Written Answers Nos. 134-151
Dáil Éireann Debate
134. Deputy Michael McGrath asked the Minister for Finance if he intends to revise corporate governance oversight process in respect of National Asset Management Agency in view of its increased portfolio of assets and the revised promissory note arrangements; and if he will make a statement on the matter. [7902/13]
Minister for Finance (Deputy Michael Noonan): There is a robust corporate governance oversight process in place in respect of the National Assets Management Agency. The Agency’s corporate governance oversight process is derived from the NAMA Act 2009, which includes provision for codes of practice and public accountability. The NAMA Board has also adopted the Code of Practice for the Governance of State Bodies.
135. Deputy Michael McGrath asked the Minister for Finance the expected costs under the deposit guarantee scheme of the liquidation of the Irish Bank Resolution Corporation; and if he will make a statement on the matter. [7903/13]
Minister for Finance (Deputy Michael Noonan): It is understood that the total deposits held by IBRC was €323 million at 31 January 2013. The Special Liquidator submitted preliminary DGS information to the Central Bank on 12 February which estimates eligible deposits of €123 million. If the threshold for DGS qualification is mechanically applied (i.e. €100,000 per person), the payment in respect of DGS-covered deposits would be just over €30 million. The total DGS pay-out is likely to be significantly lower than this figure, however, after the Special Liquidator excludes accounts such as:-
136. Deputy Michael McGrath asked the Minister for Finance the initial floating interest rate coupon on each tranche of Government bonds issued under the revised promissory note arrangements; and if he will make a statement on the matter. [7904/13]
Minister for Finance (Deputy Michael Noonan): As the Deputy will be aware the Irish Government Bonds that have been issued in exchange for the Promissory Notes are floating rate bonds. The coupon on these bonds is 6-month Euribor plus a margin ranging from 2.50% to 2.68%. On the 8th February 2013 the NTMA announced that following the agreement between the Government and the ECB, it had, at the direction of the Minister for Finance, completed the exchange with the Central Bank of Ireland of Irish Government Bonds for the Promissory Notes previously held by IBRC. As a result, the Minister for Finance’s liability under the Promissory Notes has been discharged and the Promissory Notes cancelled.
137. Deputy Michael McGrath asked the Minister for Finance the impact of a 1% rise in the Irish spread over six month EURIBOR on the projected savings under the revised promissory note arrangements; and if he will make a statement on the matter. [7905/13]
Minister for Finance (Deputy Michael Noonan): I can advise the Deputy that eight new Floating Rate Treasury Bonds have been issued to discharge the IBRC Promissory Notes liability consisting of:-
138. Deputy Michael McGrath asked the Minister for Finance the circumstances under which the Central Bank of Ireland will be permitted to exchange a portion of the new floating rate bonds issued under the revised promissory note arrangement for fixed coupon bonds; and if he will make a statement on the matter. [7906/13]
Minister for Finance (Deputy Michael Noonan): The Central Bank will sell these bonds but only when such a sale is not disruptive to financial stability. The limits of the option to exchange will be the amounts of the mandatory sales and the option lies with the Central Bank as a right but not an obligation. The Central Bank have undertaken that minimum of bonds will be sold in accordance with the following schedule:-
139. Deputy Michael McGrath asked the Minister for Finance the implications he expects arising from the liquidation of the Irish Bank Resolution Corporation on outstanding legal actions against the institution; and if he will make a statement on the matter. [7907/13]
Minister for Finance (Deputy Michael Noonan): The effect of the IBRC Act was to place an immediate stay on claims against IBRC, including counter claims which do not give rise to a right of set off. New proceedings against IBRC can only be commenced with the leave of the Court. On the seventh of March the High Court is to consider submissions in respect of this issue and rule on whether the Court has a discretion to lift the stays placed on ongoing actions by operation of the Act. Litigants who succeed in actions against IBRC will rank as unsecured creditors in the liquidation. If a claimant is also a debtor of IBRC, and that debt is sold to NAMA or a third party buyer, such buyer will acquire that debt subject to that claimant’s pre-existing valid and enforceable claims and counterclaims that give rise to an enforceable right of set-off against the debt.
