Alan Farrell
Question:10. Deputy Alan Farrell asked the Minister for Finance his views on the progress in reducing inflation; and if he will make a statement on the matter. [15224/24]
View answerInflation Rate
Questions (10)
Written answers
Inflation reached multi-decade highs in 2022, averaging 8.1 per cent with a peak of 9.6 per cent in June 2022 (as measured by the HICP). Whilst the initial driver of this inflationary pressure was a surge in global energy prices, it subsequently became increasingly broad-based as price pressures spread throughout the economy.
Since then, significant progress has been made in reducing inflation with headline HICP inflation of just 1.7 per cent in March. This is the first time that inflation has been below 2 per cent since June 2021, and is down from 7 per cent in March of last year.
Key to this moderation has been the partial reversal of energy prices from extremely high levels. Energy prices in March are estimated to have decreased by 8.4 per cent compared to March last year. This decline captures the fall in wholesale energy prices being passed through to retail gas and electricity bills. I expect further cuts to take place throughout this year as this process continues.
The disinflation process has also spread beyond energy prices, with inflation falling substantially for food and non-energy goods prices. Food prices are estimated to have risen by just 2.6 per cent on a 12-month basis in March. This is significantly below the 13.3 per cent inflation recorded in March of last year.
However, I am conscious that many households are still facing cost of living challenges, with pockets of inflationary pressure still remaining. This is particularly the case for domestic sectors, especially services. Services inflation in February was 5.1 per cent, more than double the headline inflation rate. In part, this is due to capacity constraints in the economy with the labour market essentially at full-employment and supply-demand imbalances evident in a number sectors, including housing a key policy priority area for the Government, though some of these pressures are easing.
Throughout this period of high inflation, the Government has been at the forefront in supporting the most vulnerable. By responding swiftly, and decisively, the Government has helped to mitigate the impact of inflationary pressures on both businesses and households. The temporary and targeted nature of the measures taken by Government have been designed to avoid adding to the inflationary burden whilst providing support to those most in need.
My Department will publish inflation forecasts as part of the Stability Programme Update later this month, updating those published alongside Budget 2024.
Question No. 11 answered orally.
Legislative Process
Questions (12)
Darren O'Rourke
Question:12. Deputy Darren O'Rourke asked the Minister for Finance the status of the Future Ireland Fund and Infrastructure, Climate and Nature Fund Bill 2024; the reason for restricting access to the climate and nature fund until 2026; the process by which projects may apply for the fund; the expected timeline for decision-making and the intervals at which funds can be applied for or if they will be on a rolling basis; and if he will make a statement on the matter. [15183/24]
View answerWritten answers
The Future Ireland Fund and Infrastructure, Climate and Nature Fund Bill 2024 was published on 25 March 2024.
The Infrastructure, Climate and Nature Fund (ICN Fund) is one of the two new funds being established under this Bill. From 2026, it will be possible to draw down from the fund to support State expenditure in certain circumstances. The rationale for allowing access to the ICN Fund only from 2026 is to allow for resources to build up within the ICN Fund. Each year from 2024 to 2030, it is intended that €2 billion will be transferred into the ICN Fund.
In terms of the climate and nature aspect of the ICN Fund, the process outlined in the Bill provides for the designation of projects as “environmental projects”, where a relevant Minister is satisfied that the project contributes directly or indirectly, or is likely to so contribute to:
• A reduction of greenhouse gas emissions in the State;
• The achievement of environmental objectives derived from a number of EU Water Regulations (including those related to the quality of surface water, ground water and marine water);
• The achievement of conservation objectives or the implementation of conservation measures or administrative and contractual measures, established under the Birds and Habitats Directive, or
• The implementation of a plan, programme or strategy, the National Biodiversity Action Plan or guidelines under the Wildlife Act 2000.
The allocation of funding for “designated environmental projects” will be a process overseen by the Minister for Public Expenditure, NDP Delivery and Reform in consultation with relevant Ministers in line with the normal Estimates process.
