Tuesday, 16 Apr 2024

Middle East

Questions (219)

Ivana Bacik

Question:

219. Deputy Ivana Bacik asked the Minister for Finance if he will make a statement on the recent Ireland Strategic Investment Fund divestment from certain investments in occupied territories. [16164/24]

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Written answers

Minister for Finance

On Thursday, 4th April I was advised by the National Treasury Management Agency that it has decided to divest from certain ISIF global portfolio investments in companies that have certain activities in the Occupied Palestinian Territory.

ISIF is 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.

The decision will be implemented as soon as possible over the coming weeks.

I am advised ISIF will keep under review the alignment of relevant investments within its investment parameters and commercial objectives.

While recognising the independence of ISIF in the management of the investment portfolio, I believe this is the correct investment decision in respect of the assets it manages on behalf of the State.

Departmental Communications

Questions (220)

Darren O'Rourke

Question:

220. Deputy Darren O'Rourke asked the Minister for Finance If he has spoken with his Australian counterpart to date in 2024. [16272/24]

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Written answers

Minister for Finance

Ireland enjoys a deep and wide-ranging bilateral relationship with Australia, owing from our historic cultural and people-to-people ties, our economic and trade relationship, and our cooperation on global affairs across an array of fora and channels, including as members of a number of International Financial Institutions and international organisations.

While there is engagement between both of our Departments at senior official level, since my appointment as Minister for Finance in December 2022, I have not yet had direct engagement with Australia’s Finance Minister, Senator Katy Gallagher. However, given the breadth of our relationship, I look forward to an opportunity to engage with her and to continuing the long-standing engagement and cooperation between our countries and economies.

Primary Medical Certificates

Questions (221)

Emer Higgins

Question:

221. Deputy Emer Higgins asked the Minister for Finance to reconsider the exclusion of persons with single upper-limb amputations from eligibility for the primary medical certificate. [16293/24]

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Written answers

Minister for Finance

The Deputy will be aware that the final report of the National Disability Inclusion Strategy (NDIS) Transport Working Group's review of mobility and transport supports including the Disabled Drivers and Disabled Passenger’s Scheme (DDS), endorsed proposals for a modern, fit-for-purpose vehicle adaptation scheme in line with international best practice that would replace the DDS.

The Working Group was chaired by Minister Anne Rabbitte and led by the Department of Children, Equality, Disability, Integration and Youth (DCEDIY).

Access to transport for people with disabilities is a multifaceted issue that involves work carried out by multiple Government departments and agencies. Consequently under the aegis of the Department of Taoiseach officials from relevant Departments and agencies are meeting to discuss the issues arising from the NDIS report and to map a way forward.

My officials are proactively engaging with this Senior Officials Group's (SOG) work as an important step in considering ways to replace the DDS, as one specific personal transport response, in the context of broader Government consideration of holistic, multifaceted and integrated transport and mobility supports for those with a disability. Four meetings of the group have been held, in July, November and December 2023 and March 2024.

The Department of Finance has recently submitted a note to the group with my approval in mid-January 2024. This note outlines a proposal for a replacement scheme for the DDS which would be a needs-based, grant-led approach for necessary vehicle adaptations that could serve to improve the functional mobility of the individual. This proposal is in line with what the NDIS Transport Working Group Report endorsed.

This paper is currently being considered by the SOG. In that context, the Deputy should note that any further changes to the existing DDS would run counter to NDIS proposals to entirely replace the scheme with a modern, fit-for-purpose vehicular adaptation scheme.

Finally the Deputy should be aware that while my Department has oversight of the DDS, it does not have responsibility for disability policy, so any decision to put in place a new scheme to replace it will be a matter for Government.

Tax Reliefs

Questions (222)

Alan Farrell

Question:

222. Deputy Alan Farrell asked the Minister for Finance further to Parliamentary Question No. 272 of 20 March 2024, the reasons the relief on capital gains tax and capital acquisitions tax for landowners who have leased their land for the production of solar energy was not extended to landowners who have leased their land for the production of wind energy; and if he will make a statement on the matter. [16305/24]

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Written answers

Minister for Finance

Prior to Finance Act 2017, agricultural land which was leased for solar panels was not classified as qualifying agricultural property for the purposes of Capital Gains Tax retirement relief or agricultural relief from Capital Acquisitions Tax.

