Paschal Donohoe (Dublin Central, Fine Gael)
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I am informed by Revenue that the costs to the Exchequer, in relation to tax reliefs provided for pension contributions, are available at the following link, for the period 2014 to 2018:

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The information requested by the Deputy is available in the table rows titled “Pension Contribution (Retirement Annuity and PRSA)”, “Employees' Contributions to Approved Superannuation Schemes” and “Employers' Contributions To Approved Superannuation Schemes”. The costs for “Exemption of employers' contributions from employee BIK” for the same period are also included in this publication.

For the convenience of the Deputy, the following table sets out the relevant tax costs for the years 2014-2018:

I am further advised by Revenue that 2019 information will be published in the coming weeks at the same location. The total cost for “Pension Contribution (Retirement Annuity and PRSA)” and “Employees' Contributions to Approved Superannuation Schemes” for 2019 was €1,111m.

I trust this is of assistance.

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that information on stamp duty receipts on credits cards is published on the Revenue website at:

www.revenue.ie/en/corporate/information-about-revenue/statistics/receipts/receipts-stamp-duty.aspx.

The stamp duty receipts on credit cards would equate to the cost arising from the removal of this duty.

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 131 and 132 together.

I am advised that Revenue does not maintain a projected future cost for each of the schemes outlined by the Deputy, given the number of variables that would be involved.

However, the costs of the Employment Investment Incentive (EII), the Special Assignee Relief Programme (SARP), the Foreign Earnings Deduction (FED) and the Rent-a-Room scheme can be found in the ‘Cost of Tax Expenditures Report’which is published on the Revenue website at www.revenue.ie/en/corporate/documents/statistics/tax-expenditures/costs-tax-expenditures.pdf.

A summary table of the costs in relation to 2018 (the latest year for which data are available, except for SARP, in respect of which the 2019 figure is available) is as follows:

Regarding the Key Employee Engagement Scheme (KEEP), I am advised by Revenue that the first year the scheme became available was 2018.Generally, a qualifying employee must hold any share options granted under the scheme for at least 12 months prior to exercise. Therefore, 2019 was the earliest date that individuals were likely to exercise their options to acquire shares in qualifying companies. Revenue advises that the table below sets out the KEEP costs in 2019 and 2020:

With the exception of the EII, the costs set out above can be assumed to be very broadly indicative of the annual saving that might arise if the schemes were ended. In the case of the EII, enhancements to the scheme made in Finance Act 2021 may give rise to an additional tax foregone cost of in the region of €10 million in the current tax year. Taking this factor into account, it is estimated that the abolition of the scheme beyond the current year could give rise to savings broadly of the order of €25 million.

As matters stand, there is no sunset clause attached to the Rent-a-Room relief, but SARP and FED are due to expire on 31 December 2022. The current sunset clause for EII extends to 31 December 2024.

As part of the preparations for Budget 2023 and Finance Bill 2022, my Department has undertaken a review of KEEP. A public consultation took place as part of this review, inviting stakeholders to comment on the operation of the scheme as it currently stands and to submit proposals for further improvements to the scheme. The output from this review will be considered as part of the forthcoming the Budget and Finance Bill process.

Paschal Donohoe (Dublin Central, Fine Gael)
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The Domicile Levy was introduced in the 2010 Finance Act and is payable on a self-assessment basis on or before 31 October in the year following the valuation date. For example, the due date in respect of 2019 was 31 October 2020. The valuation date is 31 December each year.

Revenue have advised me of the amounts collected from the domicile levy for the years 2018, 2019 and 2020 and these are outlined in the table below. Data for the 2021 tax year are still being processed.

In relation to increasing the levy from €200,000 to €400,000, I am advised by Revenue that the amount of additional levy to be paid would be contingent on the amount of Irish income tax paid by each taxpayer and available to offset against the additional levy. As this will vary according to the level of income generated by each taxpayer, there is no reliable basis on which to provide an estimate of the additional revenue that would be raised by increasing the levy in the manner outlined by the Deputy.

