Matt Carthy
Ceist:82. Deputy Matt Carthy asked the Minister for Finance his proposals to reduce insurance costs for motorists and business owners. [28528/24]
Amharc ar fhreagraInsurance Industry
Ceisteanna (82)
Freagraí scríofa
This Government remains strongly committed to achieving a competitive and sustainable insurance market where insurance is affordable and available to all. The implementation of the Action Plan for Insurance Reform is progressing well, with vast bulk of actions now complete, and all ten principal actions finalised.
Insurance reform is a priority for the Government, overseen by the Cabinet Committee Sub-Group on Insurance Reform. The approach involves targeted action across Government departments to enhance the domestic operating environment for insurers. However, under EU legislation (Solvency II Directive), the Government cannot compel insurers in terms of coverage or pricing, as underwriting decisions are based on insurers assessments of risk.
Turning to motor, insurance rates have decreased by around 40 percent since their peak in July 2016, and new capacity is entering the market, benefiting consumers. Despite a 7.4 percent increase in premiums here in the year to May, in comparative terms this is lower relative to an average EU increase of 12.1 percent and a 17.6 percent rise in the UK’s premium levels. This illustrates the effectiveness of Ireland's insurance reform policies as our reforms, in particular targeting personal injury claim costs, have clearly mitigated against the steep rise in insurance costs seen in other markets. The National Claims Insurance Database (NCID) report published earlier this week highlighted an increase in motor damage claims costs. These are largely influenced by a range of external factors including global inflation, and supply chain issues, along with labour market tightness.
The aforementioned Government's Action Plan for Insurance Reform has included significant achievements since 2020, most notably the rebalancing of the Duty of Care in July 2023, reforming the Injuries Resolution Board (formerly PIAB) and introducing the new Personal Injury Guidelines. These will benefit all insurance lines including, personal, commercial and liability cover. In addition, in part due to the more attractive operating environment here, new competitors such as Outsurance and Revolut have entered the motor insurance market, enhancing competition and capacity. In terms of business and commercial insurance, existing providers have indicated to me that they are expanding their risk appetite to underserved areas and I am receiving reports from various sectors of reductions in the rate being charged.
To conclude, it is crucial for the insurance industry to support these reforms by challenging frivolous claims, adhering to new award guidelines, and promoting the Injuries Resolution Board. While the inherently cyclical nature of insurance markets and international pressures have a significant impact, Ireland’s domestic reforms aim to make it a more competitive destination for international insurance capital.
Fiscal Policy
Ceisteanna (83, 91)
Matt Carthy
Ceist:83. Deputy Matt Carthy asked the Minister for Finance the basis upon which it was decided to divest from some but not other companies which derive profit from their activities in illegal Israeli settlements within the state of Palestine; and the amount of funds currently invested. [28527/24]
Amharc ar fhreagra
John Brady
Ceist:91. Deputy John Brady asked the Minister for Finance to provide an update on his Department’s consideration of the Illegal Israeli Settlement Divestment Bill 2023; and if he will make a statement on the matter. [28576/24]
Amharc ar fhreagraFreagraí scríofa
I propose to take Questions Nos. 83 and 91 together.
On the 20th of March 2024, the Director of the Ireland Strategic Investment Fund (ISIF) attended the Committee on Finance, Public Expenditure and Reform, and Taoiseach hearing on Pre-Committee Stage Scrutiny of the Illegal Israeli Settlements Divestment Bill 2023.
At that Committee meeting, the ISIF Director outlined that as at 31 December 2023 ISIF’s direct investments in companies on the UN database totalled approximately €4.2 million in 11 companies.
He also outlined that the ISIF’s indirect investments include 8 companies totalling approximately €9.4 million. ISIF has since taken an investment decision to divest from six of these companies with a total value of approximately €2.95m.
The six companies are:
Bank Hapoalim BM;
Bank Leumi-le Israel BM;
Israel Discount Bank Ltd;
Mizrahi Tefahot Bank Ltd;
First International Bank Ltd and;
Rami Levi Chain Stores Ltd.
NTMA has informed me that in divesting ISIF determined that the risk profile of the particular Occupied Palestinian Territories related investments were no longer within its investment parameters and that the commercial objectives of these investments can be achieved via other investments.
ISIF’s risk management approach is multi-faceted and considers a variety of factors that impact on investment risk and reward. Given commercial sensitivities in respect of its investments, ISIF has informed me that it does not comment on individual investment decisions.
ISIF will continue to monitor its holdings to ensure that investments are within the ISIF’s risk profile and investment parameters.
Turning to the Illegal Israeli Settlements Divestment Bill 2023 the Bill requires that NTMA/ISIF is not invested, directly or indirectly, in companies listed in a UN Human Rights Database of companies operating in the Illegal Israeli settlements in the Occupied Palestinian Territories produced by the Human Rights Council on 12 February 2020.
Following the expiry of the 9-month timed amendment to the Bill on 17 February last Pre-Committee Stage scrutiny has been conducted by the FINPERT committee.
I think we can all agree that Pre-Committee Stage Scrutiny has been valuable to informing our collective understanding of the policy and legal matters which the Bill raises. The Office of the Parliamentary Legal Advisor also made an invaluable contribution to that process which then helped to inform FINPERT’s report.