Tax Yield
Questions (13)
Brendan Griffin
Question:13. Deputy Brendan Griffin asked the Minister for Finance the total tax take from fuel in 2023, broken down by category; how this figure compares with the estimated amount of total tax take from fuel as set out in Budget 2023 in October 2022; the total estimated tax take from fuel for 2024 as set out in Budget 2024 in October 2023, with a breakdown of each category; the estimated and actual figures for Quarter 1 2024; how much additional tax the planned excise increases in August are estimated to generate by year end; how much the recent excise increases on 1 April 2024 will generate by year end; if the planned August increase will be scrapped in light of the overall tax take performance and the negative impact of excise increases on individual motorists and the wider economy; and if he will make a statement on the matter. [15213/24]
View answerWritten answers
The Deputy should note at the outset that all energy products used for motor or heating purposes are subject to excise duty. Liquid fuels and natural gas used as a propellant are chargeable to Mineral Oil Tax. Natural gas used for all other fuel purposes is subject to Natural Gas Carbon Tax. Solid fuels, including coal, peat and peat products, are subject to Solid Fuel Carbon Tax. Mineral Oil Tax comprises a non-carbon component and a carbon component, also referred to as carbon tax. Natural Gas Carbon Tax and Solid Fuel Carbon Tax are “pure” carbon taxes in that they are comprised entirely of a carbon component.
In response to the global energy crisis, temporary cuts to Mineral Oil Tax rates on petrol, auto-diesel and marked gas oil were introduced in March 2022. Inclusive of VAT these cuts amounted to 21 cents, 16 cents and 5.4 cents per litre on petrol, auto-diesel and marked gas oil respectively, and were applied to the non-carbon component of Mineral Oil Tax. The cuts were due to be reversed in October 2022, but the restoration of rates was delayed until 1 March 2023 while the impacts of the global energy crisis continued. Finance Act 2023 postponed the reversal further and introduced provisions for Mineral Oil Tax rate increases on three dates: 1 June, 1 September, and 31 October 2023. The rate increases that were to come into effect on 31 October 2023 were postponed further and Finance (No. 2) Act 2023 provided for the increases to apply in equal amounts on 1 April and 1 August 2024.
The first stage of this final restoration of Mineral Oil Tax rate increases came into effect on 1 April 2024. Inclusive of VAT the Mineral Oil Tax rates on petrol, auto-diesel, and marked gas oil increased by 4, 3 and 1.7 cents per litre respectively. The amounts due as part of the final restoration scheduled for 1 August 2024 are similar in size , i.e. 4, 3 and 1.7 cents per litre respectively.
I am advised by Revenue that a breakdown of excise receipts for 2022 and prior years is available on the Revenue website at www.revenue.ie/en/corporate/information-about-revenue/statistics/excise/receipts-volume-and-price/excise-receipts-commodity.aspx
In relation to VAT, I am further advised by Revenue that traders are not required to identify the VAT yield generated from the supply of specific goods and services on their VAT returns. Therefore, it is not possible to provide the VAT yield on all fuel and energy related products and services using taxpayer information alone. However, using Revenue and third-party data sources, a tentative estimate of the VAT generated on fuel and energy products can be provided.
The provisional excise receipts in 2023 and in Quarter 1 2024 for Mineral Oil Tax (MOT), Solid Fuel Carbon Tax (SFCT), Natural Gas Carbon Tax (NGCT) and an estimate of VAT receipts in respect of fuels are provided in the first table of this PQ which the Deputy can review himself. However, in summary total fuel receipts for 2023 are estimated to be just over €3.4bn with receipts for quarter 1 being just under €900m .
|
Year |
2023 |
2024 Q1 |
|
MOT Receipts €m |
2,375.2 |
663.0 |
|
SFCT Receipts €m |
19.2 |
8.5 |
|
NGCT Receipts €m |
107.2 |
31.2 |
|
Estimated VAT Receipts €m |
900.4 |
186.0 |
|
Total Receipts €m |
3,402.0 |
888.7 |
I am further advised by Revenue that the estimated receipts in 2024 from the recent 1 April increase in MOT rates and the increase scheduled for 1 August are €102.4m for 1 April increase and just under €51m for 1 August increase.
Tax Data
Questions (14)
Paul Murphy
Question:14. Deputy Paul Murphy asked the Minister for Finance if the projection for corporate tax revenue in 2024 and 2025 is €24.5 billion and €25.8 billion (details supplied) respectively; the estimated gross trading profit before taxation in 2024 and 2025; to provide a monetary breakdown of projected total capital allowances and deductions before taxation in 2024 and 2025; and if he will make a statement on the matter. [15248/24]
View answerWritten answers
I am advised that my Department does not produce projections for gross trading profits or the usage of capital allowances. Detailed data on the calculation of corporation tax liabilities, including on these metrics, is published by the Revenue Commissioners.
This can be found on Revenue’s website at: www.revenue.ie/en/corporate/information-about-revenue/statistics/income-distributions/ct-calculation.aspxx. The most recent year for which data is available is 2021.