Following a review announced in Budget 2018, and in recognition of the then Government's commitment to facilitate the development of solar energy projects in Ireland, a revised approach was introduced whereby it is now possible for land leased for the installation of solar panels to be classified as qualifying agricultural property under certain conditions. A key condition is that the total area of land under lease and on which solar panels are installed does not exceed 50% of the total area of agricultural land.

While introducing this amendment, it was important that we did not lose sight of the fundamental principle which underpins our policy in relation to agricultural relief.

Allowing land leased for solar panels to be classified as qualifying agricultural property is an important element in encouraging solar energy projects. However, this must also be carefully balanced with the overarching objectives of this valuable relief which aims to encourage the inter-generational transfer of agricultural land which is being actively farmed. Any further changes in this policy must be carefully weighed up against the original intention of the reliefs in question. It remains important that the active farming of land be prioritised in line with the original policy intent of the reliefs.

Through the Climate Action Plan, Ireland has committed to delivering up to 80% of the State’s electricity from renewable sources by 2030, to be achieved through the delivery of onshore wind, offshore wind and solar energy.

In support of these targets there are already a number of supports in place which aim to accelerate the development of the renewable energy sector, including the renewable electricity support scheme, and measures which aim to develop micro and small-scale generation, through actions such as grant funding and enabling small-scale production to participate in energy markets.

The options available for setting CAT rules must, like all tax measures, be balanced against competing demands and considered as part of the annual Budget and Finance Bill process.

Tax Code

Questions (223)

Cian O'Callaghan

Question:

223. Deputy Cian O'Callaghan asked the Minister for Finance if the Government plans to introduce any tax relief, or a reduction in local property tax, for residents who are also paying management fees; and if he will make a statement on the matter. [16383/24]

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Written answers

Minister for Finance

The Deputy will be aware that it is a long-standing practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.

The Government decided upon the introduction of the Local Property Tax (LPT), that a liability to the tax should apply to all owners of residential properties with a limited number of exemptions and no deductions. Limiting the exemptions and deductions available allows the rate to be kept low for those liable persons who do not qualify for an exemption.

The proceeds of the LPT are largely used in the general provision and maintenance of infrastructure, services and amenities in a local authority area, such as the maintenance and provision of public roads, footpaths, lighting, open spaces, surface water drainage and other public amenities. All property owners benefit from this expenditure in their locality, regardless of whether they are obliged to pay management fees or not.

A requirement to pay a management fee or service charge to property management companies is not relevant in determining whether a property is subject to the LPT. Accordingly, whilst those who are liable for these payments may be exempt from LPT for another reason, or may be entitled to avail of a deferral arrangement under the provisions contained in the legislation, there is no specific exemption for the payment of management fees, nor is there provision to offset the amount paid on management fees against LPT. There are no plans to change this.

Tax Data

Questions (224)

Alan Kelly

Question:

224. Deputy Alan Kelly asked the Minister for Finance the estimated revenue that would be raised to the end of January 2025 by tapering personal PAYE and earned income tax credit at a rate of 2% per €1,000 for individuals' income between €180,000 and €300,000, effective from 1 May 2024. [16407/24]

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Written answers

Minister for Finance

Following consultation with the Deputy, I understand that the question relates to reducing the personal, PAYE and earned income tax credits of taxpayers by 2 per cent in respect of each €1,000 of income in excess of €180,000 and not exceeding €230,000, such that those on incomes in excess of €230,000 have no entitlement to those credits.

I am advised by Revenue that their micro-simulation modelling tool, Tax Modeller, is built to model scenarios on a taxpayer unit basis (i.e. including jointly assessed couples as one taxpayer unit). As such, it does not generate any outputs on an individualised basis, and it is therefore not possible to estimate changes to tax credits on an individual basis for a projected tax year, i.e. the tax year 2024.

However, incomes recorded on historic tax returns can be used to estimate the potential yield and/or cost associated with the adjustment of tax credits. As 2021 is the latest year for which full tax return data is currently available to be analysed, Revenue has undertaken estimates in relation to the 2021 tax year for the tapering of the tax credits referred to by the Deputy to provide an estimated yield that may arise from this proposal. This estimate is based on gross income.

It should be noted that although the values of the personal tax credit, PAYE tax credit and the earned income credit have increased since 2021, (as provided for in Budget 2022, 2023 and 2024), the 2021 values for the credits were utilised for consistency purposes in preparing these estimates.