The Bill raises legal and policy questions regarding the use of the UN database and free movement of capital as well as wider practical implementation issues.
While FINPERT’s report supports the Bill, it recognises the challenges related to incorporating the UN Database in Irish statute and the importance of an appeal mechanism against divestment.
All of the work done during the period of the timed amendment and Pre-Committee Stage Scrutiny will help inform both mine and the Government’s position on the Bill going forward.
Finally, the Deputy will also be aware that the money message status of the Bill is currently under consideration.
Fiscal Policy
Ceisteanna (84, 202)
Darren O'Rourke
Ceist:84. Deputy Darren O'Rourke asked the Minister for Finance the impact the infrastructure, climate and nature fund will have on the general Government debt; if expenditure out of the climate and nature from 2026 onward will impact on the general Government balance; and if he will make a statement on the matter. [28631/24]
Amharc ar fhreagra
Rose Conway-Walsh
Ceist:202. Deputy Rose Conway-Walsh asked the Minister for Finance if the FIF/ICNF shows up in the GGD; and if he will make a statement on the matter. [28725/24]
Amharc ar fhreagraFreagraí scríofa
I propose to take Questions Nos. 84 and 202 together.
The purpose of the Infrastructure, Climate and Nature Fund (ICNF) is to, first, provide a fiscal buffer to support State expenditure during a period of significant deterioration in the economic or fiscal position of the State, and second, to provide support to projects that directly or indirectly contribute to climate change, nature, water quality and biodiversity objectives. Under the legislation, an initial €2 billion will be transferred to the Fund from the dissolved National Reserve Fund in 2024, and €2 billion will be transferred from the Exchequer to the Fund each year from 2025 to 2030, resulting in an overall contribution of €14 billion.
This fund constitutes an accumulation of financial assets for the State. The investment strategy of the Fund will be determined by the National Treasury Management Agency (NTMA).
The General Government Debt is a gross measure of consolidated government liabilities. The General Government Debt measures the gross level of borrowings for the general government sector. A transfer into the ICNF is simply counted as a transaction of a financial asset within General Government. When compiling the General Government Debt, transfers of financial assets within Government is not included in the calculation of the General Government Debt.
Transfers into the fund have no impact on the General Government Balance. However, if there is a drawdown from the ICNF for expenditure, this would be included in General Government expenditure and would have a negative impact on the General Government Balance.
Universal Social Charge
Ceisteanna (85)
Pearse Doherty
Ceist:85. Deputy Pearse Doherty asked the Minister for Finance if he will commit to supporting incomes by reductions in the rates and increases in the thresholds for USC; and if he will make a statement on the matter. [28560/24]
Amharc ar fhreagraFreagraí scríofa
The Programme for Government (PfG), “Our Shared Future” contains a number of specific commitments relating to income tax. These include the commitment that, “from Budget 2022 onwards, in the event that incomes are again rising as the economy recovers, credits and bands will be index linked to earnings. This will be done to prevent an increase in the real burden of income tax, to prevent more low income workers being taken into the tax net because of no changes to the tax system and to ensure there is no increase in the number of people having to pay higher income tax and USC rates.” It also includes a commitment to increase the Home Carer Tax Credit to support stay-at-home parents and those with caring responsibilities.
Significant progress has been made in achieving these commitments. Over the last three Budgets the Government increased the Standard Rate Cut-Off Point for single persons by 19 per cent from €35,300 to €42,000, with commensurate increases for persons who are married/in civil partnerships. The main tax credits - personal tax credit, employee tax credit and earned income credit - were increased by around 13.6 per cent, or €225 each, from €1,650 to €1,875. Over the last two Budgets, the Home Carer Tax Credit was also increased by 12.5 per cent, or €200, from €1,600 to €1,800.
In regard to the Universal Social Charge or USC, in Budget 2024, the ceiling of the band for the 2 per cent rate was increased by €2,840 from €22,920 to €25,760 in line with the increase to the National Minimum Wage. This continued the Government’s policy of ensuring full-time workers on the minimum wage will remain outside the charge to the top rates of USC. Accordingly, the ceiling of the 2 per cent USC rate band has increased cumulatively by 24.5 per cent, from €20,687 to €25,760, over the last three Budgets.
In addition, the 4.5 rate of USC was reduced to 4.0 per cent, representing the first reduction in USC rates since 2019.
As the Deputy will be aware the Government will set out the parameters for Budget 2025, including the size of any tax package, in the upcoming Summer Economic Statement. As the Deputy will appreciate, 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
Ceisteanna (86)
Richard Boyd Barrett
Ceist:86. Deputy Richard Boyd Barrett asked the Minister for Finance if he will introduce a digital tax on the profits of social media companies to fund the replacement of the current TV licence fee and provide the funding necessary to safeguard the future of public service broadcasting; and if he will make a statement on the matter. [28563/24]
Amharc ar fhreagraFreagraí scríofa
As has been stated on numerous occasions, this Government is committed to the reform of the TV licence. A long-term funding is model is needed, to deliver effective reform and ensure that a secure, sustainable funding model is put in place for our public service media.