My Department’s corporation tax projections are underpinned by macroeconomic forecasts of gross operating surplus: this is a national accounts concept which is not directly equivalent to gross trading profits.
However, for the Deputy’s information, the most recent projections for gross operating surplus, at the time of Budget 2024, were for approximately €435 billion in 2024, rising to €460 billion next year. These projections will be reviewed as part of the forthcoming Stability Programme Update, which will be published in the coming weeks.
At the time of Budget 2024, corporation tax was projected to reach €24.5 billion for this year and €25.8 billion for 2025. These projections will also be reviewed as part of the Stability Programme Update.
The Deputy will be aware that, in the Q1 Exchequer returns which were published last week, corporation tax was more than €1 billion behind what had been profiled based on that figure of €24.5 billion for the year as a whole. However, I am advised that this is likely due to a timing issue. In other words, there may be a corresponding increase at a later point in the year that offsets this shortfall.
Financial Services
Questions (15)
Pearse Doherty
Question:15. Deputy Pearse Doherty asked the Minister for Finance to provide an update on consideration of changes to legislation to address the inability of consumers to make complaints to the Financial and Services Pensions Ombudsman with respect to vulture funds as a result of gaps in their regulation. [15234/24]
View answerWritten answers
The Financial Services and Pensions Ombudsman (FSPO) plays a vital role for consumers of financial services in Ireland, as part of a robust financial consumer protection framework. It is an independent, impartial, fair and free service that helps resolve complaints against financial service providers. The statutory functions of the FSPO are set out in the Financial Services and Pensions Ombudsman Act 2017.
The Deputy has raised the issue of the jurisdiction of the FSPO to look at complaints made against financial service providers while they were unregulated.
There a number of pieces of legislation in place that ensure consumers are protected when their loans are sold to non-banks.
Under the Consumer Protection (Regulation of Credit Servicing Firms) Act 2015 legislation, loan owners have to appoint credit servicing firms who are regulated by the Central Bank.
In 2018, the Consumer Protection (Regulation of Credit Servicing Firms) Act 2018 was enacted, so that the Central Bank now also regulates the person who either holds legal title to a loan, or has material rights to decide how a portfolio of loans is dealt with.
The FSPO, which is independent, has determined that it does not have jurisdiction to investigate the conduct of financial service providers before they became regulated entities.
I am currently seeking legal advice to ensure clarity on the scope of the FSPO's jurisdiction in relation to the issues raised, with the aim of ensuring the broadest possible access to the FSPO as an important part of a robust consumer protection framework.
As the Deputy is aware, I am presently bringing the Financial Services and Pensions Ombudsman (Amendment) Bill 2023 legislation through the Oireachtas to ensure the FSPO is on a constitutionally sound footing following the Supreme Court Zalewski ruling.
I have always advocated for the broadest regulatory and consumer protection regime possible, including access to the FSPO, and I have made clear that I am willing to introduce further legislative amendments should that be necessary and possible.
My officials continue to engage as a matter of priority with the FSPO on the issues raised, and to obtain the necessary legal advice and explore all relevant legal avenues.
Climate Action Plan
Questions (16)
Darren O'Rourke
Question:16. Deputy Darren O'Rourke asked the Minister for Finance his views on whether tax policy on luxury emissions can play a more active role in incentivising climate action; and if he will make a statement on the matter. [15184/24]
View answerWritten answers
The Deputy should note that Government policy with regard to greenhouse gas emissions and taxation is based on the polluter-pays principle, whereby high emission energy products, fuels or vehicles are subject to the highest levels of taxation. National taxation measures are reviewed and examined as part of the annual budgetary cycle and policy options are published in the Tax Strategy Group papers. As set out in the Budget 2024 Tax Strategy Group Paper on Climate Action and Tax, the policy challenge in addressing climate change involves striking the appropriate balance between incentivising uptake of cleaner fuels and technology whilst protecting the more vulnerable in society from energy and transport poverty.
National measures which address high emitting behaviours include the carbon tax, fuel excise and vehicles taxes, which operate on a polluter pays principal. Since 2020 additional revenue raised from increases in the carbon tax is allocated for expenditure measures which ensure a Just Transition including funding targeted social welfare interventions and community energy efficiency investment. Consistently, internal Government analysis using the SWITCH model has found that the increases in the carbon tax have been progressive as a result of the increased social protection payments funded by the carbon tax.
