Joan Collins (Dublin South Central, Independent)
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81. To ask the Minister for Finance the potential loss of jobs and the industries which would be affected if Ireland was to introduce a 0.1% financial transaction tax on the trading of bonds and shares and 0.1% on the value of derivative agreements and financial market bets; if he will provide evidence in this regard; and if he will make a statement on the matter. [29035/16]

Joan Collins (Dublin South Central, Independent)
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84. To ask the Minister for Finance his views of the potential loss of jobs and the industries which would be affected if Ireland was to introduce a 0.1% financial transaction tax on the trading of bonds and shares and a 0.1% on the value of derivative agreements and financial market bets; and if he will provide evidence of same. [29090/16]

Joan Collins (Dublin South Central, Independent)
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88. To ask the Minister for Finance the reason the Government will not introduce a financial transaction tax; if a study has been done which included a job-proofing exercise; and if so if he will make that study available. [29129/16]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 81, 84 and 88 together.

The rates presently being discussed in the EU Commission proposal for a Financial Transactions Tax (FTT) are 0.1% on securities (shares and bonds) and 0.01% on derivatives and not the 0.1% rate on derivatives mentioned by the Deputy in her question.

In relation to discussions at EU level, the position taken by this Government and the previous Government consistent position is that a Financial Transactions Tax would be best applied on a wide international basis to include the major financial centres. This would prevent the danger of activities gravitating to jurisdictions where taxes are not levied on financial transactions with a likely loss of employment and tax revenue.  Notwithstanding this, the previous Government was not prepared to stand in the way of EU Member States that wished to work together to implement a Financial Transactions Tax and in this regard adoption of a decision formally authorising enhanced cooperation took place during the Irish Presidency of the European Union in January 2013.

The UK intention to commence the process of leaving the European Union increases the difficulties of introducing such a tax given the potential for the UK to compete more strongly using different domestic measures for such financial services activities outside the EU.

In any event despite significant engagement by the relevant Member States there has been no agreement on the introduction of an FTT and it is not clear whether agreement will be achieved in the near future.

Ireland already has a tax on financial transactions, a Stamp Duty on transfers of shares in Irish incorporated companies, which currently stands at 1%. The yield from this charge in 2015 was €424.13 million and I understand receipts to end September 2016 were over €287 million and is expected to raise up to €498m in 2016.  If Ireland was to participate in the FTT it would require us to abolish this Stamp Duty.

In relation to the question raised by the Deputy on the potential economic and employment impact of an FTT in Ireland I would refer to the joint Central Bank of Ireland/ESRI report published in April 2012 which considered the possible economic impact of the application of FTT ().  The report analyses the potential economic impact on the financial industry at that stage based on the Commission's 2011 FTT proposal.

While I appreciate that the study may be somewhat dated at this point the report's conclusions are a useful indicator of the possible impact of introducing an FTT in Ireland. Given that it is Government policy not to introduce an FTT, I do not consider it prudent to allocate resources to further studies or exercises in this regard at this time.

The joint Central Bank/ESRI report recognises that assessing the likely impact on employment and tax yields due to migration of activity is difficult. This continues to be the case as it is difficult to assess behaviour arising from the introduction of such a tax and second round impacts on investment and employment.

In 2012 the financial sector's share of overall economic output in Ireland was around twice as large as that of many other European countries and in 2016 it remains a significant element within the economy in terms of employment and gross value added. There is significant employment in the sector with around 35,000 individuals employed in international financial services.

The report sought to identify financial services sectors which could be impacted by an FTT.  It suggested that insurance, banking and financial intermediation, and fund management and security broking were potentially vulnerable to an FTT. Fund management in particular has been one of the growth areas of the financial services sector in Ireland with some large employers and with a total estimated 13,000 employed in the sector. 

The report concludes that the firms with the highest propensity to migrate following the introduction of an FTT are likely to be in the non-banking sectors which account for the smallest share of gross value added. Nevertheless, it indicates that the relocation of even a small number of large IFSC banks or fund administration firms would result in a loss of income tax revenue, corporation tax revenue, and an increase in unemployment. This would likely still be the impact now of introducing a FTT.

I remain of the view that there are potentially significant negative employment and economic impacts from introducing an FTT in Ireland and I have no plans to introduce such a tax.

Mick Barry (Cork North Central, Anti-Austerity Alliance)
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83. To ask the Minister for Finance the rationale behind the charging of VAT on the public service obligation item on utility bills; and if he will make a statement on the matter. [29067/16]

Michael Noonan (Limerick City, Fine Gael)
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With regard to the application of VAT on electricity bills supplied by utility companies, in accordance with section 37(1) of the Value-Added Tax Consolidation Act 2010, the amount on which VAT is chargeable is the total consideration receivable by the supplier, "including all taxes, commissions, costs and charges whatsoever", but not including the VAT itself.  This reflects EU VAT law, with which Irish tax law must comply.  In this regard, Article 78 of the EU VAT Directive provides that the taxable amount shall include "taxes, duties, levies and charges, excluding the VAT itself".

In this respect, where the charge for a supply of service, such as an electricity bill, includes the Public Service Obligation levy, VAT law dictates that VAT should be calculated on the PSO levy element of the charge as well as the charge for the service.  The same situation applies in the case of other excises, including for example excises on petrol, auto-diesel, tobacco and alcohol products.