Based on this, I am advised by Revenue that the yield in 2021 from tapering the credits as outlined by the Deputy would have been an estimated €130 million. This estimate relates to the yield if the tapering of tax credits was implemented for the full year 2021.

Tax Exemptions

Questions (225)

Michael Ring

Question:

225. Deputy Michael Ring asked the Minister for Finance if he will confirm that rent paid by the State to individual landlords for the housing of refugees is tax free; if he will compare this situation to similar payments to hotels, guesthouses, charities, and local community groups; and if he will make a statement on the matter. [16499/24]

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Written answers

Minister for Finance

I am advised by Revenue that income received for providing accommodation is usually taxable. However, where rental payments meet the conditions for rent-a-room relief, which is provided for in section 216A TCA, a tax liability may not arise. The relief applies to sums arising to an individual in respect of the letting of a room or rooms in his or her home for residential purposes and the provision of meals or other services in connection with the letting; the status of the tenant is not relevant. The income from such lettings may be exempt from income tax, USC and PRSI where the sums arising in a calendar year do not exceed the annual limit, which is €14,000. This limit applies to the gross payments from the tenant to the individual, rather than the rental profit. If the limit is exceeded, the full amount of the income is liable to tax, USC and PRSI rather than just any excess over €14,000. Rent-a-room relief only applies to individuals and cannot be claimed by companies or other entities.

In certain circumstances, amounts paid by the State for the accommodation of those with temporary protection status may not be liable to tax, USC and PRSI. The Accommodation Recognition Payment (ARP) is a financial contribution for the hosting of Temporary Protection Beneficiaries from Ukraine, which is provided for in Part 2 of the Civil Law (Miscellaneous Provisions) Act 2022 and is currently set at €800 per calendar month. Section 216E Taxes Consolidation Act 1997 (TCA) provides that the ARP shall all not be reckoned in computing income for the purposes of the Income Tax Acts. Section 6 of the 2022 Act provides that the ARP is only payable to individuals. This payment is not payable if there is a rental agreement with the person being hosted.

Income for businesses trading as guesthouses and hotels will be taxable under Case I as the income generally arises in the course of a trade. One of the determining factors in assessing whether income arises in the course of a trade will generally be the frequency of which the property/room is available for occupancy and its usage by guests. For the income to be considered trading income, the property/room would be expected to be available for rent on a frequent and regular basis, rather than on a once-off or occasional basis. Persons who provide guest accommodation on a once-off, casual or occasional basis will not be regarded as carrying on sufficient activity to constitute a trade and will instead be chargeable to income tax under Case IV.

Sections 207 and 208 TCA provide that a body established for charitable purposes is exempt from tax on certain income to the extent that the income is applied solely for those charitable purposes. This may apply to charities receiving payment from the State for housing international protection applicants. A community group may be eligible for exemption under this section if it holds the charitable tax exemption.

Banking Sector

Questions (226)

Joe McHugh

Question:

226. Deputy Joe McHugh asked the Minister for Finance if a company (details supplied) is signed up to the contingent reimbursement model code; if the company has an Irish banking licence; and if he will make a statement on the matter. [16500/24]

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Written answers

Minister for Finance

I presume the Deputy is referring to the Contingent Reimbursement Model operating the UK. It is a voluntary code that sets out consumer protection standards to reduce APP scams. Information on the internet indicates that signatory firms commit to procedures to detect, prevent and respond to APP scams, prevention of accounts being used to launder the proceeds of APP scams, and reimbursing customers who are not to blame for the success of a scam. According to the website of the Lending Standards Board, which describes itself as a self-regulatory body for the banking and lending industry in the UK, there are currently eight signatories (plus their subsidiaries) and the entity referred to by the Deputy is not listed as a signatory. The CRM is a UK initiative so it has no applicability to the Irish or wider EU jurisdiction.

Revolut Bank UAB is authorised by the Bank of Lithuania in the Republic of Lithuania and provides services in Ireland on a cross-border basis.

Housing Schemes

Questions (227)

Robert Troy

Question:

227. Deputy Robert Troy asked the Minister for Finance if the eligibility for help to buy in the case of a person (details supplied) will be reviewed. [16519/24]

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Written answers

Minister for Finance

The Help to Buy (HTB) incentive is a scheme to assist first-time purchasers with the deposit they need to buy or build a new house or apartment. The incentive gives a refund on Income Tax and Deposit Interest Retention Tax paid in the State over the previous four years, subject to limits outlined in the legislation. Section 477C Taxes Consolidation Act 1997 outlines the definitions and conditions that apply to the scheme.