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy will be aware, in the Finance Act 2021, I enhanced and formalised the tax arrangements for working from home in line with Government policy to facilitate and support remote working. Accordingly, for the tax year 2022, an income tax deduction amounting to 30% of the cost of vouched expenses for electricity, heat and broadband in respect of those days spent working from home can be claimed by taxpayers. This relief is known as Remote Working Relief. The amount of the relief will depend on the particular circumstances of the remote worker in terms of the level of costs incurred and their marginal tax rate.

At the time of Budget 2022, it was estimated that this measure would cost approximately €10 million in 2022 and €11 million in 2023.

As the Deputy may also be aware, employers may pay a tax-free amount of €3.20 per day to employees who satisfy the qualifying conditions for the Remote Working Relief. Revenue has confirmed that as this payment is made tax free, it does not have details of the number of employees involved. Any amounts paid exceeding the €3.20 daily rate are subject to tax, PRSI and USC in the normal manner. If employees claim Remote Working Relief, any payment by their employer for remote working expenses must be deducted from the claim.

Real time claims for Remote Working Relief became available on the 24th January 2022. I am advised by Revenue that for the year to June 2022, 1,401 individuals have submitted claims in ‘real-time’ in respect of Remote Working Relief. In monetary terms, relief of approximately €45,000 has been granted. It should be noted, however, that this is unlikely to be the final figure for such claims, as taxpayers have up to four years to claim expenses.

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 135, 146 and 147 together.

I am advised by Revenue that it is not possible to estimate the tax yield from abolishing these reliefs as this would depend on the dates of future disposals and claims.

Revenue’s analysis of the costs of Section 604A relief is available at the following link, for 2018 and 2019, the latest year for which fully analysed data are available:

www.revenue.ie/en/corporate/documents/statistics/tax-expenditures/relief-on-disposal-of-certain-land-or-buildings.pdf

For the Deputy’s information, Revenue’s analysis of entrepreneur relief for 2016 to 2019 is available at:

www.revenue.ie/en/corporate/documents/statistics/tax-expenditures/entrepreneur-relief-statistics.pdf

In relation to Question 38652/22, and for the Deputy’s information, the consideration amounts included on tax returns for 2014 to 2020, in respect of claims for retirement relief, are published at the following link:

www.revenue.ie/en/corporate/documents/statistics/income-distributors/summary-of-capital-gains-tax-returns.pdf

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 136 and 176 together.

I am advised that the Revenue Ready Reckoner shows the estimated yield from changes to carbon tax on page 23, including the yield from a €1 per tonne increase. The Ready Reckoner is available at:

www.revenue.ie/en/corporate/documents/statistics/ready-reckoner.pdf

The estimated yield from increases by other amounts can be extrapolated from the information in the table.

It is assumed that the Deputy is referring to setting the level of excise for auto-diesel, marked gas oil, kerosene, and fuel oil as being equal to that for Petrol. I am advised by Revenue that the estimated savings from eliminating excise forgone on auto-diesel, marked gas oil, kerosene and fuel oil are shown in the table following. The estimated savings from ending the diesel rebate scheme (DRS) and eliminating excise forgone for commercial sea navigation are also shown.

These estimates are based on 2021 data.

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 137, 138 and 166 together.

Section 118(5G) of the Taxes Consolidation Act 1997 (TCA 1997) provides for the Cycle to Work scheme. This scheme provides an exemption from benefit-in-kind (BIK) where an employer purchases a bicycle and associated safety equipment for an employee.

The work scheme operates on a self-administration basis. Relief is automatically available provided the employer is satisfied that the conditions of its particular scheme meet the requirements of the legislation. There is no notification procedure for employers involved. This approach was taken with the deliberate intention of keeping the scheme simple and reducing administration on the part of employers. Accordingly, there are no records available on the number of people availing of the scheme, or the number who accessed the maximum amount of tax relief or the cost of the scheme.

