Brendan Griffin (Kerry, Fine Gael)
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181. To ask the Minister for Finance if he will consider reinstating the home renovation incentive; and if he will make a statement on the matter. [37022/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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I do not currently have plans to reinstate the Home Renovation Incentive.

The Home Renovation Incentive (HRI) provided tax relief by way of an income tax credit on repair, renovation or improvement works on principal private residences or rental properties carried out by tax compliant contractors. It was introduced in 2014 at a time when there was considerable loss of employment within the construction sector, with the aim of addressing this market failure by stimulating increased activity in the sector.

The incentive expired on 31 December 2018 following a review of the scheme. The review found that in the context of the current housing supply shortage, and the need at that time to deliver 25,000 additional housing units per annum over the period 2017-2021, there was a risk that the scheme could lead to increased competition for scarce resources within the construction sector, leading to upward pressure on construction costs and house prices. The review concluded that the continuation of the scheme could give rise to displacement of labour from work on new builds to work on home renovations and would create a high opportunity cost of labour which was not present at the inception of the scheme.

Also, in 2019, in the context of the Tax Strategy Group (TSG) deliberations, my department examined the concept of a tax incentive along the lines of the HRI for domestic retrofit projects. The relevant TSG paper was published with the Budget 2020 documentation. It indicated that there could be a duplication of supports with the direct Sustainable Energy Authority of Ireland (SEAI) grant system already in place and that a scheme such as this could conflict with the need to increase overall housing supply.

The paper observed that:

- in terms of current direct expenditure measures in the energy efficiency sector, the Government continues to make grants available to householders who wish to improve the energy efficiency of their home through the SEAI’s Better Energy Homes (BEH) and Deep retrofit Grant programme;

- research undertaken by the ESRI into householder preferences regarding retrofit subsidy schemes found that households strongly prefer cash payment subsidies (i.e. up-front discounts or cash back post works) versus other indirect methods of financial support such as tax credits); and

- from an equity perspective, tax expenditure measures can be regressive by nature, given that only those who pay taxes qualify, and those with greatest income benefit the most. As such, a tax incentive measure as proposed may be of little benefit to certain groups who are most likely to suffer from energy poverty, for example the elderly or those on limited incomes.

More generally, proposals for tax expenditure measures are assessed in accordance with my Department's Tax Expenditure Guidelines. These make clear that it is important that any policy proposal which involves tax expenditures should only occur in limited circumstances where there are demonstrable market failures. In particular, they provide that a tax-based incentive should only be considered where it would be more efficient than a direct expenditure intervention.

Emer Higgins (Dublin Mid West, Fine Gael)
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182. To ask the Minister for Finance if his Department or the Revenue Commissioners that will draft the eligibility criteria for the business resumption support scheme; the section of his Department or the Revenue Commissioners that will be responsible for drafting the eligibility criteria; and if he will make a statement on the matter. [37043/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Business Resumption Support Scheme is a new scheme for vulnerable but viable businesses, particularly in sectors that were significantly impacted throughout the pandemic, even during periods when restrictions were eased. The BRSS and its eligibility criteria are provided for in section 5 of the Finance (Covid-19 and Miscellaneous Provisions) Bill 2021 currently before the Oireachtas.

The main eligibility criterion is contained in subsection (3)(b)(i) which provides that claimants must demonstrate that, during the specified period, the turnover of the relevant business activity, of the claimant, was an amount that is 25 per cent (or less) of the reference turnover amount, as defined.

Subsection (4) provides for several additional conditions of the scheme:

(4)(a) A person must register on the ROS system for the scheme and provide all items of information as required by the Revenue Commissioners at the registration stage as specified in Subsection (10).

(4)(b) In making a claim, a person must submit an electronic claim on the ROS system. A person must provide all items of information as required by the Revenue Commissioners at the claim stage as specified in Subsection (10).

(4)(c) Claimants must make a declaration on ROS that they satisfy all required conditions of the scheme and that they are a qualifying person.

(4)(d) A person must be in compliance with all Value Added Tax obligations that may apply to it, including registration and furnishing of returns.

(4)(e) A person must be eligible for tax clearance, in accordance with section 1095 of the Taxes Consolidation Act 1997, for the duration of the application period.

(4)(f) That a person, at the commencement of the application period, is in the course of carrying on the relevant business activity and intends to continue to do so. A relevant business activity is regarded as being carried on where supplies of goods or services are actually being made to customers.

(4)(g) That a person is not entitled to make a claim under Section 485 of the Taxes Consolidation Act 1997 for support under the Covid Restrictions Support Scheme (“CRSS”) in respect of any week that includes 1 September 2021.

Eligibility for the scheme is not restricted by location, rate paying or physical premises. In addition, certain charities and approved bodies which were not eligible for CRSS will be eligible for the BRSS in accordance with subsection (2).