Brendan Griffin (Kerry South, Fine Gael)
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Question 9: To ask the Minister for Finance if he has considered the logistics and revenue raising potential of a progressive 10% to 25% levy on substantial winnings of over €500,000; if he will estimate what such a levy would generate for the State; and if he will make a statement on the matter. [5513/12]

Michael Noonan (Limerick City, Fine Gael)
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The proposed Betting (Amendment) Bill, which is being drafted at present, will amend the Betting Act 1931 to, inter alia, establish the regulatory framework for the licensing of remote bookmakers and betting exchanges, including measures to enforce the regulatory framework. The drafting of the Bill, which is fairly complex, is well advanced.

The Finance Act 2011 contained measures to allow for the extension of the 1% betting duty to remote bookmakers and for a 15% gross profit tax to betting exchanges. The taxation provisions are subject to a ministerial commencement order which can only be commenced when the Betting (Amendment) Bill is enacted.

As the Deputy may be aware, it is currently the bookmaker who is liable to pay the betting duty. When the betting duty is extended to the remote betting sector, liability will remain with the bookmaker. To do otherwise would provide an incentive for the punter to seek out ways to avoid paying the tax. From an enforcement point of view it is a far easier task to police a relatively small number of firms compared with hundreds of thousands of consumers. It is not possible to cost the levy as proposed by the Deputy, as neither my Department nor the Revenue Commissioners has access to the relevant data, that is, the level and breakdown of winning bets.

Brendan Griffin (Kerry South, Fine Gael)
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I thank the Minister for his response. The question I tabled refers specifically to substantial winnings of over €500,000. Whereas it is never popular to propose levies or other revenue-raising measures for the State, there is now a responsibility on all of us in this House to bring forward such proposals, as long as they are not deflationary and have no negative social impact. I have suggested that we could consider applying a progressive tax on lottery winnings over €500,000. I wish to cite a couple of examples.

Michael Kitt (Galway East, Fianna Fail)
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Does the Deputy have a question?

Brendan Griffin (Kerry South, Fine Gael)
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Yes. Will the Minister consider the following example? If someone is lucky enough to win €8 million in the lotto, which is quite a frequent occurrence here, a 10% tax on the amount over €500,000 up to €4 million would yield €350,000 for the State. A 20% levy on winnings over €4 million would yield a further €800,000, which would be €1.15 million for the State. The jackpot winner would still go away with €6.85 million, which I am sure he or she would be very happy with. Considering that there are 260 national lottery draws every year, with prizes exceeding €500,000, there is considerable potential for the State to generate revenue. It may be something that could be specifically examined. I am sure the national lottery would not be overly happy with this proposal, but it is a win-win situation. The State would win, while the jackpot winner would not complain too much.

Another example is that of Dolores McNamara who won over €115 million. Under my proposal the State could be in for a windfall in such a scenario of approximately €20 million. The EuroMillions winner, meanwhile, would still be up by €96.5 million. It is a proposal that warrants consideration.

Michael Noonan (Limerick City, Fine Gael)
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I have no plans at present to look at these measures. The lottery has been a very successful operation since Deputy Michael Creed's father, Donal Creed, first introduced it. It has funded many sporting activities in the country and is now funding educational activities and health services, where it replaces Exchequer funding. When one has a successful model going, I think one should let it operate. That is my position, although I am glad of any suggestions-----

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Like DEIS schools.

Michael Noonan (Limerick City, Fine Gael)
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-----on raising additional taxes. I am actually thinking of taking my holidays out in Dún Laoghaire next year - the sunny southeast.

Mick Wallace (Wexford, Independent)
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Deputy Boyd Barrett will give the Minister tea.

Michael Noonan (Limerick City, Fine Gael)
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I want to mix with some wealthy people, like Deputy Richard Boyd Barrett's neighbours out there.

Brendan Griffin (Kerry South, Fine Gael)
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I would not for one minute detract from the effectiveness of the national lottery. I can see the great work it has done over the years both in my constituency and elsewhere throughout the country, through the revenue it has raised. At the same time, however, I think my practical suggestion could be examined. Further down the list of questions, there is a proposal on SMS and MMS text levying which, based on current usage patterns, could generate up to €244 million, if implemented. The Minister could consider that positive step and it would not have a major deflationary impact on the economy or a negative social impact.

Michael Noonan (Limerick City, Fine Gael)
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I have heard the argument about a tax on text messages. During the week, I met a woman who told me that when she calls her daughter for her tea in the evening, she gets a text message from the bedroom and must text her daughter back. I remind the Deputy that there is already VAT on text messages at 23%.

Pearse Doherty (Donegal South West, Sinn Fein)
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I do not support the tax on lottery winnings. The national lottery uses the phrase, "It could be you" but it would be the Minister for Finance every Wednesday, Saturday and Monday. That would not go down well with the public. We can tax online gambling, which is not labour-intensive, and there is a need to consider the levies that could be placed on online gambling. Sinn Féin proposed 5% and it would bring in €100 million. The Minister should consider this.

Michael Noonan (Limerick City, Fine Gael)
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Arrangements were made by my predecessor in last year's Finance Bill in association with the 2011 budget but they can only be enacted by ministerial order when the base legislation has been produced. The arrangements are in place and the legislation is being prepared. I referred to it in this year's Budget Statement as an additional amount of money, but not a lot, because I am not sure how much will be collected or to what degree the collection system will be efficient. I am told it can be done and we will see where we are then. We can have a debate on it when I bring legislation to the House, which I hope to do before the summer.