The Government is committed to decarbonising our transport sector and recent Budgets have seen reforms made to Vehicle Registration Tax or VRT, Motor Tax, the introduction of the NOx surcharge and an emissions-based calculation for benefit-in-kind. These tax changes aim to incentivise greener vehicles by ensuring that lower emission vehicles are taxed more favourably and higher emission vehicles pay higher rates. Typically speaking, many high emission new cars tend to have a higher Open Market Selling Price (OMSP). As VRT is calculated as a percentage of OMSP, the highest value and highest emission vehicles are subject to the highest rates of tax. This restructuring is already having a positive impact on the emissions landscape, with significant growth in the lower ‘greener’ Vehicle Registration Tax bands and a drop off in the higher, more ‘pollutant’ bands.
It is recognised that not all emissions are directly subject to indirect taxation. With regard to taxation of aviation fuel, Ireland’s excise duty treatment of fuel used for air navigation is governed by EU law as set out in Directive 2003/96/EC on the taxation of energy products and electricity, commonly known as the Energy Tax Directive. This currently provides for an exemption from taxation for aviation fuel for intra community flights, while international treaties lay the framework for an exemption for fuel used internationally. In July 2021, as part of the Fit for 55 Package, the Commission published a proposal to revise the Energy Tax Directive. The taxation of intra-community flights forms part of this proposal. Ireland has been actively engaged in negotiations of this proposal, which are ongoing.
It should also be noted that industrial emissions from large installations are subject to significant carbon pricing under the EU Emissions Trading System or EU ETS. The aviation industry is subject to the EU ETS.
My Department is committed to its role in using taxation as one of the policy levers which can contribute to Ireland meeting our emission reduction targets. Tax policy with regard to behavioural change, and emissions, is kept under review as part of the Tax Strategy Group (TSG) and Budgetary cycle.
Insurance Industry
Questions (17)
Ruairí Ó Murchú
Question:17. Deputy Ruairí Ó Murchú asked the Minister for Finance to provide an update on the work of the Office for the Promotion of Competition in the Insurance Market, particularly in relation to reducing the cost of public liability insurance; to outline his Department’s recent engagement with insurance companies, including new insurance companies, about the high cost of public liability insurance; and if he will make a statement on the matter. [15158/24]
View answerWritten answers
Insurance reform is a key priority for this Government and is being delivered via the Action Plan for Insurance Reform. As per the most recent Action Plan Implementation Report, published in February 2024, the vast bulk of the actions it contains are now either delivered or initiated. The importance that Government places on the Action Plan is evidenced by the fact that implementation is overseen by a Cabinet Committee Sub-Group on Insurance Reform, chaired by the Tánaiste. Nevertheless, Government is aware that certain groups are currently facing difficulty in terms of affordability and availability of public liability insurance, and has therefore continued to prioritise the delivery of the Action Plan, which will bring benefits to individuals, businesses and households alike.
The establishment of the Office to Promote Competition in the Insurance Market is a Programme for Government commitment. Overseen by the Minister of State at the Department of Finance, its aims are to help expand the risk appetite of existing insurers and explore opportunities for new market entrants. As part of this, the Office is in regular contact with areas that are experiencing insurance issues. It has become clear that the market is responding positively to the Government reform agenda, with insurance now available in previously difficult areas such as; equestrian activities: inflatable hire; ice-skating; sport clubs; play centres; and SMEs. The Office continues to assist in the connection of various groups experiencing insurance difficulties to relevant stakeholders, and will also maintain its engagement with IDA Ireland to help leverage the ongoing insurance reforms with the objective of targeting new entrants to the Irish market.
In conclusion, I wish to assure the Deputy of the Government’s intention to ensure that the ongoing implementation of the Action Plan for Insurance Reform will continue to secure the availability and affordability of this key financial service.
Question No. 18 answered with Question No. 9.
Tax Reliefs
Questions (19, 34)
Thomas Gould
Question:19. Deputy Thomas Gould asked the Minister for Finance the number of people who claimed mortgage interest tax relief last year; and the average payment. [15219/24]
View answer
Willie O'Dea
Question:34. Deputy Willie O'Dea asked the Minister for Finance if he will report on the mortgage interest tax relief scheme and its operation to date in 2024. [14268/24]
View answerWritten answers
I propose to take Questions Nos. 19 and 34 together.
Mortgage Interest Tax Relief (MITR) is available to home owners with an outstanding mortgage balance on their principal private residence of between €80,000 and €500,000 on 31 December 2022.