Government is committed to the introduction of a new sustainable and fair funding model during its term of office. Following consideration of the report of the Future of Media Commission in 2022, Government decided not to accept its recommendation to replace the TV licence model with direct Exchequer funding of Public Service Media. Instead, Government decided to reform and enhance the existing funding model, thereby maintaining the link between public service content providers and the public, retaining and building on the existing annual revenue, and guaranteeing the continued independence of the broadcasting sector
The events regarding RTÉ last year paused a decision on the future direction of media funding. Since then, two independent reviews into RTÉ have been completed, carried out by Expert Advisory Committees appointed by Government, and the reports have recently been published. As Minister Martin has stated, discussions on the matter are continuing and a final decision on this matter will be made prior to the Dáil summer recess.
It would not be appropriate for me to comment further until the Government has completed its consideration of the matter.
Regarding a digital tax on the profits of social media companies, the Deputy will be aware that in 2018 the European Commission proposed a digital services tax based on a €750 million global revenue threshold and an EU-wide €50 million revenue from in-scope services threshold. This proposal was received negatively. Subsequently, negotiations by the OECD and the G20 on reforms to the international system of taxation led to the OECD Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy in October 2021.
I note that Pillar One of the OECD Agreement provides for the standstill and removal of unilateral measures such as digital services taxes. It is important that any proposal for additional taxation avoids raising trade tensions and does not undermine the ongoing development and implementation of the OECD agreement. I believe that a global approach is preferable to unilateral measures like a targeted tax on social media companies.
Tax Credits
Ceisteanna (87)
Robert Troy
Ceist:87. Deputy Robert Troy asked the Minister for Finance if he will address the situation whereby if a person has over paid tax or failed to claim a credit, they can only claim back up to a maximum of four years, but there is no time limit for how far back the Revenue Commissioners can seek reimbursement if tax is owed to it; if he will ensure parity of treatment in relation to this; and if he will make a statement on the matter. [28638/24]
Amharc ar fhreagraFreagraí scríofa
Section 865 of the Taxes Consolidation Act 1997 (TCA) provides a general right to repayment of tax where a person has paid tax which is not due. Section 865(4) TCA provides that the right to repayment is subject to making a claim within a statutory limit of four years after the end of the chargeable period to which the claim relates. That limit is binding on Revenue as well as on taxpayers. Determinations of the Tax Appeals Commission in differing appellant circumstances confirm there is no discretion in the application of the four-year rule for claiming repayments.
In 2003, when section 865 TCA was introduced, Revenue’s general right to make or amend assessments was also reduced to four years. Previously, the general time limit on the making or amending of assessments by Revenue had been between six and ten years. The provision of a general four-year time limit for Revenue making or amending assessments and for taxpayers to claim a repayment of tax creates parity between Revenue and taxpayers.
With that said, in certain limited circumstances, Revenue’s right to make or amend an assessment is not time limited. These circumstances include where fraud or neglect is suspected or in the context of the application of general anti-avoidance rules.
When the four-year time limits were introduced in 2003, the then Minister for Finance stated he was satisfied that they achieved the necessary balance between establishing a fair and uniform system for taxpayers while providing necessary protection for the Exchequer. I am satisfied that continues to be the position.
Fiscal Policy
Ceisteanna (88)
Rose Conway-Walsh
Ceist:88. Deputy Rose Conway-Walsh asked the Minister for Finance if the Future Ireland Fund will be sufficient to make public finances sustainable beyond 2041; if so, the number of years; and if he will make a statement on the matter. [28647/24]
Amharc ar fhreagraFreagraí scríofa
The purpose of the Future Ireland Fund (the Fund) will be to support, expenditure by the State in a consistent and sustainable manner from 2041 onwards.
The policy and practical challenges on the horizon are also significant and the Fund will not in itself replace the need for other policy measures. However, the establishment of the Fund represents a responsible approach to the use of “windfall” tax receipts in the immediate term.
This in turn can help support sustainable public finances in the future by financing part of the future costs of structural change, particularly the costs associated with an ageing population, and the climate and digital transitions.
In terms of the amounts available, from 2041, in the ordinary course of events, the Act allows for up to 3% of the value of the Fund to be transferred to the Exchequer each year from 2041, so long as this withdrawal does not impact the value of the Fund Capital. The rationale for this limit is to protect the capital of the fund to ensure the benefits can be spread across a number of generations through the return from the Fund.
As the Minister for Finance advised the Committee on Finance, Public Expenditure and Reform and Taoiseach (FINPERT) in May, it is estimated that the average fund value could be over €100 billion by the time of drawdown.
On that basis the potential drawdown that may be available from the Fund to support the Exchequer from 2041 would be in the region of €3 billion. This is a significant amount available to the Exchequer.
The resources will be transferred from the fund to the Exchequer from 2041 onwards and it will be a matter for the Government of the day to determine how the resources are used, thus maintaining democratic control over the use of these funds.
Tax Code
Ceisteanna (89)
Catherine Connolly
Ceist:89. Deputy Catherine Connolly asked the Minister for Finance further to Parliamentary Question No. 118 of 21 May 2024, his plans for the phasing out of the help-to-buy scheme; and if he will make a statement on the matter. [28387/24]
Amharc ar fhreagraFreagraí scríofa
The Help to Buy Scheme was introduced in 2017 with the purpose of assisting first-time buyers with the deposit required to purchase or self-build a new house or apartment to live in as their home. The relief is only available in respect of new builds, with a view to increasing the supply of new housing and stimulating demand.