140. Deputy Michael McGrath asked the Minister for Finance the implications for loans outstanding to former directors of Anglo Irish Bank and Irish Nationwide arising from the liquidation of Irish Bank Resolution Corporation; and if he will make a statement on the matter. [7908/13]
Minister for Finance (Deputy Michael Noonan): As the Deputy will be aware of all debts owing to IBRC, including loans outstanding to former Directors, still remain due and payable in accordance with their terms. This includes loans that were advanced to former directors of Anglo Irish Bank and Irish Nationwide. All loan payments should continue to be made and all debts to IBRC remain due and payable in accordance with their terms. One of the objectives of the Special Liquidators will be to ensure the continued collection of all outstanding debts.
141. Deputy Michael McGrath asked the Minister for Finance his estimate of the amounts owed by the Irish Bank Resolution Corporation to unsecured creditors at the time of liquidation; if the IBRC loan books are sold at face value if the liquidator will be in a position to pay all unsecured creditors in full; his views on the situation in which losses were imposed by a State owned business on Irish suppliers of goods and services while no losses are taken by senior bondholders at that institution; and if he will make a statement on the matter. [7909/13]
Minister for Finance (Deputy Michael Noonan): As the Deputy will be aware, on 7th February 2013 the Oireachtas passed legislation (Irish Bank Resolution Corporation Act 2013), appointing joint Special Liquidators to IBRC (with immediate effect to wind up its business and operations). At this early stage of the special liquidation Special Liquidators are engaged in intensive processes which involve inter alia, asserting control over the businesses, processes, systems and personnel of IBRC. It is important that focus is placed on assessing, reorganising and restructuring the day–to-day activities of the Bank to meet the primary objective of ensuring the purpose of the special liquidation is achieved, as this is key to ensuring that value is extracted from the liquidation.
142. Deputy Michael McGrath asked the Minister for Finance if all restructuring arrangements entered into by the Irish Bank Resolution Corporation prior to its liquidation with its customers in respect of mortgage arrears will now remain in place; and if he will make a statement on the matter. [7957/13]
Minister for Finance (Deputy Michael Noonan): All restructuring arrangements entered into by Irish Bank Resolution Corporation Limited prior to its liquidation remain in place. The contractual terms and conditions of mortgage customers will not change as a result of the appointment of the Special Liquidators and all debts owing to IBRC (In Special Liquidation) remain due and enforceable.
143. Deputy Michael McGrath asked the Minister for Finance in the context of the liquidation of the Irish Bank Resolution Corporation, the current status of the IBRC, pre-2011, defined contribution retirement savings plan; the impact of the liquidation on the benefits that will be paid to members of the scheme; and if he will make a statement on the matter. [7958/13]
Minister for Finance (Deputy Michael Noonan): Unfortunately my Department has been unable to obtain the information requested by the Deputy in the time available. I will write to the Deputy directly with the information as soon as it becomes available.
144. Deputy Michael McGrath asked the Minister for Finance if he will provide details of the termination payments that will be made to the former CEO of the Irish Bank Resolution Corporation, in liquidation (details supplied); and if he will make a statement on the matter. [7959/13]
Minister for Finance (Deputy Michael Noonan): Following the liquidation, all employment contracts in the Republic of Ireland have been terminated, including that of the former CEO, Mr Mike Aynsley. Mr Aynsley is entitled to apply for a statutory redundancy payment, a payment in respect of accrued but unused annual leave and a statutory notice payment, subject to the limits prescribed by statute.
145. Deputy Michael McGrath asked the Minister for Finance if he will provide detail of the termination payments that will be made to former senior executives at the Irish Bank Resolution Corporation, in liquidation; and if he will make a statement on the matter. [7960/13]
Minister for Finance (Deputy Michael Noonan): Following the liquidation, all employment contracts in the Republic of Ireland have been terminated, including those of the former Senior Executives. The Senior Executives are entitled to apply for a statutory redundancy payment, a payment in respect of accrued but unused annual leave and a statutory notice payment, subject to the limits prescribed by statute.
146. Deputy John Lyons asked the Minister for Finance if there was an effective corporate tax rate of 10%, what would the total tax take from corporation tax have been for 2010, 2011 and 2012; what it would be in 2013 and 2014; and if he will make a statement on the matter. [7961/13]
Minister for Finance (Deputy Michael Noonan): All companies in Ireland pay the standard 12.5% rate on their profits which are generated in Ireland. A higher 25% rate applies in respect of investment, rental and other non-trading profits and profits from certain petroleum, mining or land dealing activities. In a number of answers to previous Parliamentary Questions on this issue I have repeatedly stated that there is no agreed international methodology for calculating the ‘effective rate’ of corporation tax. With that in mind, I am unsure as to the premise of the Deputy’s question which seems to be that Ireland has an effective rate that is lower than 10%.