For a property to qualify for HTB, it must be new or converted for use as a dwelling, having not previously been used as a dwelling. Additionally, the purchase value/approved valuation of the property must not exceed €500,000.

Section 477C (1) Taxes Consolidation Act (TCA) 1997, requires the purchase value of the qualifying residence to not exceed €500,000. In the case of a self-build residence, the purchase value is defined as the approved valuation, being ‘the valuation of the residence that, at the time the qualifying loan is entered into, is approved by the qualifying lender as being the valuation of the residence’.

I am advised by Revenue that the property concerned is ineligible for the HTB Scheme as the official documentation from the mortgage lender, at the time the mortgage was entered into, valued the property in excess of €500,000. Notwithstanding that an updated valuation has now been provided, Revenue advises that it does not meet the statutory definition of approved valuations, per Section 477C (1) TCA 1997, as it was not approved by the lender at the time the mortgage was entered into.

Further information in relation the conditions and operation of the Help to Buy Scheme are contained in Revenue’s Tax and Duty Manual Part 15-01-46, www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-46.pdf.

Tax Exemptions

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Written answers

Minister for Finance

I propose to take Questions Nos. 228, 229, 233 and 236 to 239, inclusive, together.

As the Deputies will be aware, the VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. Under our legislation the provision of medical care services by recognised medical professionals are exempt from VAT. This includes health professionals registered under the Medical Practitioners Act 2007, the Nurses and Midwives Act 2011, and those engaged in a regulated profession designated under Section 4 of the Health and Social Care Professionals Act 2005.

Statutory Instrument No. 170 of 2018 (Health and Social Care Professionals Act 2005 (Regulations 2018)) of 2 July 2018 designates psychotherapists and counsellors as a regulated profession and establishes the Counsellors and Psychotherapists Registration Board. Professional counselling and psychotherapy services provided by persons registered by this Board are exempt from VAT from the date of their registration. Where such services are supplied by a person who is not so registered (including where the services are provided by a person in advance of their being so registered) then the supply of the service is liable to the reduced rate of VAT, currently 13.5%.

Psychologists are listed as designated professionals in the Health and Social Care Professionals Act 2005, although the register of psychologists envisaged by that legislation has not yet opened. I am advised by Revenue that, because the supply of services by psychologists were exempt from VAT for many years prior to the 2005 Health legislation, that pre-existing exemption has been maintained pending commencement of the Psychologists register.

On 27 February 2019, the then Minister for Health, Simon Harris TD, confirmed the establishment of and appointment of members to the Counsellors and Psychotherapists Registration Board, under the Health and Social Care Professionals Act 2005 (amended) to regulate the professions of Counsellors and Psychotherapists. The thirteen members of the Counsellors and Psychotherapists Registration Board were appointed with effect from 25 February 2019.

Questions on the establishment of the Counsellors and Psychotherapists Registration Board and their progress in opening their register are a matter for my colleague, the Minister for Health.

I understand that officials in my Department have engaged with their counterparts in the Department of Health in relation to this matter and have advised them that the VAT exemption in question will apply from the date of registration by the Counsellors and Psychotherapists Registration Board.

Question No. 229 answered with Question No. 228.

Tax Code

Questions (230)

Jennifer Murnane O'Connor

Question:

230. Deputy Jennifer Murnane O'Connor asked the Minister for Finance if he will cancel the increases in excise duty on petrol and diesel scheduled for August and October of this year, given the cost-of-living pressures facing households, and their impact on trade for businesses and road users; and if he will make a statement on the matter. [16602/24]

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Written answers

Minister for Finance

At the outset, the Deputy should note that both I and the Government are conscious of the implications of fuel costs for all sectors of society.

This is reflected in the fact that in 2022 in light of the acute impact rising prices were having on households and business, the Government provided for excise rate reductions in the order of 21, 16 and 5.4 cent per litre on petrol, auto diesel and Marked Gas Oil (MGO) respectively. These temporary reductions were due to end initially on 31 August 2022 but following review and monitoring of fuel prices they were extended until February 2023 with a phased restoration beginning in June 2023, followed by a second restoration in September 2023. A final restoration of excise rates was due to take place on 31 October 2023 but in Budget 2024, I provided for a further extension until 31 March 2024 with a phased restoration occurring in two stages ; on 1 April 2024 and 1 August 2024.

