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 Header Item Written Answers Nos. 68 to 74
 Header Item Fuel Laundering
 Header Item Banking Sector Staff Issues
 Header Item Budget 2014 Issues
 Header Item Tax Code
 Header Item Tax Collection
 Header Item Tax Code

Wednesday, 3 July 2013

Dáil Éireann Debate
Vol. 809 No. 3

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Written Answers Nos. 68 to 74

  Question No. 68 answered with Question No. 66.

Fuel Laundering

 69. Deputy Catherine Murphy Information on Catherine Murphy Zoom on Catherine Murphy asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he will confirm the amounts spent by the State in each year for the past five years to operate and maintain the addition of dye to diesel used for certain industrial and commercial purposes; if he will further outline the estimated revenue lost to the State from the laundering of such fuels illegally in respect of the same years if such figures are available; and if he will make a statement on the matter. [32361/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by the Revenue Commissioners, who have responsibility for the collection of mineral oil tax, that the cost of adding the prescribed markers to rebated fuel is borne by the industry rather than the Exchequer. It has been suggested recently that huge savings could be made by moving from the current system of marking rebated fuel to one based on making repayments to those users that currently use marked fuel. This seems to be based on the erroneous view that adding the prescribed markers to rebated fuel is exceptionally costly and is borne by the Exchequer. This is not the case; the cost of the markers is negligible and is borne by the industry. The cost to the exchequer of marked fuel is the tax foregone and an alternative system based on direct repayments to users would not produce any savings for the exchequer and might be more costly if the incidence of fraud were greater. This system of marking diesel has been an effective and efficient means of delivering a tax rebate on a product used by a very large number of users across a wide range of uses. Fuel laundering to remove the marker added to lower-taxed mineral oil for off-road use has been a persistent problem over the years. However, it remained a marginal activity because the sulphur content of marked fuel was higher than that for road fuel and therefore the sulphur content continued to distinguish laundered fuel from genuine road fuel. Environmental requirements in relation to the sulphur content of fuel changed from the beginning of 2011, which resulted in marked fuel with the same sulphur content as road fuel coming onto the market. With this change, fuel laundering became more viable and criminal gangs intensified their laundering and distribution activities dramatically from the first half of 2011.

  The Deputy will appreciate that it is not possible to estimate accurately the loss to the Exchequer from particular activities in the shadow economy such as fuel laundering. It is clear, however, that illegal activity in the fuel market is significant, and that it poses a threat to the tax yield and to legitimate business. Revenue, therefore, has made action against fuel laundering one of its priorities and is implementing a comprehensive strategy to tackle the problem through enhanced supply chain controls, the acquisition of a more effective fuel marker and continued robust enforcement action. This strategy included strengthening the licensing conditions for auto-fuel traders in 2011 and the introduction of a new licensing system for marked fuel traders in October 2012. In addition, since January 2013, all licensed fuel traders are required to make electronic returns to Revenue of their fuel transactions each month. These supply chain control measures are designed to make it difficult for fuel criminals to source marked fuel for laundering and to get laundered product onto the market. Analysis of the monthly returns of fuel trading will enable Revenue to identify suspicious or anomalous fuel transactions and patterns of distribution. Analysis of the first few months of returns data is well advanced. Traders found to be involved in suspicious activity will be investigated and if they are unable to account properly for the source or disposal of product will face revocation of their licence, tax assessment and prosecution where appropriate. In addition, Revenue and HM Revenue & Customs in the UK signed a Memorandum of Understanding in May 2012 on a joint approach to finding a more effective marker for use in both jurisdictions. A number of proposals for a new marker submitted in response to an Invitation to Make Submissions are currently being evaluated. The outcome of this process is expected later this year. Revenue, in co-operation with other law enforcement agencies on both sides of the border, continues to intensify enforcement action against fuel fraud and this work has yielded significant results to date. In the past two years 97 filling stations throughout the State were closed for breaches of licensing conditions. Since the beginning of 2010, over 2.8 million litres of fuel have been seized and 29 oil laundries detected and closed down, including 5 oil laundries in 2013 to date. Revenue regularly reminds motorists and the public generally that, in addition to its impact on the exchequer and legitimate trade, they should be aware of the risks posed to their vehicles by using laundered fuel and the fact that sourcing fuel in this way is funding criminal activity. The legitimate retail trade can also contribute to closing down this illegitimate trade by providing information on the outlets that are selling laundered diesel. Revenue chairs the Hidden Economy Monitoring Group (HEMG) and has established Regional sub-groups of the HEMG to facilitate the reporting of information by traders through their representative associations. Retailers who suspect or have evidence that laundered diesel is being sold in their area should report this through their representative associations to the Revenue. Such reports are treated as confidential and are fully investigated by Revenue.

Banking Sector Staff Issues

 70. Deputy Joe McHugh Information on Joe McHugh Zoom on Joe McHugh asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if officials who were employed in banks that received bailout and contingency funding from the Central Bank and other State institutions, were bound by the code of the Civil Service that relates to the achievement of an excellent service for Government and the other institutions of the State as well as for the public as citizens and users of public services, based on principles of integrity, impartiality, effectiveness, equity and accountability; and if he will make a statement on the matter.  [32331/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan My ministerial colleague, the Minister for Public Expenditure and Reform, has received an identical question (Dáil question number 145, PQ 32332/13 which is also for answer today) and he will provide the Deputy with the details he is requesting on behalf of both departments.