Tax expenditure reports prepared by my Department have estimated the cost in the full years 2017-2019 at €4 million (based on an assumption of 20,000 beneficiaries) and notes that this figure is an estimate as separate returns are not required under the scheme. This estimate was increased to €4.5 million in 2020 on foot of the changes made to the scheme by Section 9 of the Financial Provision (Covid-19)(No.2) Act 2020. This increased the allowable expenditure from €1,000 to €1,500 in respect of e-bikes and €1,250 in respect of bicycles and allowed the purchase of a new bicycle every 4 years instead of 5. The estimate was €5.5 million for 2021 with the full year impact of the changes. With an assumption of 20,000 beneficiaries, this gives an average of €275.

The potential cost of a cycle to school scheme would depend on uptake and the marginal rate of tax being paid by the parent and the threshold value allowed under such a scheme. CSO data from Census 2016 shows that 7,326 children aged between 5 and 12 years, and 7,282 students at school or college aged between 13 and 18 years used bicycles as their means of transport. This could give a potential uptake of over 14,000 but each child would not get a new bicycle each year.

Making certain assumptions in relation to cost and uptake on a similar basis as used for reporting on the cycle to work scheme in the tax expenditure reports, such a scheme is tentatively estimated to have a potential annual cost of approximately €1 million. However, the technical and administrative details of how such a scheme would operate would also need to be considered and could impact significantly on cost.

I should add that including bicycles for use by children to cycle to school would add to the administrative burden on employers of participating in the scheme. Furthermore, I would expect considerable deadweight in such a proposal with people benefitting who would have purchased a bicycle in any event.

If the threshold for the cycle to work scheme was reduced to €500, the estimated cost of the scheme would be reduced on a straight line basis by €3.5 million to €2 million. This is based on other assumptions such as number of beneficiaries remaining unchanged.

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that the list of the tax reliefs exempted from the High-Income Earner Restriction (HIER) and estimated cost of the relevant reliefs that are subject to the HIER for 2018 (the latest year for which data are available) can be found in the High Income Individuals’ RestrictionReport which is available on the Revenue website at www.revenue.ie/en/corporate/documents/research/ror-2018-report.pdf.

As stated on page 6 of that report, normal business-related expenses, deductions for capital allowances on plant and machinery, business-related trading losses and losses from a rental activity that do not arise from the use of specified reliefs are not restricted. In addition, personal tax credits are not affected by the restriction.

I am advised by Revenue that it is not possible to assess the potential implications of the extension of the restriction to other reliefs, as some reliefs are not individually itemised in tax returns filed by relevant individuals.

Additionally, I would note that the purpose of the HIER is to limit certain specified reliefs so that the relevant cohort of high income taxpayers is paying a minimum effective rate of tax. The HIER analysis published by Revenue indicates that this outcome is already being achieved.

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 140 and 141 together.

I am advised by Revenue that the valuation provided by property owners in the Local Property Tax return is the LPT band and not the exact valuation of the property; for example, properties valued by their owners at €750,001 fall into the valuation band €700,001 - €787,500. Therefore, it is not possible to provide an accurate estimate of the yield of the possible change outlined by the Deputy for properties valued over €750,001. However, based on assumptions, an additional yield of approximately €21 million has been tentatively estimated for the proposed changes of applying a higher rate of LPT of 0.25% to properties valued over €750,001, increasing the higher rate of the tax to 0.3% on the balance for properties valued over €1.05 million and applying a 0.4% rate on the further balance for properties valued over €1.75 million.

I am further advised by Revenue that, on a similar basis, an additional yield of €25 million has been tentatively estimated for applying a higher rate of LPT of 0.2875% to properties valued over €750,001, from increasing the higher rate of the tax to 0.3% on the balance for properties valued over €1.05 million and applying a 0.4% rate on the further balance for properties valued over €1.75 million.

In relation to Question 38644/22, it is assumed that the Deputy is referring to introducing an LPT rate of 0.25% on values over €750,001 and 0.2875% on values over €1.05 million, with the existing rate of 0.3% continuing to apply to values over €1.75 million. I am advised by Revenue that the estimated yield from such a change is in the region of €18.7 million.