The scheme has been a significant support for first time buyers of new homes. The most recent data available up to 1 June 2024, some 47,356 first-time buyers either singly or as part of a couple, have benefited from the scheme.
The Deputy had previously raised concerns that the scheme may exacerbate housing prices, and, as has previously been stated, policy makers were aware at the time that the scheme was being developed that it was not without risk. Likewise, they were aware that there was a danger that, against a background of constrained supply, the initiative could serve to increase prices for new homes, thus potentially undermining to some extent the affordability aspiration of the scheme. However, on all occasions when the matter was formally examined to date, concerns in this regard were not borne out by the review data.
Studies carried out by Indecon Economic consultants found that the main driver of house prices was the mismatch between supply and demand rather than the existence of the scheme. Similarly, the review by Mazars in 2022, found that there is no definitive evidence that Help to Buy pushed up the price of new houses. In fact, Mazars found that the prices paid for new homes by people who received the Help to Buy relief were slightly lower than new house prices in the economy in general, likely because of the €500,000 price eligibility cap.
There have been some significant changes in the market even since the Mazars report on the scheme was published. The change in interest rates in the intervening period means that further stability and certainty is needed for first time buyers who may now face higher mortgage interest rates. The decision was made that now is not the time for the withdrawal of supports for those purchasers. The extension of the Help to Buy for a further year to 31 December 2025 takes account of the need for certainty in the market pending the increase in new housing supply envisaged by the Government’s Housing for All strategy.
Tax Data
Ceisteanna (90, 104)
Aindrias Moynihan
Ceist:90. Deputy Aindrias Moynihan asked the Minister for Finance for an update on Exchequer returns to date in 2024; and if he will make a statement on the matter. [28624/24]
Amharc ar fhreagraAindrias Moynihan
Ceist:104. Deputy Aindrias Moynihan asked the Minister for Finance if he will report on income tax revenues to date in 2024; and if he will make a statement on the matter. [28623/24]
Amharc ar fhreagraFreagraí scríofa
I propose to take Questions Nos. 90 and 104 together.
The latest Exchequer returns show a largely positive picture of the public finances. Overall tax revenues at the end of June amounted to a total of €44.7 billion, that is ahead of last year by 9.3 per cent, and 3.4 per cent ahead of my Department's published profile.
The ongoing resilience of our economy is reflected in income tax and VAT receipts: income tax receipts stand at €16.7 billion at the end of June, above last year by €1.2 billion or 7.5 per cent, while VAT receipts were €11.0 billion, €0.6 billion or 6.2 per cent ahead of the same period last year.
However, the stand-out feature of the June returns was of course the sharp increase in corporation tax, which is now ahead of the same point last year by €1.6 billion or 15.4 per cent. €12.1 billion in corporation tax receipts were collected to the end of June.
Government has warned on numerous occasions about the dangers of “windfall” corporation tax receipts. These receipts are subject to exceptional potential volatility and must not be depended upon to fund permanent spending commitments.
Our approach to budgetary policy has been built upon the assumption that these receipts could prove transient. We have taken steps to address this risk through the establishment of two new long-term funds, the Future Ireland Fund and the Infrastructure, Climate and Nature Fund. These funds will enable us to invest these receipts to prepare for future fiscal challenges and, at the same time, ensure that windfall taxes do not become part of the permanent expenditure base.
Ultimately, the best way to ensure the sustainability and positive trajectory of the public finances over the medium-term horizon is by continuing to pursue a balanced and sensible budgetary policy.
Government will set out the budgetary strategy for Budget 2025 in the upcoming Summer Economic Statement, which will be published in the coming weeks.
Question No. 91 answered with Question No. 83.
Tax Reliefs
Ceisteanna (92)
Thomas Gould
Ceist:92. Deputy Thomas Gould asked the Minister for Finance the number of people who have been approved for the mortgage interest relief and the number eligible. [28580/24]
Amharc ar fhreagraFreagraí scríofa
Mortgage Interest Tax Relief is a one-year temporary relief, which is available to taxpayers in respect of their principal private residence in the State where the outstanding mortgage balance was between €80,000 and €500,000 as of 31 December 2022. The relief also extends to a qualifying property located in the State, which is the sole or main residence of the individual’s former or separated spouse or civil partner or a dependent relative.
The tax relief is at the standard rate of income tax and is based on the increase in interest paid in 2023 over interest paid in 2022. The value of the relief will be equal to the lesser of 20 per cent of this excess interest figure, or €1,250. This means that the maximum tax relief will be €1,250 per property.
Where the interest payments made in respect of either the 2022 or 2023 tax years are not for a full year, pro-rating of the relief will apply, to ensure interest is applied on a period of equivalence basis and that the cap is adjusted accordingly. Revenue’s systems will carry out the calculation of the relief at the point of claim.
In order to avail of the relief, the taxpayer must file a 2023 Income Tax Return and upload certificates of mortgage interest for both 2022 and 2023, together with confirmation of their mortgage balance as of 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.
In advance of Budget 2024, it was estimated that approximately 208,000 eligible accounts, predominantly tracker and variable mortgages, or c. 165,000 properties may be eligible for the relief.