It is available at the standard rate of income tax and is based on the increase in the interest paid in 2023 over interest paid in 2022. The value of the relief is equal to the lesser of 20 per cent of this excess interest amount or a maximum of €1,250.
Where the interest payments in respect of either the 2022 or 2023 tax years are not for a full year, pro-rating will apply, to ensure interest is applied on a period of equivalence basis and that the cap is adjusted accordingly.
In order to avail of the relief, the taxpayer must file a 2023 Income Tax Return and upload their certificate of mortgage interest for 2022 and 2023, and confirmation of their mortgage balance at 31 December 2022. Furthermore, the taxpayer must be compliant with Local Property Tax requirements and must have paid income tax in 2023. The relief operates by way of a credit offset against a taxpayer’s income tax liability for 2023.
I am advised by Revenue that, as of 3 April 2024, 17,059 taxpayer units made a claim for this credit on their 2023 PAYE income tax return. 14,762 claimants received a refund of tax, with the average refund paid of €951.74 and the total of refunds issued is in excess of €14 million. Of these, 188 claimants paid tax which was less than the full credit claimed. Revenue notes that other credits and reliefs claimed, such as health expenses, may also have contributed to the overall amount of refunds issued.
A further 2,091 claimants are either in a balanced position or had an underpayment reduced by the credit being applied to their record. An additional 206 claimants are not in a position to benefit from the credit as they did not pay any income tax in 2023.
Data is not available in respect of the number of people who may be entitled to claim the tax credit but who have not yet filed a return and made a claim. Furthermore, information is not yet available for self-assessed taxpayers as these taxpayers have until 31 October 2024 to submit their 2023 Income Tax Return.
In summary, a claimant must have an income tax liability to benefit from the credit. If a claimant has no income tax liability (for whatever reason), he or she will not benefit from the credit. If the credit due exceeds the claimant’s income tax liability, the credit will apply to the extent that it reduces the claimant’s income tax liability for 2023 to nil.
Tax Credits
Questions (20)
Richard Bruton
Question:20. Deputy Richard Bruton asked the Minister for Finance if he has considered the extent of unclaimed tax allowances and other benefits; if he would consider establishing a cross-Government initiative to promote better take-up of such benefits; and if he will make a statement on the matter. [15263/24]
View answerWritten answers
I am advised by Revenue that it is not possible to provide the Deputy with an estimate of unclaimed tax allowances and other benefits. Any overpayments due to PAYE taxpayers can only be quantified when they submit their Income Tax Returns at the end of the year and claim any additional credits or reliefs that may be due.
At the end of every year, Revenue makes an Employment Detail Summary and a Preliminary End of Year Statement (PEOYS) available to employees based on information available and indicate whether their tax position is balanced, underpaid, or overpaid for the year.
If a taxpayer wishes to claim additional credits, reliefs, or expenses they will need to complete an Income Tax return for the year. Revenue will then generate a Statement of Liability confirming their final tax position.
I am advised by Revenue that, nearly 819,000 taxpayers have already filed their 2023 Income Tax Return and refunds of €499 million have been issued to 615,000 taxpayers. 810,000 taxpayers had filed their 2022 Income Tax Return by the end of quarter 1 2023, and at the same point in 2022 641,000 taxpayers had filed their 2021 Income Tax Return.
Revenue regularly issues letters to taxpayers who, according to their PEOYS, may have either overpaid or underpaid tax in a particular tax year, advising recipients to submit an Income Tax return to claim any additional tax credits or reliefs that they may be due and/or to declare any additional income they may have received, including a reminder of the four-year time limit in respect of submitting such claims.
In February, Revenue, in conjunction with my Department launched an extensive information campaign to raise awareness among PAYE taxpayers about Revenue’s quick, easy, and free to use myAccount service, which taxpayers can use to finalise their tax position. It also informed PAYE taxpayers about the range of tax credits and reliefs available, and how they can claim those credits and reliefs.
Campaign information was shared with other Government Departments through our Government Information Service (GIS) platform, with other Departments asked to amplify the campaign message, as they do with all such campaigns for Government Departments/agencies.
Banking Sector
Questions (21)
Barry Cowen
Question:21. Deputy Barry Cowen asked the Minister for Finance the measures he is putting in place so that future banking changes are managed in a controlled, fair and transparent manner for consumers; and if he will make a statement on the matter. [14273/24]
View answerWritten answers
Throughout recent changes to the banking sector, including the departure of two banks from the Irish market, the existing robust financial consumer protection framework has supported consumers of financial services in Ireland.
