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 Header Item Written Answers Nos. 82-91
 Header Item Corporation Tax Regime
 Header Item Property Tax Administration
 Header Item Central Bank of Ireland
 Header Item Banking Sector
 Header Item Banking Sector
 Header Item Tax Code
 Header Item Financial Instruments
 Header Item National Debt
 Header Item Mortgage Arrears Proposals
 Header Item NAMA Loan Book

Thursday, 13 February 2014

Dáil Éireann Debate
Vol. 830 No. 3

First Page Previous Page Page of 77 Next Page Last Page

Written Answers Nos. 82-91

Corporation Tax Regime

 82. Deputy Terence Flanagan Information on Terence Flanagan Zoom on Terence Flanagan asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he has considered the introduction of a levy on corporation tax in the national interest; and if he will make a statement on the matter. [7286/14]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan Companies operating in Ireland are chargeable to corporation tax at the 12.5% rate on the profits that are generated from their trading activities here.  A higher 25% rate applies in respect of investment, rental and other non-trading profits, as well as certain petroleum, mining and land dealing activities, while chargeable capital gains are taxable at the capital gains tax rate of 33%. 

The Taoiseach, myself and other members of the Government have repeatedly expressed the Government's commitment to these rates and I do not foresee any changes in this regard.

Property Tax Administration

 83. Deputy Róisín Shortall Information on Róisín Shortall Zoom on Róisín Shortall asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the reason a local property tax letter was issued to a person (details supplied) in Dublin 9 living in a Dublin City Council senior citizens' complex; and if he will make a statement on the matter.  [7296/14]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am informed by Revenue that a key aspect of the work undertaken in regard to Local Property Tax (LPT) was the development of a comprehensive register of residential properties in the State. During the compilation of the Property Register some matching difficulties were encountered when consolidating the various Government and non-Government data sources and in a relatively small number of cases, properties were incorrectly linked to non-liable individuals. These incorrect linkages resulted in Revenue issuing LPT Returns or payment notifications to people in respect of properties, which they were not liable for.

 As part of its comprehensive LPT communications strategy, Revenue clearly stated that errors in the compilation of the Property Register were inevitable given the scale of the task. For that reason Revenue requested that anybody, including tenants, who received incorrect notifications to contact the Helpline as soon as possible to ensure that the record was amended to reflect the correct information, thereby avoiding any future unnecessary communications or compliance interventions.

In the specific case to which the Deputy refers, Revenue linked the person in question to the particular property based on data imported to the Property Register from another Government source, and issued her with an LPT 1 Return in March 2013. As Revenue did not receive any correspondence in regard to the issue, the Property Register was not updated with the correct information and a further Return/payment reminder letter issued to the person on 27 January 2014. 

Revenue has confirmed to me that on foot of the Deputy's representation it has examined the case and amended the Property Register to reflect the correct ownership details for the property in question.

Central Bank of Ireland

 84. Deputy Eoghan Murphy Information on Eoghan Murphy Zoom on Eoghan Murphy asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if it should be the practice of the Financial Regulator to publish the main decisions made by the office in a given year which are in the public interest.  [7309/14]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The Central Bank is statutorily obliged to publish information on the main issues addressed during the year including information on how it carried out its regulatory and supervisory activities.

  In accordance with Section 32L of the Central Bank Act 1942 (as amended), the Central Bank is required to prepare an Annual Performance Statement on its financial regulatory activities undertaken during the previous year within four months of the end of each financial year.

  In accordance with Section 32K of the Central Bank Act 1942 (as amended), the Central Bank is required to prepare an Annual Report on its activities during the year within six months after the end of each financial year,

  Both of these documents are laid before each House of the Oireachtas. 

  Furthermore, under Section 33BC of the Central Bank Act 1942 (as amended), the Central Bank must publish, subject to certain confidentiality requirements, the particulars of a prescribed contravention that is being or has been committed. The publication would normally include:

  - the name of the regulated entity on whom a sanction has been imposed;

  - details of the prescribed contravention(s) in respect of which the sanction has been imposed;

  - details of the sanction imposed; and

  - the grounds upon which the findings are based

   In addition, the Central Bank publishes annually, in summary form, information on its actions under Part IIIC of the Central Bank Act 1942 (as amended).

