Dáil Éireann debate -
Wednesday, 18 Nov 1998

Vol. 496 No. 7

Written Answers. - Deposit Interest Retention Tax.

Gay Mitchell

Question:

141 Mr. G. Mitchell asked the Minister for Finance if he will reduce the rate of DIRT for those who retired with lump sums and invested these in deposit accounts in order that they could live off the interest but who find themselves paying 20 per cent DIRT at a time when interest rates have fallen and are continuing to fall (details supplied). [24146/98]

Minister for Finance (Mr. McCreevy)

It is a general principle of taxation that as far as possible income from all sources should be subjected to taxation.

I have no plans to cut the rate of DIRT on interest income in the event of a fall in interest rates. However, any further cuts in the standard rate of income tax, now 24 per cent, will be reflected in the standard rate of DIRT. The rate of DIRT for special savings accounts is 20 per cent.

Regarding the situation of individuals who are aged 65 or over, they are at present entitled to a refund of DIRT if their total income, including interest income, is below their total tax free allowances or as the case may be their income tax exemption thresholds. Concessionary treatment is, therefore, already afforded to these individuals in the administration of DIRT where their incomes falls outside the tax net.