asked the Minister for Finance if it is proposed to review the equity of the taxation system in view of the heavy burden of income now contributed by PAYE tax payers; and if any attention has been given to increasing the proportion of taxation contributed by the farming community.
Ceisteanna—Questions. Oral Answers. - Income Tax System.
14.
The taxation system is reviewed in the normal course in preparing for the budget. The Government will be giving full consideration to all aspects of the matter in the coming months.
Is the Minister aware that there is a very deep-rooted sense of grievance on the part of PAYE earners vis-à-vis other sections of the population, notably the farmers, and a feeling that there is not a fair levying of taxation? Will the Minister agree that it is important at a very early stage to clear the decks in relation to his intentions in respect of the equity of the taxation system, especially in respect of the disproportion between the amount paid by PAYE earners and others?
As I have indicated, and as the Deputy is well aware, any changes proposed in the taxation system would be announced in the budget. The Deputy will also be aware that the changes made this year result in the payment of substantially more income tax by farmers than they were paying under the Government of which he was a member.
The Minister should tell that to the farmers.
Is the Minister aware that for the first nine months of this year income tax payers have paid an additional £79 million notwithstanding the relief given in the budget and that the proportional increase by farmers has been in the region of £3 million or £4 million?
The Deputy will be aware that even if there is a substantial increase in the receipts of income tax, for individual tax payers the tax reliefs were very substantially increased this year. The reasons for increased receipts of that kind are primarily due to substantially increased earnings and substantially greater numbers employed.
Would the Minister not agree that, even taking 1972 as the base year, such has been the advance in inflation that these allowances have not kept pace with it? Arising out of the main question and reply, the Minister must surely be aware that there is a close connection between the level of taxation on PAYE payers and their expectations in incomes in any particular year. If monetary unity comes about to the degree suggested so far, it is important that there be voluntary agreement on these matters next year. We are endangering the prospect of such voluntary agreement by continuing the present unfair taxation system. The Minister should not be afraid to grasp this nettle.
The Deputy should refrain from making long statements.
Perhaps the Minister would like to comment on that because it is a serious matter for next year.
On the first issue, I think the Deputy will agree that the first serious effort to catch up on inflation in recent years was made this year. Secondly, he will also find it indisputable that the taxation system as I found it when we came into office in 1977 was one dictated by a Government of which he was a member. I have made changes in that system and I am certainly not ruling out further changes.