Budget 2014 Issues

 71. Deputy Michael Healy-Rae Information on Michael Healy-Rae Zoom on Michael Healy-Rae asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the way it is justifiable to take €280 a year from 300,000 pensioners in budget 2014; and if he will make a statement on the matter.  [32370/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I assume the Deputy is referring to certain media reports which indicate that Budget 2014 will contain measures to extend the Universal Social Charge to include the Contributory State Pension. 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

 72. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan further to Parliamentary Question No. 82 of 26 June, if he will outline the effective tax rate effect for income earners whose tax credits were phased out with a reduction of half the credits between €100,000 and €150,000; three quarters of the credits between €150,000 and €200,000; and abolished over €200,000; based on the current tax rates; but also setting out a table of what the effective rate would be if a new third tax rate of 48% was introduced on income over €100,000. [32381/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by the Revenue Commissioners that the increases in the effective tax rates, estimated by reference to 2013 incomes, that would be brought about by reducing the main personal and employee tax credits in the manner mentioned by the deputy in parliamentary question 30922/13 are set out in respect of each specified income range as follows.

Range of Gross Income.Reduction in tax credits

Increase in effective rates of income tax.

Percentage points %
€100,000 to € 150,000+ 2.16
€ 150,001 to € 200,000+ 2.07
Over € 200,000+ 1.06


  If the impact of a new third tax rate of 48% on taxable income over €100,000 is included with the reductions in tax credits already mentioned the corresponding combined increases   in the effective tax rates are estimated as follows.
Range of Gross Income.Reduction in tax credits and new top tax rate of 48%

Increase in effective rates of income tax

Percentage points %
€100,000 to € 150,000+ 2.5
€ 150,001 to € 200,000+ 3.5
Over € 200,000+ 4.87


  The figures for increases in effective tax rates are obtained by calculating the tax increases arising from the changes as a percentage of the total gross income of income earners in each of the specified income ranges. It should be noted that the income ranges shown in the above table relate to Gross Income as defined in Revenue Statistical Report 2011. These figures are estimates from the Revenue tax-forecasting model using actual data for the year 2010 adjusted as necessary for income and employment trends in the interim. They are therefore provisional and likely to be revised. It should also be noted that a married couple who has elected or has been deemed to have elected for joint assessment is counted as one tax unit.

Tax Collection

 73. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan further to Parliamentary Question No. 82 of 26 June 2013, if he will set out the additional average tax paid by employees in the categories mentioned if the employees were also subject to a new third rate of tax of 48% on income earned in excess of €100,000. [32382/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by the Revenue Commissioners that if the main personal and employee tax credits were to be restricted in the manner mentioned by the deputy in parliamentary question number 30922/13 of 26 June, and additionally, if a new third rate of tax of 48% on taxable income in excess of €100,000 was introduced, the additional average tax payable by employees, estimated by reference to 2013 incomes, is set out in respect of each of the specified income categories as follows.

Range of Gross IncomeAverage additional

tax payable

per income earner

 within the income range
€100,000 to € 150,000€ 3,397
€150,001 to € 200,000€ 7,196
Over € 200,000€ 18,208


  The employees who have been taken into account in these calculations do not include proprietary directors who, while formally taxed under the PAYE system, are more akin to the self-employed. An individual is not entitled to the employee (PAYE) tax credit against emoluments paid by a company to that individual as a proprietory director. It should be noted that the income ranges shown in the above table relate to Gross Income as defined in Revenue Statistical Report 2011. These figures are estimates from the Revenue tax-forecasting model using actual data for the year 2010 adjusted as necessary for income and employment trends in the interim. They are therefore provisional and likely to be revised. It should also be noted that a married couple who has elected or has been deemed to have elected for joint assessment is counted as one tax unit.

Tax Code

 74. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the revenue that would be raised if personal and not employee tax credits for high income earners were phased out with a reduction of half the credits between €100,000 and €150,000, three quarters of the credits between €150,000 and €200,000, and abolished over €200,000; the impact that would have on the average tax take from salary earners in that category; and the impact that would have on income earners in those categories if they were also subject to a new third rate of tax of 48% on income earned over €100,000.  [32383/13]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by the Revenue Commissioners that the estimated full year yield to the Exchequer, estimated by reference to 2013 incomes, of reducing the main personal income tax credits, but not the employee tax credit, for all income earners in the manner mentioned by the Deputy, would be of the order of €204 million. A breakdown of the estimated Exchequer yield by each specified income range, together with an indication of the average additional tax payable by income earners within each income range, is as follows.

Range of Gross IncomeEstimated yield

to the Exchequer

€m
Average additional

tax payable per

income earner within

the gross income range
€100,000 to € 150,000 101€ 1,540
€ 150,001 to € 200,000  41€ 2,305
Over € 200,000 62€ 3,079


  If the impact of a new third tax rate of 48% on taxable income over €100,000 is included with the reductions in tax credits already mentioned above, the corresponding average additional tax payable by income earners within each income range, is as follows.
Range of Gross IncomeAverage additional

tax take per income

 earner within the

gross income range
€100,000 to € 150,000€ 1,954
€ 150,001 to € 200,000€ 4,757
Over € 200,000€ 17,668


  It should be noted that the income ranges shown in the above table relate to Gross Income as defined in Revenue Statistical Report 2011. These figures are estimates from the Revenue tax-forecasting model using actual data for the year 2010 adjusted as necessary for income and employment trends in the interim. They are therefore provisional and likely to be revised. It should also be noted that a married couple who has elected or has been deemed to have elected for joint assessment is counted as one tax unit.


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