Banking Sector

 85. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he is satisfied with the manner in which Danske Bank closed its personal banking operations; his views on whether adequate notice was given to customers that their accounts were being closed; and if he will make a statement on the matter. [7326/14]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The Central Bank has informed me that, since Danske Bank's original announcement of its commercial decision to withdraw existing day to day personal customer products and services on a phased basis during the first half of 2014, and also to discontinue the provision of personal and business banking products to new customers, the Bank has been in communication with Danske Bank. Under the Central Bank's Consumer Protection Code, banks are required to give a minimum of 2 months' notice before they close a consumer's account. It is important that consumers are given adequate notice to allow them to take the required steps to close or transfer their accounts. Danske has confirmed that it provided this required notice in December last for those accounts closing in February and also that it issued reminder letters.

  I wish to highlight that all banks providing current accounts in Ireland are subject to the Central Bank's Current Account Switching Code, which is designed to make the process of switching current accounts easier and quicker and to offer protection and support for consumers when switching bank account.  The Switching Code places obligations and time limits on both the old and the new bank when completing the switching process.  Where accounts include credit facilities, such credit facilities will be subject to the credit assessment process applicable at the receiving bank.

  Customers with any concerns or questions about their accounts are advised to contact Danske Bank on telephone 1890 866 866 for Personal Banking and 1890 866 860 for Business Banking.  Other information is available on Danske Bank's website www.danskebank.ie.  If customers have made a complaint to Danske Bank and are not satisfied with the outcome, they have the right to refer the complaint to the Financial Services Ombudsman.

Banking Sector

 86. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the current value of the State's investments in AIB, Bank of Ireland and Permanent TSB; and if he will make a statement on the matter. [7327/14]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I can confirm for the Deputy the following in relation to the current valuation of the State's remaining investments in AIB, Bank of Ireland and Permanent tsb.

BankInvestmentValuationSource
Allied Irish BanksEquity€6.5bnNPRF
-Preference Shares€3.5bnNPRF
-Contingent capital (CoCo)€1.6bnPar redemption value
Bank of IrelandEquity€1.35bnCurrent market price
Permanent tsbContingent capital (CoCo)€0.4bnPar redemption value
  

  In addition to its investment in the CoCo, the State also has invested €2.3bn in Permanent tsb equity.  The State holds this investment at the investment value in the Finance Accounts. No recent independent valuation has been commissioned, nor is such an independent valuation required for the Finance Accounts.

Tax Code

 87. Deputy Róisín Shortall Information on Róisín Shortall Zoom on Róisín Shortall asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan further to the changes introduced in the Finance Act which have resulted in the loss of tax credits and tax band allowances for single parents, the steps, if any, he is taking to review the impact of these measures on the parents affected and to assess whether or not they are proportionate; and if he will commit as part of any review to consider the introduction of a system that bases the credit on proven maintenance payments in respect of the children concerned.  [7359/14]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The position is that the new Single Person Child Carer Tax Credit is designed to be an activation measure, which was the original intention behind the One Parent Family Tax Credit, which it replaced.   It is designed to be an in-work benefit to support a principal carer to take up, or remain in, employment.

The Commission on Taxation acknowledged that the One-Parent Family Tax Credit played a role in supporting and incentivising the labour market participation of single and widowed parents.  However, in its recommendations it concluded that the credit should be retained but that it should be allocated to the principal carer only. The restructuring of the credit achieves such an outcome. 

The Deputy will be aware that this issue was discussed at length during the passage of the recently enacted Finance (No. 2) Act 2013, during which I brought forward an amendment to allow the credit to be relinquished by a principal carer such that a secondary claimant can avail of it provided they meet certain qualifying conditions.. As such I do not intend to review the matter in the short term.

With regard to your proposal that consideration be given to linking the credit to proven maintenance payments, this would mean that more than one individual could again be in receipt of the tax credit in respect of the same child. It should be noted that married couples do not receive tax credits to help them with the costs of rearing their children and therefore it would not be appropriate to provide tax credits to individuals solely on the basis that they pay maintenance in respect of children from their former relationships. 

Financial Instruments

 88. Deputy Andrew Doyle Information on Andrew Doyle Zoom on Andrew Doyle asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he will indicate the tools to avoid excessive speculation in commodity derivatives under the new markets in financial instruments directive and regulation which he has described; if he will further indicate who the regulators here will be; and the commodity derivatives which will be affected here. [7397/14]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan On 14 January 2014, the European Parliament and the Council reached a provisional agreement on a revision of the Markets in Financial Instruments Directive (MiFID II) and a new Markets in Financial Instruments Regulation (MiFIR). The Directive and Regulation are likely to enter into force sometime in the middle of 2014, with transposition into national law to follow within the period allowed for.