Notwithstanding the strong consumer protection framework in Ireland, the retail banking sector is subject to ongoing change. While some of this is driven by statutory and regulatory changes, many changes that affect consumers are driven by the industry itself as it introduces new products and services or withdraws older product and services. Industry can also change its service offering including in terms of bank branches and ATMs.
Where changes are introduced because of statutory or regulatory reforms, often through EU Directives and Regulations, it is a priority for me and my Department to put the consumer at the centre of our considerations during the negotiations.
We also make changes through domestic legislation that are expressly for the purpose of protecting the needs of consumers. In that regard, my Department is currently drafting the Access to Cash Bill to provide continued sufficient and effective access to cash and to ensure that the future of evolution of cash infrastructure is managed under a statutory framework in a fair and transparent manner for consumers.
I would like to thank the Joint Oireachtas Committee on Finance, Public Expenditure and Reform and Taoiseach for its quick production of its Pre-Legislative Scrutiny Report, which I will take into account in the drafting of the Bill.
The Deputy will be aware that the Access to Cash Bill arose following a recommendation in the Retail Banking Review. The Government approved and published the comprehensive Retail Banking Review in November 2022 and the implementation of its 34 recommendations, including on Access to Cash, are now Government policy.
As noted above, many changes in the banking sector flow from industry driven initiatives and changes. While decisions relating to the business model of regulated firms are commercial matters for the boards of those firms, the Central Bank notes that it expects firms to take a consumer-focused approach in respect of any decision that affects their customers. It is the responsibility of the individual banks to ensure that they are putting their customer first, ensuring fair treatment of customers and that customers understand what the changes mean for them.
In terms of consumer protections and future changes, the Central Bank is also currently undertaking a major review of its Consumer Protection Code (the Code). The aim of the Code review is to ensure an updated and modernised Code is in place which is centred around firms securing customers’ interests and delivering positive consumer outcomes. A public consultation process on the revised Code proposals will be open until 7 June 2024. Enhancements being proposed by the Central Bank in the revised Code include:
• increasing the minimum notice period for banks to six months where they intend to close, merge or move a branch and to four months where they intend to significantly change services in a branch;
• requiring banks to publish board-approved assessments of the impact of the changes on customers; and
• requiring banks to conduct an ex-post assessment to include a survey of impacted customers nine months after the change, which must be completed before 15 months has elapsed since the change.
Finally, the Central Bank (Individual Accountability Framework) Act 2023 was signed into law on 9 March 2023. The Act is designed to introduce greater personal accountability for persons in senior roles in financial services firms, to introduce conduct standards for all those performing controlled functions in the financial services sector and to contribute to the transformation of culture in the sector.
The Act significantly enhances the powers of the Central Bank to ensure that regulated financial service providers and those working for them act in the best interests of consumers and builds on the powers granted to the Central Bank under the Central Bank Reform Act 2010 and the Central Bank (Supervision and Enforcement) Act 2013.
The Individual Accountability Framework will drive positive changes in terms of wider banking culture, and enhanced accountability while simplifying the taking of sanctions against individuals who fail in their financial sector roles. It gives the Central Bank the regulatory tools necessary to ensure that consumers dealing with financial service providers in Ireland can be confident that their best interests will be protected.
The Act ultimately seeks to improve the culture of the financial sector and boost public trust in it.
Banking Sector
Questions (22)
Cormac Devlin
Question:22. Deputy Cormac Devlin asked the Minister for Finance the status of the National Payments Strategy; and if he will make a statement on the matter. [14271/24]
View answerWritten answers
You will be aware that the Retail Banking Review, published in November 2022, made two clear recommendations regarding payments: (1) for my Department to develop Access to Cash legislation and prepare a related Heads of a Bill in 2023; and (2) for my Department to lead on the development of a National Payments Strategy (NPS) in 2024.
I published the terms of reference for the National Payments Strategy (NPS) in June 2023, and work on the NPS has commenced, taking account of the changing payment landscape and ongoing legislative developments at EU level, including proposals on instant payments, payment services, legal tender and the digital euro.
My Department sought views from across Irish society though a public consultation. A consultation paper on the National Payments Strategy was prepared to guide the discussion and is available on the Department’s website. This consultation was open for nine weeks and closed on 14 February 2024. The responses to the public consultation will form an important part of the National Payments Strategy to be published in 2024.