I am advised by Revenue that as of 13 June 2024, 22,559 PAYE taxpayer units made a claim for this credit on their 2023 PAYE income tax return, and 20,248 claimants received a refund of tax, which may also include a refund in respect of other credits and reliefs, such as health expenses. Of these, 253 claimants received a partial refund as the tax paid was less than that claimed. A further 2,040 claimants are either in a balanced position or had an underpayment of tax reduced. An additional 271 claimants are not in a position to benefit as they did not pay any Income Tax in 2023.
Information is not yet available for self-assessed taxpayers as these taxpayers have until 31 October 2024 to submit their 2023 Income Tax Return.
Tax Code
Ceisteanna (93)
Pearse Doherty
Ceist:93. Deputy Pearse Doherty asked the Minister for Finance if he will amend the BIK exemption for employer contributions to PRSAs in light of concerns that it has facilitated aggressive tax planning; and if he will make a statement on the matter. [28566/24]
Amharc ar fhreagraFreagraí scríofa
Finance Act 2022 removed the difference in treatment of PRSAs and occupational pension schemes for funding purposes, by abolishing the BIK charge on employer contributions to an employee’s PRSA, and not counting employer contributions to an employee’s PRSA towards that employee’s age related and salary percentage limits on tax deductible contributions. Prior to the amendment, the contributions were relieved from tax where the combined contributions by an employer and an employee to a PRSA did not exceed the employee’s annual percentage limit (between 15% and 40% of “net relevant earnings”, varying depending on age, up to a maximum relieved salary of €115,000). However, where the combined contributions exceeded the applicable threshold, the amount above the threshold was treated as a taxable benefit in kind (BIK) in the hands of the employee.
The change in approach for PRSAs was recommended by the Interdepartmental Pension Reform and Taxation Group (IDPRTG) with a view to improving and simplifying the pension landscape in Ireland.
In relation to tax planning, I am informed by Revenue that there is a continuous focus on compliance across pensions, identifying and confronting non-compliant behaviour across schemes. This is in line with the commitment in Revenue’s Corporate Priorities 2024 to comprehensively use the full suite of interventions set out in its Compliance Intervention Framework to assist voluntary compliance and to provide an appropriate response to non-compliance.
As with the introduction of any new provision, Revenue monitors trends and conducts analysis based on actual data to ensure the measure is operating as intended. Revenue engages with my Department in supporting the development of tax policy and associated legislation and, where appropriate, will draw my Department’s attention to matters arising in the operation of the tax system.
The first year where the new rules came into effect was 2023. Revenue’s analysis of data relating to employer PRSA contributions in 2023 has highlighted certain practices which require further examination and it is carrying out an additional review of these cases.
Revenue have recently submitted a paper to my Department outlining findings and concerns regarding how the provisions are operating, which my officials are currently considering. Revenue continues to review data and compliance in this area and will continue to liaise with my Department in that regard.
Tax Reliefs
Ceisteanna (94)
Richard Boyd Barrett
Ceist:94. Deputy Richard Boyd Barrett asked the Minister for Finance his views on whether it is acceptable that film producer companies in receipt of section 481 film tax credit are claiming the credit on the grounds that they are providing quality employment and training, while claiming simultaneously and on an on-going basis that the same producer company is not the employer of the film crew on the film productions for which the credit is claimed whenever workers on those productions attempt to assert their employment rights, particularly their rights under fixed term workers legislation; and if he will make a statement on the matter. [28562/24]
Amharc ar fhreagraFreagraí scríofa
The Deputy will be aware that there are specific provisions within the film tax credit to reinforce the requirement to adhere to employment rights legislation. As part of the cultural certification process, an applicant company is required to submit an undertaking of compliance with all relevant employment legislation in relation to the film being certified. These conditions are to be met not just by the producer company but also by the designated activity company for each production.
Should any concerns in relation to employment rights arise, the Workplace Relations Commission (WRC) and the Labour Court are the organs of the State tasked with the resolution of specific workplace disputes. It is therefore appropriate that any relevant claims should be referred to these bodies for adjudication.
I am aware that a number of cases have been adjudicated by the WRC and subsequently appealed to the Labour Court. As a number of these cases are still active, it is not appropriate for me to make any further comment at this time. However, I can confirm that any findings of the WRC and Labour Court in relation to the sector are monitored by my Department and considered in the context of policy reviews of the section 481 tax credit.
National Treasury Management Agency
Ceisteanna (95)
Catherine Connolly
Ceist:95. Deputy Catherine Connolly asked the Minister for Finance further to Parliamentary Question No. 64 of 21 May 2024, the timeline for the NTMA to fully divest from all ISIF global portfolio investments in companies on the UN Human Rights Council database of business enterprises; the details of the risk analysis which led to the NTMA’s recent divestment from six such companies; and if he will make a statement on the matter. [28386/24]
Amharc ar fhreagraFreagraí scríofa
The Ireland Strategic Investment Fund (ISIF) constructs its portfolio within the legislative framework set for it by the Oireachtas and will align it with any changes it makes. The Private Members Illegal Israeli Settlements Divestment Bill 2023 is currently making its way through the legislative process.
ISIF as part of the NTMA is engaged on an ongoing basis with the Department in support of the Department's inputs to that process.
For example, on the 20th of March 2024, the Director of the Ireland Strategic Investment Fund (ISIF) attended the Committee on Finance, Public Expenditure and Reform, and Taoiseach meeting on Pre-Committee Stage Scrutiny of the Illegal Israeli Settlements Divestment Bill 2023.
