax Acts. The definitions extend to relatives and children of spouses and civil partners. This would be very difficult to prove and enforce in respect of persons connected with a cohabiting couple where the couple has no legal recognition.
To the extent that there are differences in the tax treatment of the different categories of couples, such differences arise from the objective of dealing with different types of circumstances while at the same time respecting the constitutional requirements to protect the institution of marriage.
There may be an advantage in tax legislation for a married couple or civil partners as regards the extended rate band and the ability to transfer credits. However, the legal status for married couples has wider consequences from a tax perspective both for themselves and persons connected with them.
The tax treatment of couples was reviewed and considered as part of the 2020 Tax Strategy Group process. The Income Tax TSG Paper included an overview of the tax treatment of couples and outlined the rationale for the different treatment between married couples/civil partnerships and cohabiting couples. Further details can be located at the following link - www.gov.ie/en/publication/fdd38-budget-2021-tsg-papers/
The difference in tax treatment for married couples is not confined to Income Tax, and is also a feature of other tax heads, such as Capital Acquisitions Tax. Therefore, any changes in the tax treatment could only be considered in the broader context of the tax system and future social and legal policy development, given that the legal status of married couples has wider consequences than from a tax perspective.
The recent report of the Commission on Taxation and Welfare put forward no recommendation regarding the tax treatment of cohabiting couples. However, it did recommended a phased move towards individualisation of the Standard Rate Cut off Point as a step towards addressing disparities in the income tax system, facilitating increased employment, and decreasing the gap in the employment rate between men and women.
It should be noted that both the PRSI and Universal Social Charge are already applied on an individualised basis.
Finally, as signalled in the Budget, my Department has begun initial work on developing a medium-term roadmap for personal tax reform, taking account of the recent report of the CoTW, and considering a range of measures across income tax, USC and PRSI together with other related personal taxation issues.
I expect that, when completed, this work will help inform deliberations relating to a number of aspects of the income tax system in the context of future budgets.