The Deputy may also wish to note that the LPT does not comprise part of Exchequer receipts, and is paid to the Local Government Fund rather than the Exchequer.

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that the estimated yields from the standard rating of income tax reliefs costing in excess of €5 million and currently available at the marginal rate, based on data from 2019 tax returns, the latest year for which fully analysed data are available, are as shown in the following table. These estimates do not take into account any possible behavioural change on the part of taxpayers as a consequence of such a change.

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 143 and 144 together.

I am advised by Revenue that there is no requirement for information to be included in tax returns in relation to lump sums of less than €200,000, which is the current life-time limit on tax-free retirement lump sums. Therefore, there is no data available that could be used as the basis for an estimate of the savings from the changes outlined by the Deputy.

The Standard Fund Threshold (SFT) is the maximum allowable pension fund on retirement for tax purposes, which was introduced in Finance Act 2006 to prevent over-funding of pensions through tax-relieved arrangements. The threshold was initially set at €5 million; it was subsequently reduced to €2.3 million with effect from 7 December 2010, and further reduced to €2 million with effect from 1 January 2014.

I am advised by Revenue that information on the numbers and values of individual pension funds or on individual accrued benefits are not generally required to be provided to Revenue by the administrators of pension schemes and personal pension arrangements. Therefore, there is no underlying data available to Revenue on which to base reliable estimates of the savings that would arise from the proposed change to the SFT threshold.

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 145, 148 and 149 together.

I am advised by Revenue that the consideration amounts included on tax returns for previous years in respect of claims for principal private residence relief and retirement relief are published at the following link: www.revenue.ie/en/corporate/documents/statistics/income-distributors/summary-of-capital-gains-tax-returns.pdf

I am further advised that the yield from applying limits on these reliefs would depend on future disposals of the relevant assets, associated gains from these disposals and the impact of behavioural change as a result of these proposed changes. Therefore, any potential yields from the proposed changes cannot be accurately estimated.

Finally, I am advised by Revenue that it is not possible to provide the estimated yield from abolishing the capital gains tax relief that is given to property acquired between 7 December 2011 and 31 December 2014, as this would depend on the dates of disposal for future claims. However, analysis of previous claims of Section 604A relief is available at the following link:

www.revenue.ie/en/corporate/documents/statistics/tax-expenditures/relief-on-disposal-of-certain-land-or-buildings.pdf

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 150, 153 and 178 together.

It is assumed the Deputy is referring to Capital Acquisitions Tax (CAT) rather than Capital Gains Tax (CGT) as the reliefs and tax mentioned relate to CAT.

I am advised that the annual CAT receipts are published on the Revenue website at:

I am further advised that the Revenue Ready Reckoner, can be used to estimate the yield from the proposed changes to CAT reliefs, thresholds and rates, by extrapolating from the information on pages 15 to 17. The Ready Reckoner is available at:

.

Revenue advise that a breakdown of CAT receipts for recent years, including the yield from discretionary trust tax, is published at: .

Regarding an increase in the rate of discretionary trust tax from 6% to 20% would likley give rise to significant behavioural changes that are not possible to model. Therefore, there is no basis on which to provide an estimate of the yield from such a change.

Finally I am advised by Revenue that the yield from capping business and agricultural relief at €3 million and introducing a limit of 50% for both of these reliefs is tentatively estimated at €58 million for Business Relief and €64 million for Agricultural Relief.

Paschal Donohoe (Dublin Central, Fine Gael)
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The Help to Buy (HTB) incentive is a scheme to assist first-time purchasers with a 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 (DIRT) paid in the State over the previous four years, subject to limits outlined in the legislation. Section 477C Taxes Consolidation Act (TCA) 1997 outlines the definitions and conditions that apply to the HTB scheme.

I am advised by Revenue that the total value of approved and pending Help To Buy (HTB) claims for 2021 is €193.8m. The equivalent figure for the period from 1 January to 30 June 2022 is €94.4m.