At that Committee meeting, the ISIF Director outlined that as at 31 December 2023 the ISIF’s direct investments in companies on the UN database totalled approximately €4.2 million in 11 companies. He also outlined that the ISIF’s indirect investments include 8 companies totalling approximately €9.4 million.
ISIF has since taken an investment decision to divest from six of these companies with a total value of approximately €2.95m. The six companies are Bank Hapoalim BM; Bank Leumi-le Israel BM; Israel Discount Bank Ltd; Mizrahi Tefahot Bank Ltd; First International Bank Ltd and Rami Levi Chain Stores Ltd.
ISIF has determined that the risk profile of these investments is no longer within its investment parameters and that the commercial objectives of these investments can be achieved via other investments.
I have been informed by ISIF that its risk management approach is multi-faceted and considers a variety of factors that impact on investment risk and reward. Given commercial sensitivities in respect of its investments, ISIF does not comment on individual investment decisions.
ISIF will continue to monitor its holdings to ensure that investments are within the ISIF’s risk profile and investment parameters.
Insurance Industry
Ceisteanna (96)
Ruairí Ó Murchú
Ceist:96. 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; and if he will make a statement on the matter. [28015/24]
Amharc ar fhreagraFreagraí scríofa
The Government remains committed to addressing the issue of high cost of insurance, including for public liability cover, through the efforts of the Office for the Promotion of Competition in the Insurance Market, a key element of the Action Plan for Insurance Reform. Established as a Programme for Government commitment and overseen by the Minister of State at the Department of Finance, the Office aims to expand the risk appetite of existing insurers and attract new market entrants. By maintaining regular contact with sectors facing insurance difficulties, the Office plays a pivotal role in helping to encourage the availability of insurance cover including for various high-risk activities, including equestrian activities, inflatable hire, and ice-skating.
Through leveraging the Government's insurance reform agenda, the Office has successfully helped facilitate the availability of insurance in previously challenging areas, in turn contributing to a more competitive market. This collaborative approach involves connecting groups facing insurance challenges with relevant stakeholders and separately engaging with IDA Ireland to help attract new insurers to the Irish market. Most recently we have seen OUTsurance commence operations here. In terms of business and commercial insurance, existing providers have indicated that they are expanding their risk appetite to underserved areas and various sectors are reporting reductions in the rate being charged for liability cover.
The broader Action Plan for Insurance Reform, a critical government initiative, is progressing well. Overseen by a Cabinet Committee Sub-Group on Insurance Reform, chaired by the Tánaiste, the plan has seen significant progress, with most actions either delivered or initiated. This coordinated whole-of-Government approach aims to improve the domestic operating environment for insurers, despite the EU level Solvency II framework, which prevents Government from compelling insurers to provide coverage or dictating pricing.
Significant achievements under the Action Plan include amendments to the Occupier’s Liability Act 1995, reform of the Injuries Resolution Board, and the introduction of new Personal Injuries Guidelines, which have reduced award levels by an average of 35% when compared to 2020. Additionally, the establishment of the Insurance Fraud Coordination Office and the introduction of the Criminal Justice (Perjury and Related Offences) Act 2021 are pivotal steps in combating insurance fraud and ensuring a fairer claims environment.
The Government recognizes the importance of the insurance industry in supporting these reforms by challenging frivolous claims, adhering to new award guidelines, and promoting the Injuries Resolution Board. It is essential to understand the cyclical nature of insurance and the impact of international pressures on the market here. Accordingly, Ireland's reforms are designed to create a more competitive environment, attracting international capital despite limited influence over global trends.
In conclusion, the Government remains steadfast in its commitment to achieving a competitive and sustainable insurance market, ensuring the availability and affordability of insurance for all sectors. The ongoing implementation of the Action Plan for Insurance Reform, along with the work of the Office for the Promotion of Competition in the Insurance Market, continues to deliver on the Government's reform agenda, making Ireland a more attractive destination for insurers and ultimately benefiting consumers.
Tax Credits
Ceisteanna (97, 103, 105, 115)
Barry Cowen
Ceist:97. Deputy Barry Cowen asked the Minister for Finance the number of eligible claims currently being made for the rent tax credit made in counties Offaly, Laois, Westmeath, Longford, Meath and Louth and Kildare, respectively; and if he will make a statement on the matter. [28427/24]
Amharc ar fhreagra
Jennifer Murnane O'Connor
Ceist:103. Deputy Jennifer Murnane O'Connor asked the Minister for Finance the number of eligible claims currently being made for the rent tax credit made in counties Carlow, Kilkenny, Wexford and Waterford, respectively; and if he will make a statement on the matter. [28423/24]
Amharc ar fhreagra
Willie O'Dea
Ceist:105. Deputy Willie O'Dea asked the Minister for Finance the number of eligible claims currently being made for the rent tax credit made in counties Limerick, Clare, Tipperary, Cork and Kerry, respectively; and if he will make a statement on the matter. [28429/24]
Amharc ar fhreagra
Seán Haughey
Ceist:115. Deputy Seán Haughey asked the Minister for Finance the number of eligible claims currently being made for the rent tax credit in Dublin; and if he will make a statement on the matter. [28425/24]
Amharc ar fhreagraFreagraí scríofa
I propose to take Questions Nos. 97, 103, 105 and 115 together.