The consultation paper had three main areas of focus:
• Payments roadmap
• Acceptance of cash
• Access to cash [the development of the access to cash legislation is a separate work stream]
The payments roadmap describes the payments landscape in Ireland and covers a number of topical issues, including instant payments, open banking and fraud. The section on access to cash complements the domestic legislation which is currently in train. Specifically, the access to cash section examines current cash usage in Ireland and then looks at potential future changes to the access to cash criteria to be decided in domestic legislation. The section on acceptance of cash considers cash as a form of payment, and a government policy on acceptance or facilitation of cash by public bodies as well as key sectors
In parallel with the consultation paper being open, a team within my Department engaged with a wide variety of stakeholders from across industry and civil society. This included, representative bodies for vulnerable groups, actors in the banking and payments ecosystem as well as regulatory bodies.
A review of all submissions received as part of the consultation process is underway and I plan to publish a high-level summary shortly. Engagement with stakeholders will continue until the Strategy is finalised, by end 2024.
Banking Sector
Questions (23, 39)
Seán Haughey
Question:23. Deputy Seán Haughey asked the Minister for Finance his plans to extend the powers of the Central Bank in relation to the regulation of ATMs; and if he will make a statement on the matter. [14267/24]
View answerWillie O'Dea
Question:39. Deputy Willie O'Dea asked the Minister for Finance how he proposes to protect the role of cash in our society and economy in the future; and if he will make a statement on the matter. [14269/24]
View answerWritten answers
I propose to take Questions Nos. 23 and 39 together.
The Department of Finance's Retail Banking Review, published in November 2022, concluded that cash, despite a decline in its usage, remains an important element of the payments system and the broader economy and it is essential that cash remains readily available to customers through ATMs and other means across the country.
The Review recommended that the Department of Finance should develop Access to Cash legislation and prepare heads of a bill with the initial objective of developing criteria that would secure access to cash at about the levels prevailing in December 2022. It would also provide for such criteria to be amended appropriately in future as and when cash usage declines further.
Arising from this recommendation, on the 23rd of January, I published the General Scheme of the Access to Cash Bill 2024, which will establish a framework to provide that any future evolution of the cash infrastructure will be managed in a fair, orderly, transparent, and equitable manner.
The legislation will allow me to prescribe regional requirements for the minimum numbers of ATMs per 100,000 people, the proportion of the population that must be no more than 10 km from an ATM, and the proportion of the population that must be no more than 10 km from a “cash service point”.
The Bill will require entities, whose share of current accounts and household deposits exceed percentages I will prescribe, to be responsible for maintaining access to cash levels. The designated entities, as they will be known, will, initially, be the three main retail banks.
The Bill also provides for the remedying of “local deficiencies.” These are locations within a Nomenclature of Territorial Units for Statistics (NUTS3) region where particular difficulties arise in accessing cash. The Central Bank will assess such cases and, where warranted, may require designated entities to address the issue. The Central Bank will prepare and publish guidance on local deficiencies prior to implementation of this provision.
The Retail Banking Review also called on Department officials to require ATM operators to be authorised and supervised by the Central Bank, and to provide the Central Bank with responsibility and powers to protect the resilience of the cash system - including the authorisation and supervision of cash-in-transit firms in respect of their cash handling activities and related financial services.
Although ATM deployers are required to comply with various security requirements set by the Private Security Authority, the operation of ATMs is not currently regulated by the Central Bank. As a result, there are no codes or regulations governing service standards, including hours of operation, denomination stocking, outages and maximum repair times. Reporting is voluntary.
There is also no requirement to give notice of decisions to close or install ATMs or indeed of a decision to exit the business or enter it. The Access to Cash Bill will address these matters.
The Drafting of the Access to Cash Bill is a priority, and it is being progressed as such. I would like to highlight my appreciation for the input of the Joint Committee on Finance, Public Expenditure and Reform and Taoiseach, who recently and promptly published their pre-legislative scrutiny report on the Access to Cash Bill.
The report of the Committee is welcomed, and the recommendations therein will be considered as the drafting of the Bill continues.
Tax Credits
Questions (24, 41)
Barry Cowen
Question:24. Deputy Barry Cowen asked the Minister for Finance how many rent tax credit claims have been made as of 31 March 2024, or the latest date available; and if he will make a statement on the matter. [14272/24]
View answerAlan Farrell
Question:41. Deputy Alan Farrell asked the Minister for Finance to provide an update on the number of people who have claimed the renters tax credit, in 2023 and 2024 respectively; and if he will make a statement on the matter. [15223/24]
View answerWritten answers
I propose to take Questions Nos. 24 and 41 together.