Bearing in mind that HTB is a demand-led scheme which is subject to a broad range of variables, including housing completion rates and prices, it is not possible to provide a reliable estimate of the savings that would arise from abolition of the scheme. However, although it does not take account of any potential changes in taxpayer behaviour, the above costs can be assumed to be broadly indicative of the annual saving if the HTB scheme was abolished.

The Deputy may wish to note that work by external consultants, Mazars, on the review of HTB is nearing completion. The outcome of this review will help to inform decisions on the future of the scheme beyond its current sunset date of 31 December 2022. However, this is a matter that will fall to be considered by Government in the context of the Budget 2023 process and it would not be appropriate for me to offer comment further at this time.

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that the removal of the Employee Tax Credit and the Earned Income Tax Credit for individuals with incomes above €100,000 would have yielded an estimated €170 million and €205 million on a first and full-year basis respectively in 2019, the latest year for which fully-analysed data are available.

These estimates do not take account of any potential changes in taxpayer behaviour resulting from the proposed change; for example, a taxpayer on an income of €101,000 would have a lower after-tax pay than a taxpayer on an income of €100,000. The estimates are also based on assumptions on the distribution of credits within taxpayer units.

Paschal Donohoe (Dublin Central, Fine Gael)
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I welcome the research that the ESRI has undertaken on options for tax revenue raising in Ireland. The report provides significant insights into the exchequer, distributional and income effects of an array of potential tax changes, all of which are important considerations for budgetary policy. Among these, a number of wealth taxes were considered.

While I understand the background to calls for a specific wealth tax in Ireland, it is not the case that wealth in Ireland is untaxed, as taxes on wealth are already in place here.

These wealth taxes include Capital Gains Tax, Capital Acquisitions Tax and Local Property Tax, which between them, according to Revenue’s Annual Report for 2021, raised some €2.77 billion net. last year.

Any revenue raised from a new wealth tax may not therefore be additional to the existing forms of wealth taxation, as revenues from those taxes could be affected by the introduction of such a new tax.

As to the projected yield that might be derived from the wealth tax outlined by the Deputy in his question, I would note that in order to estimate the potential revenue from a wealth tax, it is necessary to identify the wealth held by individuals. As there is currently no such wealth tax in operation in Ireland, the Department understands that the Revenue Commissioners have no basis or requirement to compile the data needed to produce estimates in relation to a potential wealth tax. Although an individual's assets and liabilities are declared to the Revenue in a number of specific circumstances (for example, after a death), this information is not a complete measure of assets and liabilities in the State, nor is it recorded in a manner that would allow analysis of the implications of an overarching wealth based tax.

During 2016, my Department, jointly with the Economic and Social Research Institute (ESRI), conducted a research project into the distribution of wealth in Ireland and the potential implications of a wealth tax. The research formed part of an on-going joint-research programme with the ESRI on the Macro-Economy and Taxation. The research paper, available on the ESRI website (), presented results on the composition of wealth across both the wealth and income distributions in Ireland. A number of wealth tax scenarios were then applied to the Irish data (wealth tax regimes from other jurisdictions and hypothetical scenarios). In each case, the associated tax bases and revenue yields, the number of liable households across the income distribution, and the characteristics of the households affected are outlined. While the scenarios may not fully capture the parameters outlined in his question the Deputy I hope he will find them informative.

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy will be aware, the VAT rate applying to the tourism and hospitality sectors are due to revert to 13.5% on 1 March 2023. The additional VAT receipts in 2023 as a result of this increase are estimated to be in the region of €195m. This accounts for the VAT periods to end October. The returns for Nov/December trading will be received in January 2024.

The estimated additional yield from raising the VAT rate for these sectors on 1 January 2023 instead of 1 March 2023 is €88 million.

Please note that in-year policy measures do not form part of the Budget package for next year. The carryover cost of the reduced rate of VAT for the hospitality sector in the first months of 2023 will be accounted for in my Department’s fiscal projections but will not impact on the overall Budget package.