The first stage of this final restoration of Mineral Oil Tax rate increases came into effect on 1 April 2024. Inclusive of VAT the Mineral Oil Tax rates on petrol, auto-diesel, and marked gas oil increased by 4, 3 and 1.7 cents per litre respectively. The amounts due as part of the final restoration scheduled for 1 August 2024 are similar in size , i.e. 4, 3 and 1.7 cents per litre respectively.

In addition to rate increases related to reversing the 2022 Mineral Oil Tax cuts, increases to the carbon component rates of Mineral Oil Tax on marked gas oil are legislated to come into effect on 1 May 2024 when the amount charged per tonne of carbon dioxide emissions from non-auto fuels increases from €48.50 to €56.00. This increase, inclusive of VAT, will add 2.3 cents per litre to marked gas oil.

Increases to carbon component rates of Mineral Oil Tax on petrol and auto-diesel are legislated to come into effect on 9 October 2024 when the amount charged per tonne of carbon dioxide emissions increases from €56 to €63.50. The 9 October 2024 rate increases will add, inclusive of VAT, 2 cents per litre to petrol and 2.5 cents per litre to auto-diesel.

While I recognise that households and business continue to face challenges, the Government must strike the appropriate balance between providing support and avoiding fuelling cyclical inflationary trends.

A number of factors affect the final retail price of fuels including energy market dynamics, wholesale pricing, individual retail pricing policy, transport costs, exchange rate fluctuations and taxation. While taxation affects the final retail price, amendments to tax rates cannot fully absorb price shocks given the larger impacts of energy markets, embedded costs as well as pricing policy at wholesale and retail level. The Government has provided relief to consumers and businesses since 2022 through a number of support measures including temporary reductions in excise. However, these measures were introduced as temporary support measures and involve an ongoing cost to the exchequer while they are retained.

Finally, the Deputy should note that I will continue to monitor and review the position in the coming months in the context of the final phase of excise rate restorations due to take place in August 2024.

Currency Circulation

Questions (231)

Jennifer Murnane O'Connor

Question:

231. Deputy Jennifer Murnane O'Connor asked the Minister for Finance if establishments and organisations are entitled to refuse to take cash; if there are steps being taken to ensure consumers can continue to use cash in transactions; if there are plans to put such an entitlement to use cash on a statutory basis; how his Department proposes to protect the role of cash in the Irish society and economy in the future; and if he will make a statement on the matter. [16603/24]

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Written answers

Minister for Finance

Where a business places no restrictions on the means of payment it is prepared to accept, it must accept cash as legal tender when offered by a customer to settle a debt that has arisen. If a business specifies payment must be in a form other than cash, the customer cannot subsequently claim a legal right to pay in cash. This can be achieved by, for example, placing a sign stating, “cash not accepted” or “card payment only” at the store entrance or check out area.

As a matter of common law, contracts are formed by offer and acceptance. In general terms, a contract is formed between a retailer and a customer when a retailer accepts an offer made by a customer. The terms which apply to such a contract are a matter for the parties to determine and will depend on the circumstances of the case. The Consumer Rights Act 2022, which was sponsored by the Minister for Enterprise Trade & Employment, applies to contracts entered into between retailers and consumers on or after 29 November 2022.

One of the recommendations of the Department of Finance's Retail Banking Review, published in 2022, was that the Department of Finance should lead on the preparation of a new National Payments Strategy to be completed in 2024. The National Payments Strategy will set out a roadmap for the future evolution of the entire payments system, taking account of developments in digital payments, the use of cheques and other issues, and guide how future changes should be made to the entire payments system.

A key focus of the new National Payments Strategy is to ensure Ireland has an accessible and innovative payments system, as this is vital for our society and economy. All citizens should be able to participate fully in all aspects of modern life using digital or cash methods of payment. While technology can enable vulnerable groups to partake in society in new ways, it should not exclude them. I want to ensure choice is at the centre of our future payments strategy.

The Strategy is also specifically considering the issue of the acceptance of cash and whether the Minister for Finance should have the regulatory power to require critical sectors or sub-sectors to accept cash. The policy position on the acceptance of cash by public bodies is also being examined.

