I move Financial Resolution No. 8.
(1) THAT in this Resolution "contribution year" means a year of assessment within the meaning of the Income Tax Acts.
(2) THAT the provisions of section 16 (as amended by the Finance Act, 1984 (No. 9 of 1984) of the Finance Act, 1983 (No. 15 of 1983), shall apply and have effect for the contribution year 1993-94, as they applied and had effect for the contribution year 1984-85, as if—
(a) the following paragraph were substituted for paragraph (b) (inserted by the Finance Act, 1984) of subsection (2):
(b) the Youth Employment Levy Regulations, 1982 (S.I. No. 84 of 1982), the Youth Employment Levy (Amendment) Regulations, 1983 (S.I. No. 52 of 1983), the Employment and Training Levy (Amendment) Regulations, 1988 (S.I. No. 53 of 1988), and the Employment and Training Levy (Amendment) Regulations, 1989 (S.I. No. 69 of 1989) (referred to in this subsection as the Regulations'),",
(b) the following paragraph were inserted after paragraph (i) of subsection (2):
"(ia) in section 16 of the Act, paragraphs (c) and (d) shall be deleted and the following paragraph shall be substituted for paragraph (a):
‘(a) where in a contribution year a payment is made to or for the benefit of the employed contributor in respect of reckonable earnings of that employed contributor, levy shall be payable by the employed contributor at the rate of one per cent. of the amount of the reckonable earnings to which such payment relates:
Provided that levy payable pursuant to this section shall not be payable by an employed contributor who, by virtue of section 45 of the Act of 1970, has full eligibility for services under Part IV of that Act.'",
(c) in paragraph (v) (inserted by the Finance Act, 1984) of subsection (2), "the year 1993-94" were substituted for "the year 1983-84 or the year 1984-85", and
(d) in the proviso (inserted by the Finance Act, 1984), "£173" and "£9,000" were substituted for "£96" and "£5,000", respectively, and "1993-94" were substituted for "1984-85" in both places where it occurs.
(3) IT is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).
This resolution anticipates legislation which will be contained in the Finance Bill to impose for the year 1993 to 1994 a temporary levy of 1 per cent on all income, on a similar basis to the existing health, employment and training levies. Effect will be given to the levy by way of re-activating and modifying the legislation relating to the income levy which was enforced in the period 1983 to 1986. Accordingly, the income levy as modified will be payable at a rate of 1 per cent by all individuals over 16 years of age but with a specific income exemption in order to protect the lower paid. In the case of the self-employed exemption will apply where income for the year is not greater than £9,000. In the case of employees the levy will not be payable in any week where income is not greater than £173.
In addition all medical card holders, including those whose income is more than £9,000 per annum, will be exempt from the levy. All social welfare payments will also be exempt from the new levy and such payments will not be taken into account in determining whether an individual qualifies for an income exemption from the levy.
Unlike existing levies, and the income levy which applied in the early 1980s, employers will not be liable to pay the new levy in respect of their employees who are medical card holders. The levy will be imposed on all income as estimated on the income tax under the Income Tax Acts, subject to allowable deductions in respect of approved superannuation contributions and, in the case of self-employed individuals, capital allowances. The income levy will be collected, like the employment and training levy, the health contribution levy and PRSI, by the Revenue Commissioner under the combined PAYE-PRSI collection system, and from the self-employed and farmers under the self-assessment system. It will be paid directly by the Revenue Commissioners to the Exchequer. It is expected that the yield from the levy will be £78 million in 1993. It is a contribution from those at work to help support those who are not at work. This type of levy was introduced in 1983 and was brought in at much lower exemption limits. It started at approximately £3,000 at that time. We have been careful to ensure that those at the bottom of the income scale are exempt in so far as is possible.