Paschal Donohoe (Dublin Central, Fine Gael)
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The Deputy should note that Revenue have advised me that the estimated cost of decreasing the standard rate of VAT by 1% for 12 months is €542 million.

Paschal Donohoe (Dublin Central, Fine Gael)
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As set out in my reply to a PQ asked by the Deputy on 17 May this year, one which he references in this PQ, work on this determining all aspects of the proposed new levy, including, but not confined to, the rate at which it will apply, is an ongoing process. My officials, with the assistance of colleagues in other Departments and agencies, as well as from Revenue, are continuing to work on a range of options in regards to such a levy. Therefore, given the need for this policy development work to progress in a confidential manner, I cannot provide an indication of the progress or direction on this matter at this time.

Paschal Donohoe (Dublin Central, Fine Gael)
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The Research & Development (R&D) Tax Credit provides a 25% tax credit for qualifying R&D expenditure. In the first instance, the credit reduces the CT liability of the company for the accounting period in which the relevant R&D expenditure is incurred. Any excess credit can be carried back to the preceding accounting period. Following this, any remaining excess credit can be carried forward indefinitely for use against future CT liabilities, or can be claimed as a repayable credit.

The company may apply for a refundable credit in three instalments, over 33 months. The first instalment to be paid will amount to 33% of the excess amount. The remaining balance of the excess amount will then be carried forward and used to reduce the company’s Corporation Tax liability of the next accounting period and then, if any of the excess amount still remains, a second instalment amounting to 50% of that remaining balance will become payable. Any remaining credit is again carried forward for offset against the company’s Corporation Tax liability of the following accounting period, and if any part of the excess R&D credit still remains, that amount will become payable not earlier than 24 months after the corporation tax pay and file date for the accounting period in which the R&D expenditure was incurred.

I am advised by Revenue that It is not possible to estimate the yield from ending the repayable element of the R&D tax credit, as information in respect of the future payments of the credit, which is dependent on the future profitability of claimant companies and on their level of qualifying R&D activity, is not known in advance.

Furthermore, as excess credit can be carried forward indefinitely for offset against future corporation tax liabilities, the elimination of the refundable element of the credit would in theory be largely a timing issue and not a net saving to the Exchequer. However it should be noted that behavioural changes could be expected from businesses if such a change were to be made, given the important role that the credit plays in incentivising and supporting innovative research in Ireland.

The Deputy may wish to note that information on the cost of the R&D tax credit for recent years is available on the Revenue website at the following link, and this includes a breakdown of the credit cost each year between offsets and repayable credits:

www.revenue.ie/en/corporate/documents/statistics/tax-expenditures/r-and-d-tax-credit-statistics.pdf.

Paschal Donohoe (Dublin Central, Fine Gael)
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Although the Digital Services Taxes which were introduced in France, Italy, and Spain were not precisely the same as each other, all three shared substantial overlaps with the Digital Services Tax proposed by the European Commission in 2018.

When making its proposal, the Commission estimated that an EU-wide Digital Services Tax could yield €5 billion per annum, to be shared between all EU Member States, based on levels of activity in Member States.

It would be reasonable to assume that Ireland’s share of that estimated yield could be calculated in proportion to the population of Ireland as a share of the population of the EU overall. Around the time of the proposal, Eurostat estimated the population of Ireland to be approximately 0.9% of the total population of the EU.

Applying this to the Commission’s overall estimated yield would mean that Ireland could collect approximately €45 million from introducing a Digital Services Tax of the type mentioned.

The net yield would be reduced to the extent that deductions from company profits for Digital Services Tax paid would reduce corporation tax receipts.

The European Commission’s proposal was based on (1) a €750 million global revenue threshold and (2) an EU-wide €50 million revenue from in-scope services threshold. Based on available data, it is not possible to estimate the potential yield of a Digital Services Tax with different thresholds.

It should be noted that Pillar One of the two-pillared solution to address the tax challenges brought about by the digitalisation of the economy, agreed last October by the OECD/G20 Inclusive Framework on BEPS, provides for the standstill and removal of Unilateral Measures such as Digital Services Taxes.