In Ireland the Central Bank is the national competent authority, although the Deputy should note there are no commodity exchanges in Ireland. 

MiFIR will provide powers to national competent authorities, with the guiding hand of the European Securities Markets Authority (ESMA), to establish and apply position limits in commodity derivative markets. This will help curb excessive speculation in commodity derivative markets and serve to reduce price volatility in the underlying commodity markets.

The ESMA will be centrally involved in co-ordinating the position limit regimes among regulators. ESMA will also draw up the technical standards which lay down the details of how the rules will work.  Each regulated market, MTF or OTF will have to publish publicly a weekly report with the aggregated positions held by each firm, according to instrument type and the category of entity. There is also a position reporting obligation to national competent authorities. 

Furthermore, subject to the final agreement between the co-legislators, competent authorities will have product intervention powers whereby they may prohibit or restrict the trading of financial instruments in markets, including commodity derivative markets, when threre is a threat to the orderly functioning and integrity of the market in question.  

National Debt

 89. Deputy Terence Flanagan Information on Terence Flanagan Zoom on Terence Flanagan asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the size of the national debt over the past five years; the cost of servicing the debt in interest payments for the past five years and for 2014, 2015 and 2016; and if he will make a statement on the matter. [7404/14]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan A time series on the outstanding stock of national debt and the servicing of national debt is available in the Budgetary & Economic Statistics, published by my Department in late December. However, as general government debt expressed as a percentage of gross domestic product is the standard metric internationally for assessing debt levels, this is the more appropriate metric to look at and general government data sourced from Budget 2014 are provided below.

-General Government Debt-Interest on General Government Debt
Year€ billionas % of GDP€ billion
2009104.564.4%3.3
2010144.291.2%5.0
2011169.2104.1%5.3
2012192.5117.4%6.1
2013f205.9124.1%7.6
Source: CSO & Department of Finance---
Interest on General Government Debt-
Year€ billion
2014f8.2
2015f8.8
2016f9.2
Source: Budget 2014, Department of Finance-


  While the tables above show the Budget 2014 estimate of General Government debt for 2013, the Deputy will be aware that the National Treasury Management Agency completed the buyback, on the 17th of December 2013, of €4.102 billion of a 4% Treasury bond due to mature on 15 January 2014. One of the impacts of this buyback was to reduce the estimated General Government Debt for 2013 to around 122% of GDP.

Mortgage Arrears Proposals

 90. Deputy Terence Flanagan Information on Terence Flanagan Zoom on Terence Flanagan asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if his Department has approved AIB writing off debt by way of split mortgages and other products; his Department's policy in this area; and if he will make a statement on the matter.  [7406/14]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan As the Deputy will be aware under the Relationship Framework the State does not intervene in the day to day operations of the bank or their management decisions regarding commercial matters.  

  I have been informed by AIB that the split mortgage product is just one of a number of sustainable solutions available to customers in arrears. Customers in arrears will be reviewed for eligibility and debt compromise will not necessarily form part of the new split mortgage. The solution will be proposed to the customer based on their affordability if they are deemed to be eligible.   

  On a general policy level, however the Government has taken a number of important steps to address this serious problem.   

  An innovative Personal Insolvency Act is now in place and the Insolvency Service of Ireland has been established to operate the new non-judicial debt settlement arrangements along with the changes made to the bankruptcy rules.  A Mortgage to Rent scheme now provides a solution to keep those with severe mortgage difficulty to remain in their homes.  The Mortgage Advisory and Information Service has been established and includes an information website, a telephone helpline, and independent advice for mortgage holders.  The Central Bank is continuing its engagement with the lenders and has now introduced meaningful targets on the 6 main banks to offer solutions to their distressed mortgage holders.     

  All of the necessary elements to effect meaningful solutions to the mortgage arrears problem are now in place.  The expectation now is that the banks with the co-operation from their customers in difficulty will work together to ensure that this issue is addressed in a definitive manner over the course of 2014.   

NAMA Loan Book

 91. Deputy Lucinda Creighton Information on Lucinda Creighton Zoom on Lucinda Creighton asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan further to Parliamentary Question No. 47 of 22 January 2014, if the National Asset Management Agency will provide the information in the format requested, as promised; and if he will make a statement on the matter.  [7450/14]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by NAMA that the information is not currently available in the format sought by the Deputy but that it is currently collating the information in the format requested. I am further advised by NAMA that the informaiton will be provided to the Deputy, subject to any consideration of comericial senstivity,  by the 17th of February 2014.


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