147. Deputy Michael McGrath asked the Minister for Finance if he will confirm the new contact details of the Irish Bank Resolution Corporation in special liquidation for the former bank's mortgage customers. [7968/13]
Minister for Finance (Deputy Michael Noonan): I can advise the Deputy that a Freephone number, 1800 303 632 has been in place in recent days to advise customers on the immediate impact of the liquidation on their loans and deposits. Subsequent to this, IBRC have reopened their communications lines for customers and the Special Liquidators took over the aforementioned Freephone number from my Department on Tuesday of this week.
148. Deputy Róisín Shortall asked the Minister for Finance the number of reviews of taxpayers that have been undertaken by the Revenue Commissioners in each of the years since the self-assessment system was adopted; the number of these where a discrepancy was identified; the amount recovered from such cases; if he will outline the way the Revenue Commissioners are minimising the risk of fraud and error arising from the self-assessment method; and if he will make a statement on the matter. [7979/13]
Minister for Finance (Deputy Michael Noonan): I am advised by the Revenue Commissioners that all developed countries operate some form of self-assessment system for their business taxpayers. The Irish self-assessment system ensures that there are tight controls in place for tax return filing rates which are borne out by the timely filing rates of 98% for large cases, 95% for medium cases and 80% for all other cases, across all taxes. This strategy is supported by a comprehensive compliance programme of audits, risk management interventions, special investigations and prosecutions. I am further advised that, as Self-Assessment for income tax was introduced in 1988 and for corporation tax in 1989 and as the data is not maintained in a suitable format, it is not possible to provide all the details sought by the Deputy without an extensive examination of Revenue records. However, they have supplied me with the Tables below, which give comprehensive data for seven years from 2006 to 2012. The various interventions shown are not confined to direct taxes, and would include VAT, Excise etc. where relevant.
The Commissioners also advise that these figures, year-on-year, are not directly comparable due to a re-labelling of compliance interventions and the continuing evolution of their compliance programmes to reflect changes in the economy and the efficient use of resources. Not all Revenue interventions take the form of formal audits or investigations and in accordance with their risk-based approach cases are selected for intervention based on the presence of various risk indicators. Each Revenue intervention is intended to be in the form which is most efficient in terms of time and resources, and which imposes the least cost on the taxpayer, whilst addressing the perceived risk and consequently Revenue carry out Risk Management Interventions, which take the form of Aspect Queries and Profile Interviews.
Revenue's objective in case working is to ensure that each case (taxpayer or business) is fully compliant with their legal obligations in relation to the keeping of proper books and records, the timely and accurate submission of required declarations and the prompt payment of tax and duty liabilities. This approach ensures that, as far as possible, the self-assessment system operates effectively and minimises instances of fraud or mistake.
The selection of cases in which to intervene is a critical step in Revenue’s compliance programme and case selection derives from a variety of sources. In addition to specific projects like the shadow economy project, Revenue also uses extensive third party data, good citizen’s reports and other intelligence to drive its compliance interventions. In the past two years, Revenue has also been using advanced analytics to help it identify indicators of fraud or error from taxpayer’s filings and they are regarded as a leading tax administration in the deployment of these technologies.
I am also informed that a major focus of Revenue’s activities in relation to self-assessed cash businesses is to tackle shadow economy activities including the suppression of sales, wages and income by registered businesses and fraudulent repayment claims. It is a multi-faceted issue that requires a co-ordinated and varied response.
Revenue tackles the problem of the shadow economy through its range of compliance and audit interventions including through targeted special projects. Case interventions are undertaken based on Revenue’s assessment of compliance risks, the level of those risks and other relevant information available. Revenue is using a wide range of methodologies to identify those operating in the shadow economy and is deploying the full range of compliance interventions.
The Deputy will be aware of the continuing strengthening of legislation to provide for a robust framework within which the Revenue Commissioners may tackle tax evasion, including recent provisions relating to the making of returns of transactions by merchant acquirers, and other payment settlement organisations, to the Revenue Commissioners and Regulations, introduced in 2011, requiring Government Departments and State Bodies to supply details to the Revenue Commissioners of payments made.