The Rent Tax Credit (RTC), 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.
For the tax years 2022 and 2023, the maximum value of the credit is €1,000 per year in the case of a jointly assessed couple, and €500 in all other cases. Finance Act 2023 increased the value of the credit for the 2024 and 2025 tax years to a maximum of €1,500 for a jointly assessed couple and €750 in all other cases.
I am advised by Revenue that the Rent Tax Credit statistics currently available refer only to PAYE taxpayers. Data on self-assessed taxpayers are not yet available. These data will be available, in respect of the 2022 year of assessment, later in 2024 when the self-assessed tax returns for that year, filed in late 2023, are fully analysed.
Rent Tax Credit claimants 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.
Claims in respect of the 2022 and 2023 years of assessment can be made by PAYE taxpayers by submitting an Income Tax return for that year. For claims relating to 2024, PAYE taxpayers have the option of claiming the Rent Tax Credit due to them either as rent is incurred or at the end of the year through their Income Tax return.
The below table outlines the number of claimants by year of assessment and by county for 2022, 2023 and 2024. The 2024 figures are as at 25 June 2024. I am further advised by Revenue that the data are provisional and subject to change.
|
County |
2022 Year of Assessment |
2023 Year of Assessment |
2024 Year of Assessment |
|
Carlow |
2,553 |
2,295 |
471 |
|
Cavan |
2,356 |
2,327 |
466 |
|
Clare |
3,528 |
3,276 |
770 |
|
Cork |
31,128 |
27,919 |
6,468 |
|
Donegal |
3,490 |
3,219 |
753 |
|
Dublin |
129,437 |
122,371 |
29,217 |
|
Galway |
19,629 |
16,818 |
4,135 |
|
Kerry |
4,294 |
3,915 |
761 |
|
Kildare |
10,022 |
9,397 |
2,171 |
|
Kilkenny |
2,971 |
2,849 |
620 |
|
Laois |
2,210 |
1,994 |
493 |
|
Leitrim |
887 |
790 |
186 |
|
Limerick |
13,419 |
11,499 |
2,658 |
|
Longford |
1,637 |
1,566 |
306 |
|
Louth |
3,864 |
3,703 |
811 |
|
Mayo |
4,025 |
3,753 |
871 |
|
Meath |
5,320 |
5,340 |
1,095 |
|
Monaghan |
2,012 |
1,935 |
398 |
|
Offaly |
2,328 |
2,209 |
492 |
|
Roscommon |
1,790 |
1,714 |
396 |
|
Sligo |
3,202 |
2,757 |
627 |
|
Tipperary |
4,972 |
4,684 |
960 |
|
Waterford |
5,348 |
4,916 |
1,151 |
|
Westmeath |
4,041 |
3,808 |
881 |
|
Wexford |
4,418 |
4,056 |
894 |
|
Wicklow |
3,401 |
3,265 |
771 |
|
Not Currently Available |
3,966 |
2,827 |
601 |
|
Total |
276,248 |
255,202 |
59,423 |
Tax Credits
Ceisteanna (98)
Richard Boyd Barrett
Ceist:98. Deputy Richard Boyd Barrett asked the Minister for Finance if intends to make any changes to the section 481 film tax credit in the forthcoming budget in light of the recommendations of the Budgetary Oversight Committee report on Section 481, particularly in relation to addressing employment rights, lack of employment security and recognition of service for film crew and the use of buy-out contracts for actors, performers, writers and directors; and if he will make a statement on the matter. [28561/24]
Amharc ar fhreagraFreagraí scríofa
I am aware of the review published by the Oireachtas Committee on Budgetary Oversight following its examination of the section 481 film tax credit, and of the recommendations made therein. I am also aware of the progress made on a number of the recommendations, such as the convening of a stakeholder forum and the increase in the cap on eligible expenditure to €125 million.
In relation to employment rights, the Deputy will be aware that changes were previously made to the film tax credit to reinforce the requirement to adhere to employment rights legislation. Indeed, as part of the cultural certification process, an applicant company is required to submit an undertaking of compliance with all relevant employment legislation in relation to the film being certified. These conditions are to be met not just by the producer company but also by the designated activity company for each production.
Should any concerns in relation to employment rights arise, the Workplace Relations Commission (WRC) and the Labour Court are the organs of the State tasked with the resolution of specific workplace disputes. It is therefore appropriate that any relevant claims should be referred to these bodies for adjudication.
In relation to the intellectual property rights, I would note that copyright law falls within the remit of the Department of the Enterprise, Trade and Employment (DETE). Notwithstanding this, my officials have engaged at length with the stakeholders concerned, including representative bodies for actors and performers, to gain an understanding of relevant issues.
Copyright is relevant for many workers in the film sector, including actors, authors, producers and broadcasters, and Screen Ireland has previously engaged an independent facilitator to meet with key stakeholders to understand the various perspectives of those concerned. It is my understanding that this process has resulted in the drafting of relevant guidelines and that a further stakeholder meeting is expected to take place in the coming weeks.
Finally, it is worth noting that copyright legislation applies regardless of whether it is referenced as part of the application process for section 481 or not. If there are issues with copyright law as it currently applies, such issues are a matter for the Department of Enterprise, Trade and Employment.