The Strategy should also be informed by, and aligned with, the retail payment strategies of both the EU Commission and the Eurosystem. For example, on 28 June 2023 the European Commission put forward two proposals within a ‘single currency package’ to ensure that individuals and businesses can continue to access and pay with euro banknotes and coins across the euro area, and to set out a framework for a possible new digital form of the euro that the European Central Bank could choose to issue in the future, as a complement to cash.

The proposal on euro banknotes published by the Commission the draft Regulation on Legal Tender. Its primary focus is access to and acceptance of cash across Member States. The proposal places an obligation on Member States to monitor access to cash and report their assessment to the Commission and the ECB annually. Under the proposal, where the level of acceptance of cash is undermining the legal tender status of euro banknotes and coins, Member States will be required to set out remedial actions they will take. The draft regulation is being considered separately by the Council and the European Parliament. at the moment.

The deputy should also be aware that the Retail Banking Review concluded that cash, despite a decline in its usage, remains an important element of the payments system and the broader economy and it is essential that cash remains readily available to customers through ATMs and other means across the country. It also concluded that there was reasonable access to cash at the time of publication, but noted that neither the Minister for Finance, nor the Central Bank, had any powers to ensure this.

Accordingly, the Review recommended that the Department of Finance should develop Access to Cash legislation and prepare heads of a bill with the initial objective of developing criteria that would secure access to cash at about the levels prevailing in December 2022, but also provide that this criteria be amended appropriately in future as and when cash usage declines further.

Accordingly, on 23 January, I published the General Scheme of the Access to Cash Bill 2024. The aim of the Bill is to ensure continued reasonable access to cash in the State based, initially, on December 2022 levels, adjusted for the subsequent exits of Ulster Bank and KBC. The Bill also aims to ensure that evolution of the access to cash infrastructure does not move ahead of society's needs and expectations and that the future evolution is handled in a fair, transparent, and equitable manner.

The legislation will allow me to prescribe regional requirements for the minimum numbers of ATMs per 100,000 people, the proportion of the population that must be no more than 10 km from an ATM, and the proportion of the population that must be no more than 10 km from a “cash service point”.

The Bill will require entities, whose share of current accounts and household deposits exceed percentages I will prescribe, to be responsible for maintaining access to cash levels. The designated entities, as they will be known, will, initially, be the three main retail banks.

The Bill also provides for the remedying of “local deficiencies.” These are locations within a Nomenclature of Territorial Units for Statistics (NUTS3) region where particular difficulties arise in accessing cash. The Central Bank will assess such cases and, where warranted, may require designated entities to address the issue. The Central Bank will prepare and publish guidance on local deficiencies prior to implementation of this provision.

Although ATM deployers are required to comply with various security requirements set by the Private Security Authority, the operation of ATMs is not currently regulated by the Central Bank. As a result, there are no codes or regulations governing service standards, including hours of operation, denomination stocking, outages and maximum repair times, and reporting is voluntary. There is also no requirement to give notice of decisions to close or install ATMs or indeed of a decision to exit the business or enter it. The Access to Cash Bill will address these matters.

Department of Finance officials met the Joint Committee on Finance, Public Expenditure and Reform and Taoiseach in February, and the Committees pre-legislative scrutiny report on the Access to Cash Bill was recently published. The recommendations therein will be considered as the drafting of the Bill continues.

Cash has an important role in both society and the economy, and involves both access to, and acceptance of, cash. I will continue to work to protect that role.

Covid-19 Pandemic Supports

Questions (232)

Jennifer Murnane O'Connor

Question:

232. Deputy Jennifer Murnane O'Connor asked the Minister for Finance the changes that are being considered to the debt warehousing scheme to support private businesses availing of the scheme; and if he will make a statement on the matter. [16605/24]

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Written answers

Minister for Finance

The Tax Debt Warehousing scheme has provided vital and practical liquidity support to businesses by assisting them with their cash-flow during difficult trading periods. The Scheme allowed businesses to temporarily defer VAT and Employer PAYE, certain self-assessed income tax liabilities, and Temporary Wage Subsidy Scheme and Employment Wage Subsidy Scheme overpayments on an interest-free basis for an extended period of time until end-December 2022, or end-April 2023 for those in the extended scheme.

After that interest-free period, a reduced interest rate of 3 per cent was to be applied until either the warehoused debt was paid or the business otherwise exited the scheme. However, on 5th February, I announced that this interest rate has been reduced to 0 per cent.