The Rent Tax Credit, as provided for in section 473B of the Taxes Consolidation Act 1997 (TCA 1997), was introduced by the Finance Act 2022 and may be claimed in respect of qualifying rent paid in 2022 and subsequent years to end-2025.
I am advised by Revenue that the Rent Tax Credit statistics currently available refer only to claims by PAYE taxpayers. Data on claims by self-assessed taxpayers are not yet available. These data will be available, in respect of the 2022 year of assessment, later in Q2 2024 when the self-assessed tax returns for that year, filed in late 2023, are fully analysed.
Claims in respect of the 2022 and 2023 years of assessment can still be made by PAYE taxpayers by submitting an Income Tax return for the relevant year. For claims relating to 2024, PAYE taxpayers have the option of claiming the Rent Tax Credit due to them as rent is incurred through Revenue’s easily accessible on-line MyAccount service or at the end of the year through their Income Tax return.
Rent Tax Credit claims are made are on a ‘taxpayer unit’ basis. A taxpayer unit is either an individual with any personal status who is singly assessed or a couple in a marriage or civil partnership who have elected for joint assessment.
I am further advised that as of 3 April 2024, over 547,440 Rent Tax Credit claims have been made by 344,792 taxpayer units consisting of:
(i) 99,548 taxpayer units that made claims for 2022 only,
(ii) 143,404 taxpayer units that made claims for both 2022 and 2023,
(iii) 5,091 taxpayer units that made claims for both 2022 and 2024,
(iv) 58,563 taxpayer units that made claims for 2023 only,
(v) 9,413 taxpayer units that made claims for both 2023 and 2024,
(vi) 6,403 taxpayer units that made claims for 2024 only,
(vii) 22,370 taxpayer units that made claims for 2022, 2023, and 2024.
Vacant Properties
Questions (25)
Paul Murphy
Question:25. Deputy Paul Murphy asked the Minister for Finance if he is planning any further taxation measures to address the problem of vacant and derelict properties; and if he will make a statement on the matter. [15246/24]
View answerWritten answers
The Deputy will be aware that it is a long-standing 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.
The Government is acutely aware of the difficulties in the housing market and the challenges this presents for many people and families at the moment. The need to address vacancy and to ensure all viable housing stock is being used is a priority for the Government. In Housing for All, the Government has set out a suite of incentives to address vacancy and efficient use of existing stock.
Following on from a commitment made in Housing for All, a new Vacant Homes Tax was announced in Budget 2023 and legislated for in Finance Act 2022. The first chargeable period was 1 November 2022 to 31 October 2023 and the tax was payable on 1 January 2024. The rate of the tax was increased, in Budget 2024, from three times to five times the property’s existing base local property tax rate from the next chargeable period ending 31 October 2024.
The Vacant Homes Action Plan, which was launched by my colleague, the Minister for Housing, Local Government and Heritage in January 2023, outlines the significant progress that has been made in addressing vacancy, along with the actions that are being pursued to return as many vacant properties back into use as possible. A range of schemes and supports have been implemented by the Government to address vacancy and bring properties back into use. Initiatives such as the Vacant Property Refurbishment Grant under the Croí Cónaithe Towns Fund, provide financial incentives for people to buy and refurbish vacant properties and sites; while the Repair and Leasing and Buy and Renew Schemes involve the Local Authority leasing or buying the vacant property from the owner to assist in the provision of social housing. The Urban Regeneration Development Fund provides funding for, amongst other things, local authorities to acquire vacant or derelict properties and sites for re-use or sale, and the CPO Activation Programme, launched in April 2023, provides for a planned, proactive and systematic approach by local authorities to bring vacant and derelict properties back into use. All local authorities now have a dedicated Vacant Homes Officer, funded by the Department of Housing, Local and Heritage, ensuring a dedicated focus on tackling vacancy.
With regards to dereliction, I understand the Department of Housing, Local Government and Heritage continues to liaise with Local Authorities on the implementation of the Derelict Sites Act 1990 with a view to improving its effectiveness.
As the Deputy will appreciate, proposals for any potential tax measures must be assessed carefully and need to be targeted and clear in their policy intent. That said, my Department continues to monitor all aspects of the property market, including vacant and derelict properties, and I will continue to work with my colleagues in Government to ensure that any further interventions in the housing market are appropriately calibrated, represent the best use of scarce public resources and boost the supply of much-needed housing in the State.