Niall Collins (Limerick County, Fianna Fail)
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327. To ask the Minister for Finance the estimated cost to the Exchequer of a suggested measure (details supplied). [28708/17]

Niall Collins (Limerick County, Fianna Fail)
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333. To ask the Minister for Finance the cost to the Exchequer of a measure (details supplied), in tabular form. [28735/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 327 and 333 together.

The cost to the Exchequer of an income tax, USC and/or PRSI relief on interest earned from the supply of crowdfunding finance to SMEs would depend on a number of factors, including the marginal USC rate and the PRSI Class of the individual investors concerned; the level of investment; the level of return received on the investment (i.e. the interest rate received); and the level of uptake of the relief. As such it is not possible to estimate an overall Exchequer cost for the measure proposed by the Deputy.

Should the Deputy wish to estimate a cost for such a measure using projections for uptake and return, the Exchequer cost per €10,000 of interest received of allowing an exemption from USC, PRSI and income tax at the standard rate (assuming that the individual’s total income is such that the interest income received would be subject to income tax and that PRSI at Class K or Class S would apply), would be as follows:

Deputy Collins will be aware that Crowdfunding is not currently a regulated activity in Ireland and, in June 2014, the Central Bank of Ireland issued an information notice that alerts consumers to this fact and highlights specific risks that potential investors should be aware of. There is no dedicated harmonised regulation for crowdfunding in the European Union and the existing European financial services legislation was not designed with crowdfunding in mind.

A number of EU Member States have either implemented domestic regulation for crowdfunding or are in the process of considering introducing regulation and my Department and the SME State Bodies Group are considering how to facilitate the development of crowdfunding in Ireland for the benefit of the economy while also ensuring adequate protection for small investors and consumers. As part of this process a public consultation was held in May/June seeking the views of interested parties on whether a regulatory regime would be appropriate for the crowdfunding sector, or if such a regime (or limited regime) with its inherent obligations and costs would be an impediment to the development of crowdfunding in Ireland.