I firmly believe that Pillar’s One and Two of the agreement will be successfully implemented, in a manner which is faithful to the agreement. I am devoting considerable resources to this process. My officials, along with officials from the Revenue Commissioners, are engaged in intensive discussions with their counterparts from around the world at OECD working parties to ensure that Ireland's interests are protected.

It should also be noted that in a joint statement published last October, the U.S. Treasury and its counterparts in Austria, France, Italy, Spain, and the United Kingdom announced an agreement for the unwinding of Digital Services Taxes in return for the US dropping planned retaliatory trade sanctions on these countries.

It is important that any proposal avoids raising trade tensions and does not undermine the ongoing implementation of the OECD agreement. Implementation of the agreement will bring much needed stability to the international tax framework after the turbulence and uncertainty of the last couple of years. Throughout this process, I have remained convinced that a global approach under Pillar One of the OECD agreement is preferable to unilateral measures like a Digital Services Tax.

Paschal Donohoe (Dublin Central, Fine Gael)
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Tax relief for trade union subscriptions was previously provided for under section 472C of the Taxes Consolidation Act 1997. The relief was introduced in 2001 and abolished from 2011 onward.

A review of the appropriate treatment for tax purposes of trade union subscriptions and professional body fees was carried out by my Department in 2016 and included in the 2016 report on tax expenditures published on Budget day 2016. The review may be found at the following link: .

The review concluded that:

"... analysis of the scheme using the principles laid down by the Department’s Tax Expenditure Guidelines shows that it fails to reach the evaluation threshold to warrant introduction in this manner.

The reinstatement of this tax relief would have no justifiable policy rationale and does not express a defined policy objective. Given that individuals join trade unions largely for the well-known benefits of membership, and the potential value of the relief to an individual would equate to just over €1 per week, this scheme would have little to no incentive effect on the numbers choosing to join. There is no specific market failure that needs to be addressed by such a scheme, and it would consist largely of deadweight."

In 2020, my Department carried out a further analysis which took stock of where matters stand in relation to the issue of tax relief for trade union subscriptions and set out a number of policy options for consideration. This exercise suggested that, based on certain assumptions about numbers of beneficiaries, the measure could cost at least €36.9 million if reintroduced at the same level of support as existed in 2010. However, it also drew attention to the potentially significant dead weight element which would accompany the measure. That analysis was published with the 2020 Tax Strategy Group papers at the following link: assets.gov.ie/86995/006fad3c-ebb5-4b0e-b067-92f8102d6e43.pdf.

I am advised by Revenue that there are no current data available from tax returns on the number of taxpayers with trade union subscriptions and the costs of those trade union subscriptions. Therefore, there is no basis on which a cost can be estimated for the proposed measure.

However, the cost of the tax relief for trade union subscriptions in the seven years immediately prior to its end is published on Revenue's website. The following table sets out the cost and number of claims in each year from 2004 to 2010:

Paschal Donohoe (Dublin Central, Fine Gael)
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The previous tax relief in respect of rent paid, was abolished in Budget 2011, and it is no longer available to those that commenced renting for the first time from 8 December 2010. The ending of the relief followed a recommendation in the 2009 report by the Commission on Taxation that rent relief should be discontinued. The view of this independent commission was that, in the same manner in which mortgage interest relief increases the cost of housing, rent relief increases the cost of private rented accommodation.

At the time of its restriction, the rental tax relief cost the Exchequer up to €97m per annum. On certain assumptions, it is likely that the annual cost of the measures set in the details supplied out would be higher. However, I am advised by Revenue that it does not have sufficient data to calculate the estimated costs of the proposed measures, including the number of taxpayers who could avail of the relief, the amount of rent being paid by those taxpayers, and their individual capacities to absorb the various proposed credits.

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that information on Betting Duty receipts from traditional, remote and betting intermediaries is available for 2019 and 2020 on the Revenue website.