Tax Code
Ceisteanna (99)
Ruairí Ó Murchú
Ceist:99. Deputy Ruairí Ó Murchú asked the Minister for Finance if he will provide an update on the work being carried out in his Department to fix the anomaly where many workers who live in Northern Ireland and who work in the South are precluded from working from home due to the significant Revenue implications for their employers; if he will detail any contacts his Department has had on the matter with the equivalent British department in the past six months; and if he will make a statement on the matter. [28014/24]
Amharc ar fhreagraFreagraí scríofa
The tax treatment associated with cross-border working has been subject to ongoing discussions in recent years, particularly given the increase in remote working as a result of the Covid-19 pandemic. However, cross-border working gives rise to complex issues involving shared taxing rights between different jurisdictions.
It should be noted that workers who reside in Northern Ireland and work in the State are not precluded from working from home. The availability of remote working is primarily a matter between the employer and the employee. An employer may allow an employee to work remotely in Northern Ireland, however, such arrangements may result in implications for the employer from a UK tax perspective. As such, any potential implications that may arise from such arrangements are outside the scope of my direct remit and that of my Department.
As cross-border working and the availability of remote working options have potential tax implications not only on an island of Ireland basis, but also internationally, it is important that the wide range of policy considerations that arise are fully understood and considered. The best place for this is at an OECD level, to work through the various issues thoroughly and to minimise the potential for unintended consequences. The OECD has commenced its work on global mobility and my officials will continue to engage on this matter.
More generally, my Department is continuing to engage on this matter as follows:
1. Obtain Better Data
There was a general acceptance that data in relation to the nature and extent of cross-border working could be improved. In this regard, my Department commissioned the ESRI to undertake a research project in this area. The ESRI recently published a paper entitled ‘A Study of Cross-Border Working on the Island of Ireland’. This paper estimates the number of cross-border workers, as well as providing an overview of the profile and characteristics of cross-border workers.
2. Minimise Administrative Burden
Revenue has looked at ways to minimise and simplify the administrative burden insofar as possible. Revenue has published guidance in this regard which will be of assistance to employers and employees.
3. International Discussions
My Department is actively engaging in any international discussions on the policy implications of cross-border working. My Department will also engage bilaterally with other jurisdictions as appropriate to the circumstances. To answer the Deputy's specific question, my Department has not had direct engagement with HM Treasury on this matter in the last six months.
Fiscal Policy
Ceisteanna (100)
Bernard Durkan
Ceist:100. Deputy Bernard J. Durkan asked the Minister for Finance to outline his Department’s mission statement with particular reference to his intention and proposals to address the important issues now arising and likely to present a challenge in the future to family households and the productive/caring sectors as required and necessary; and if he will make a statement on the matter. [28582/24]
Amharc ar fhreagraFreagraí scríofa
My Department’s mission is to lead in the achievement of the Government’s economic, fiscal and financial policy goals, having regard to the goals set out in the Programme for Government – Our Shared Future. In pursuing this mission, for the period 2023-2025 my Department is working towards achieving the following Strategic Goals:
- Balanced, sustainable economic growth
- Sound Public Finances
- Well regulated, sustainable banking and financial sector
- International leadership in economic, fiscal and financial decision making, and
- Promoting environmentally sustainable economic progress.
It is important that Government continues to pursue a balanced and sustainable budgetary policy. In recent years, Ireland has experienced a series of economic shocks, including a two-year pandemic and a war in Europe triggering the most severe energy price shock in decades. While the Irish economy had weathered the pandemic well, fiscal and economic attention through 2023 and 2024 has focussed on the inflationary situation, its impact and the consequent cost of living crisis.
By responding swiftly and decisively to the cost of living challenges, government supports have helped to mitigate the impact of inflationary pressures on both households and businesses. Budget 2023 was a ‘Cost of Living Budget’ focused on mitigating inflationary pressures. Budget 2024 provided €2.7 billion in once-off cost of living measures for 2024, which built upon some €12 billion in direct relief made available to households and businesses since the beginning of 2022.
Budget 2024 included a personal income tax package amounting to €1.3 billion in 2024 and €1.5 billion in a full year and was built around 3 key pillars: changes to tax credits, the standard rate band and Universal Social Charge (USC). The tax package was designed in a manner, which allowed the Government to use these levers to distribute the benefit of the package as effectively as possible. For the third year in a row, the main tax credits and the Standard Rate Cut-Off Point were increased. In addition, the package also focused on tackling child poverty by providing a suite of tax enhancements to assist families with children. For example, the Home Carer Tax Credit, Single Person Child Carer Credit and the Incapacitated Child Tax Credit were also increased by around 6.0 per cent.
Furthermore, the 4.5 per cent rate of USC was reduced to 4.0 per cent and the ceiling of the band for the 2 per cent rate of USC was increased to €25,760 (from €22,920) in line with the increase in the National Minimum Wage.
Government will set out the parameters for Budget 2025, including the size of any tax package, in the upcoming Summer Economic Statement. My officials are working closely with officials from the Department of Public Expenditure, National Development Plan Delivery & Reform on the drafting of the Statement.
As the Deputy will appreciate, it is a longstanding tradition not to comment in advance of the Budget on any matters that might be the subject of Budget decisions.