asked the Minister for Finance whether he is aware that great hardship is experienced by many workers due to the present method of collecting income-tax, and whether he will consider introducing the pay-as-you-earn system in order to avoid demands for tax being made on workers in the lower income groups for which they have been unable to make provision.
Ceisteanna—Questions. Oral Answers. - Collection of Income-tax.
The answer to both parts of the question is in the negative. Where a wage-earner omits to make payment of his income-tax when it becomes due, the usual course is for the Revenue Commissioners to require his employer, under the provisions of Section 6 of the Finance Act, 1923, to deduct the tax in instalments from his earnings and to pay it over to them. In arranging the instalments the Commissioners have due regard to the circumstances of the taxpayer and every care is taken to avoid causing undue hardship.
Is the Parliamentary Secretary aware that the decision indicated by his answer means that hardship on the lower income group taxpayers will continue and that a lesser amount would accrue to the revenue? Has the second consideration been put before the Minister?
I am not satisfied that either of the Deputy's supplementary questions is correct. The Deputy is no doubt aware that the pay-as-you-earn system has been described as a perfect example of a perfect tax that has become a perfect nuisance; that it did not result in increased revenue to the Exchequer and that, in fact, its operation was found to be more costly and is more costly even where there is a far larger number of taxpayers than here.
Is the Parliamentary Secretary further aware that the vast majority of weekly wage-earners would infinitely prefer the pay-as-you-earn system to that which operates at the present time?
There is no evidence available which suggests that that is so. The system has been criticised in Great Britain where it has been in operation since 1943 or 1944. In Great Britain there are approximately 9,000,000 individual taxpayers, while here there are approximately 120,000 employees who pay income-tax and 43,000 of the 120,000 already pay it by deductions at the source—in the case of employees of the State by deductions from salary, and certain other undertakings also. About 5,000 additional persons have arranged to have the deduction made at source.