The breakdown of the 2021 receipts is as follows:

I am also advised that Revenue’s Ready Reckoner shows the estimated yield from the proposed changes to the Betting Duty rate and to the Betting Intermediary Duty Commission rate, on page 26. The Ready Reckoner is available on the Revenue website.

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that the estimated additional yield from a 25 cent and 50 cent increase per 20 cigarettes, with an additional 50% for roll your own, is shown in the following table.

Paschal Donohoe (Dublin Central, Fine Gael)
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Mineral oil tax (MOT) which comprises a carbon and non-carbon component is applied to auto diesel and petrol.As the Deputy will be aware, I introduced temporary reductions on the non carbon component of MOT applying to auto diesel and petrol earlier this year. These reductions are legislated to apply until 11 October 2022. The current rates of MOT applying to auto diesel and petrol are set out in the table below. The table also includes the MOT rates that would apply had the temporary cuts not been introduced.

I assume that the Deputy is referring to the difference in the non carbon component of MOT between petrol and diesel which applies in ordinary circumstances (without the reduction), commonly referred to as the Diesel Excise Gap. This excise gap amounts to 11.6 cents per litre.Increasing the non carbon charge on diesel by 3 cents annually with a final increase of 2.612 cents in 2026 would equalise the rates over a four year period as set out in the table below.It should be noted that as per the trajectory of carbon tax rate increases legislated for in Finance Act 2020, the carbon component charge of MOT will increase annually out to 2030. The pathway below includes the impact of the carbon tax rate increases which results in a higher overall rate of MOT applied to auto diesel in this scenario by 2026.

Excise Pathway to Equalisation by 2026 (by adding 3 cent annually until 2025 and 2.612 cent in 2026)

Petrol (Cent per Litre) Diesel (Cent per Litre)

The ready reckoner which can be accessed at the website address below, indicates that a 3 cent increase in the MOT rate on auto diesel would yield €85 million in a full year.

www.revenue.ie/en/corporate/documents/statistics/ready-reckoner.pdf.

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 167 to 169, inclusive, together.

I am advised by Revenue that the estimated yield from increasing the stamp duty rate from 10% to 17% for the purchase of 10 or more houses is in the region of €7 million annually. This estimate assumes that there would be no impact on the level of multiple property purchases due to this proposed increase.

It is not possible to estimate the additional yield if the higher Stamp Duty rates were extended to apartments and properties rented to local authorities, as the specific data is not available from the information on stamp duty returns provided to Revenue.

I am advised that pages 18 and 19 of Revenue’s Ready Reckoner can be used to estimate the yield from changes to the rate of Stamp Duty on property. The Ready Reckoner is available at the following link: www.revenue.ie/en/corporate/documents/statistics/ready-reckoner.pdf.

The Ready Reckoner can also be used to estimate the additional yield from the proposed 1% increase in the rate of Stamp Duty on all non-residential property and on sales above €500,000 only. The additional yield from a 1% increase in the rate on sales above €1,000,000 is estimated to be in the region of €58 million.

Finally, the Ready Reckoner can be used to extrapolate the estimated additional yield from increasing the commercial stamp duty rate to 15%. This estimated additional yield would be in the region of €555 million. However, it should be noted that this estimate does not take account of behavioral changes that would arise from changing the rate significantly.

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that taxpayer units on taxable incomes in excess of €200,000 had an effective tax rate of 42.1% in 2019. It is important to point out that this effective tax rate of 42.1% is in respect of income tax and Universal Social Charge and it does not include PRSI.

Therefore, it is assumed the Deputy is seeking the estimated additional yield from increasing the effective income tax rate to 40% on taxpayer units earning in excess of €200,000. On that basis, I am advised by Revenue that taxpayer units on taxable incomes in excess of €200,000 had a combined taxable income of €11,996m with a combined income tax liability of €4,137m, in 2019. As such, these taxpayers paid an average effective income tax rate of 34.5%. If the effective income tax rate applied to this income was 40%, the estimated increased amount of income tax collected would have been €660m approximately.