asked the Minister for Finance if he will confirm that income tax collected under the composite rate arrangement provided for in section 31 of the Corporation Tax Act, 1976, from building societies, is listed in the Exchequer returns under Schedule D income tax; if so, if this gives an inflated impression of the proportion of income tax actually paid by farmers and the self-employed; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Income Tax Returns.
10.
No breakdown of income tax is given in the Exchequer returns. It is normal to categorise income tax receipts by reference to collection mechanisms and, in particular, to distinguish between PAYE, schedule D and schedule C.
Building society tax receipts, under the composite rate tax arrangement, are based on interest paid or credited by building societies to their depositors. The arrangement provides that the provisions of the Income Tax Acts concerning the collection and recovery of that tax shall apply as if the tax was payable under, or charged by, an assessment to income tax under schedule D and it is accordingly collected under the schedule D mechanism. The amounts of tax received from the societies relate to interest paid or credited by them to all depositors — (individuals, companies, charities, trustees and other persons.
Figures of tax receipts given in respect of farmers and other self-employed do not include building society tax receipts. As an indication of this, might I refer the Deputy to a reply I gave to a Parliamentary Question from Deputy Bell on 20 February last — Official Report, Vol. 363, No. 15, col. 3405-6.
The Minister appears to be in competition with the Taoiseach in regard to speed — he wants to break the record. It is rather difficult to keep up with the Minister. Basically the question relates to tax statistics. The Minister will agree that in 1985 the composite building society rate yielded £65 million. However because this was recorded under Schedule D, although much of that £65 million came from PAYE taxpayers, it will be recorded under tax from the self-employed and farmers. With the new deposit interest tax we may expect these figures to increase. Would the Minister not agree that consequently the tax statistics will be distorted further? They were distorted already under section 31 of the Corporation Tax Act but will be distorted further if this new tax is recorded under Schedule D.
My information is not to that effect. I understand that a clear distinction is made in the figures between the receipts from farmers and self employed on the one hand and all of the Schedule D receipts on the other hand and that the problem outlined by the Deputy does not occur. The figure for farmers and self employed is true.
Can the Minister confirm that the tax statistics will show the deposit interest retention tax and possibly other taxes, such as the section 31 tax, separately from the tax on farmers and self employed?
My understanding is that that will be the case.