This change has been made in light of the unique nature of the warehoused debt, and in order to further support otherwise viable businesses which were impacted by public health restrictions during the pandemic. While the necessary legislation will be introduced at the next available opportunity, in the interim Revenue has confirmed that it will operate the reduced rate on an administrative basis.

Revenue has also confirmed that it has started the process of refunding any taxpayers who have already paid the 3 per cent interest rate in respect of warehoused debt and that it has contacted customers who have entered a Phased Payment Agreement (PPA) to adjust the terms of their PPA to take account of the 0 per cent interest.

At end-March 2024, €1.65 billion of warehoused debt was owed by 55,490 individual entities, with 70 per cent of those customers having outstanding liabilities of less than €5,000. Revenue has issued letters to taxpayers with warehoused debt to outline their payment options, with further outreach and communications campaigns planned.

Businesses availing of the scheme are required to engage with Revenue by 1 May 2024 to make arrangements to pay the debt over an agreed period of time, based on their individual circumstances.

Revenue has advised that their approach will be flexible in relation to payment plans on warehoused debt, having regard to the financial circumstances of each case and the customer's capacity to pay. These flexibilities include the possibility to extend the duration of payment arrangements beyond the typical three to five-year duration. In addition, Revenue has confirmed that an initial down payment may not always be required upon commencing a payment arrangement.

Revenue has also advised that a number of additional flexibilities are available to address any payment difficulties that may arise during the term of the payment arrangement, such as options to take a payment break, deferral of next payment due, amendment to payment date and amendment to monthly payment amounts.

It remains a key condition of the scheme that businesses continue to file their current tax returns and pay current liabilities as they fall due. By doing so, businesses will benefit from the 0 per cent interest rate and flexible payment options available in respect of warehoused debt. The consequence of not meeting these conditions is that the warehouse facility is revoked, which will result in the standard interest rate of 10 per cent applying and the immediate enforcement of all outstanding debt, including interest.

Where businesses are experiencing cashflow difficulties impacting their ability to meet ongoing tax obligations on a timely basis, the advice remains to engage with Revenue as soon as such difficulties start to arise, so that an agreed solution can be found. Where there is meaningful and proactive engagement, Revenue will work with businesses and give them every possible support in managing the payment of the debt over a timeline that suits the individual circumstances of the business.

Question No. 233 answered with Question No. 228.

Departmental Reports

Questions (234)

Ivana Bacik

Question:

234. Deputy Ivana Bacik asked the Minister for Finance the timeline for publishing the updated report on the funding landscape for housing delivery; and if he will make a statement on the matter. [16628/24]

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Written answers

Minister for Finance

As the Deputy is aware the Housing for All Investment Workstream, chaired by the Department of Finance, was established to support the delivery of the Government's Housing for All plan. A key commitment of the Investment Workstream has been to advance the understanding of the funding landscape for the residential development. In 2023, the Department published a comprehensive report on the drivers of the cost and availability of finance for residential development ("Project Emerald" report) and continues to monitor the funding landscape on an ongoing basis.

The annual update of Housing for All, published in November 2023, included a priority action for the Investment Group to undertake stakeholder engagement and prepare an updated report on the availability, composition, and flow of finance for residential development.

I understand that the key findings from this updated report will be included in the Q1 2024 Housing for All Progress Update Report to be published in the coming weeks.

Departmental Reviews

Questions (235)

Ivana Bacik

Question:

235. Deputy Ivana Bacik asked the Minister for Finance the progress in reviewing the Ireland Strategic Investment Fund funding programme, which allocated an additional €400 million for equity-based housing investments; and if he will make a statement on the matter. [16657/24]

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Written answers

Minister for Finance

As the Deputy is aware, in July 2023, I announced an extension to the Ireland Strategic Investment Fund (ISIF) funding programme to deliver new homes, with a new €400 million allocation for equity-based investments in new housing projects.

This allocation builds on ISIF’s existing housing related commitments of €1.2 billion which has supported the delivery of 11,250 new homes thus far and is targeting the delivery of over 25,000 new homes by 2025 for owner-occupiers, renters, people who need social housing and students.

The updated Housing for All plan, published in November 2023, includes a number of actions relating to financing and investment. One of these actions is a review of the ISIF funding programme. This review is currently underway and is on target to be presented to the Housing for All Investment Group in Q2 2024, as required under the Housing for All Action Plan.

Question No. 236 answered with Question No. 228.