asked the Minister for Finance why the Revenue Commissioners deduct income tax payable by postmen in any year by twenty-four weekly deductions in that year instead of by fifty-two weekly deductions spread over the whole year; and if, having regard to the hardship caused by the present system, steps will be taken to introduce without delay a more equitable system for postmen similar to the PAYE system.
Ceisteanna—Questions. Oral Answers. - Postmen's Income Tax Deductions.
13.
Postmen are remunerated by the Department of Posts and Telegraphs; and tax is deducted from their emoluments by that Department in accordance with the usual system of tax deductions in operation for those paid by Government Departments.
In accordance with this system, provisional deductions are normally made from the beginning of each tax year, that is, from April, pending the making of formal assessments in the following September and October. When the assessments are made, the rate of tax deduction for the rest of the year is adjusted so that the correct amount will be recovered by the end of the year.
The provisional deductions are based on the amount of tax charged in the preceding year so that, in a case where no tax was charged in the preceding year, provisional deductions would not be made unless there was a request to that effect by the employee concerned. When assessments for the current year, 1965-66, were being made last month, it became known that, because of increases in wages since 1964, some employees who had not been chargeable in previous years were now liable for tax; and the tax due had to be recovered in the remaining months of the year since there had been no provisional deductions in the earlier part of the year. Discussions are, however, taking place between the Revenue Commissioners and the Department of Posts and Telegraphs with a view to ensuring that this difficulty will not arise in future and that deductions in such cases will be made over the whole year.
Having regard to the serious hardship at present being imposed on some postmen with very low wages who are having something up to one-sixth of their current wages deducted for income tax, will the Minister take steps to see that these deductions are spread over the remainder of the financial year?
The payment of income tax is a difficulty for every sector of the community. As indicated in my reply, it is admitted that there were some difficulties involved in these cases, which will be obviated following the discussions now taking place.
Some of them are losing £2 10s. a week.
Would the Minister state why there is so much difficulty in assessing income tax for the lower-paid people in State employment? Deductions are being made and PAYE is not applied to them until the end of the financial year.
The tax deductions are based on the preceding year and where people were not assessable in the preceding year, difficulties arise. These are the kind of difficulties we are trying to obviate in the negotiations now taking place.
Does the Minister not agree that in the case of new entrants, it should be possible to make the tax deductions weekly as they are made in outside employment?
If there is any difficulty in the case of new employment, I will ask the Revenue Commissioners to look into it as well.
I will call Question No. 15 now for the sake of convenience and then revert to Question No. 14.