Revenue investigations have also detected the use of computer programmes or electronic devices to alter or conceal sales records. To counteract these risks, legislation was also enacted in 2011 providing penalties for the possession, use or supply of automated sales suppression devices known as "zappers" for the purpose of evading tax.
I am advised by the Revenue Commissioners that the results from all the various projects undertaken by Revenue are reflected in the general audit and compliance results from audits, assurance checks, and other risk management intervention which are published in Revenue’s Annual Report. The high level of success in securing settlements is a reflection of the targeted approach used by Revenue which is to focus its compliance resources on the areas of greatest risk. An associated strategy is to minimise the number of contacts with compliant taxpayers.
I am confident that the Revenue Commissioners have a very clear focus to target and confront those who do not comply, as set out in their Statement of Strategy for 2011 to 2013.
149. Deputy Róisín Shortall asked the Minister for Finance if the use by hospital consultants of public health facilities for work for which they charge private patient fees is taxable as a benefit-in-kind and, if not, the reason for same and his estimate of the yield that would arise if it were. [7980/13]
Minister for Finance (Deputy Michael Noonan): A benefit in kind charge under the provisions of Section 118 TCA 1997 arises where an employer incurs expense in the provision of living or other accommodation, entertainment, domestic or other services, or other benefits or facilities of whatever nature. The charge is based on the amount of the expense that is not made good to the employer by the employee. Facilities provided to hospital consultants for use in their private practice can include equipment, premises and staff. Determining the expense incurred by the employer in the provision of these facilities is particularly difficult. For example, the value of the use of hospital premises is defined as the annual rent that might be expected to be obtained on a yearly letting. In the case of a specialised building such as a hospital this would be difficult to ascertain. In the case of other assets such as machinery the value of the use of the machinery is taken to be 5% of its market value. Again, this would be difficult to determine given the nature of the equipment in a hospital.
Hospital facilities are not provided solely to enable the consultants to carry on private practice in the hospitals concerned. Clearly, the primary purpose of the provision of the facilities is to enable the consultant to treat public patients.
The difficulty in determining a benefit in kind charge is further compounded by the fact that the facilities can be shared by a number of consultants to varying degrees and that usage can vary depending on the availability of a consultant and the extent to which his or her specialist services may be required. Taking all these factors together it is difficult to establish for each individual consultant a charge that reflects the benefit received. Given that benefit in kind is operated via the PAYE system attempting to quantify a charge would impose a significant burden on payroll departments.
150. Deputy Noel Grealish asked the Minister for Finance further to Parliamentary Question No. 254 of 29 January 2013, if he will intervene with insurance companies with reference to the provision of flood cover for persons who previously made a flood claim under their insurance, but have since relocated to a new home and cannot secure flood insurance as a result of their previous claim; and if he will make a statement on the matter. [7981/13]
Minister for Finance (Deputy Michael Noonan): As indicated in my reply of 29 January 2013, the issue of provision of new flood cover or the renewal of existing flood cover is a commercial matter for insurance companies, which has to be based on a proper assessment of the risks they are accepting. The Deputy will recall that these are often considered on a case by case basis and it is important to be clear that neither the Government nor the Central Bank has any influence over this matter. Consequently I am not in a position to direct insurance companies to provide flood cover to specific individuals. My Department has however made enquiries with the Irish Insurance Federation (IIF) about the provision of flood cover in the circumstance you have described. While indicating that the decision to provide flood cover or not is a matter for each insurance company, their general view is that if the new home is in a low risk area from a flooding perspective then a good broker should be able to place the cover with an insurance company.
151. Deputy Joan Collins asked the Minister for Finance the total amount spent on outsourced security services in each Department; and if he will provide details of the companies providing these services. [7987/13]
Minister for Finance (Deputy Michael Noonan): In response to the Deputy’s question my Department provides shared accommodation services to the Department of Public Expenditure and Reform. In the period January 2012 to 31 December 2012 no money was spent on outsourced security services in respect of buildings occupied by staff of either the Department. Spend on outsourcing of security services in other Departments is a matter for each Department and subject to oversight not by the Department of Finance but rather the Department of Public Expenditure and Reform. I am informed by the Revenue Commissioners that the total spend on the provision of outsourced security services for Revenue in 2012 was €2,064,223. The following companies provided these services:
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