asked the Minister for Finance if he will clarify the position of those assessed for income tax under PAYE following the introduction of the decimal system in 1970-71: and whether tax free allowances will be reduced in these circumstances.
Ceisteanna—Questions. Oral Answers. - Income Taxation.
46.
Mr. Dunne
The introduction of the decimal system will not affect the tax position of those within the scope of PAYE other than that the tax deductions will be made in pounds and new pence instead of in pounds, shillings and pence as at present. The current rate of income tax is 7s in the £ which would represent 35 new pence in the £ under the decimal system.
Tax is at present deducted under PAYE at the rate of 5s 3d in the £. This, of course, is not a statutory rate but is adopted so as to provide for the granting of earned income relief (of one-fourth) in respect of the taxable income.
The exact equivalent of 5s 3d in decimal currency would be 26¼ new pence and, as Deputies are aware, the lowest denomination coin will be one new half-penny. However, the rate is used for calculation purposes only and ready reckoners, expressed in decimal currency, have been prepared for use by employers in deducting tax. Tax will be deducted in sums of pounds and new pence. Calculation of the cumulative tax to date will be to the nearest five new pence below.
Tax-free allowances will not be reduced on the introduction of the decimal system. At present, the weekly tax-free allowances are shown to the nearest 1s above in the case of computer-produced PAYE documents and to the nearest 5s above in respect of manually produced documents. Both of these amounts convert exactly into decimal currency, that is, to the nearest five pence and 25 new pence respectively.
47.
Dr. Browne
andDr. O'Connell asked the Minister for Finance the perextent to which income tax has increased between the years 1959-60 and 1969-70; and the extent to which in the same period it has increased on wages and salaries.
48.
Dr. Browne
andDr. O'Connell asked the Minister for Finance the percentage change in the total sums collected in income tax from wages and salaries between the years 1959-60 and 1969-70; and whether it is a fact that receipts from surtax have shown the lowest tax increase of all in the years 1959-60 and 1969-70.
I propose, with your permission, a Cheann Comhairle, to take Questions Nos. 47 and 48 together and, as the reply contains a tabular statement, to have it circulated with the Official Report. Following is the information requested:
|
1959-60 |
1969-70 (estimated) |
Increase Col. (2) over Col. (1) |
|
|
(1) |
(2) |
(3) |
|
|
£m. |
£m. |
% |
|
|
Income Tax: |
|||
|
Total net receipt |
22.34 |
90.0 |
303 |
|
Schedule E tax (tax on salaries wages and pensions) |
7.6 |
57.0 |
650 |
|
Surtax |
|||
|
Total net receipt |
1.93 |
3.75 |
94 |
The lower percentage increase in the net receipt of surtax as compared with income tax is attributable in the main to the introduction of an allowance in respect of earned income which was granted to surtax payers for 1967-68 and subsequent years of assessment.
The receipts from surtax show the lowest increase of all. Could the Minister give me a short answer to that?
I would be reluctant to give the Deputy a short answer.
Perhaps the Minister would give a short explanation. The lowest increase in all has been in relation to surtax? Is that so or is it not?
Yes. The reason is that children's allowances were introduced.