asked the Minister for Finance the approximate saving to the Exchequer that would arise in 1988-89 from the implementation of each of the following recommendations from the Commission on Taxation: (a) charging social welfare benefits to income tax; (b) taxing compensation payments for loss of office; (c) taxing lump sum retirement sums; (d) taxing redundancy payments lump sums; (e) taxing that portion of compensation for damages that is áttributable to loss of potential future income; (f) taxing the earnings of artists; (g) taxing payments to artists under Aosdana; (h) taxing gambling winnings; (i) abolishing medical insurance relief; (j) abolishing the health expenses relief; (k) abolishing the deduction for premiums under the Voluntary Health Insurance scheme; (l) abolishing the additional deduction for Schedule E taxpayers and bringing Schedule D tax-payers onto a current year basis of assessment; (m) taxing all interest bearing deposits (including Government securities) to the extent that the rate of interest exceeds the rate of inflation; (n) removing income tax relief in respect of life insurance premiums; (o) taxing all fringe benefits on the basis of the market value of the property services or facilities furnished by the employer along the lines of each of the proposals made in Chapter 12, with details of the saving in each case; (p) treating emigration as a deemed realisation of assets for capital gains tax purposes; (q) abolishing the exemption for small gains for capital gains tax purposes; (r) all Government and other securities to be chargeable assets for capital gains tax purposes; (s) the exemption of the principal place of residence for capital gains tax purposes to be withdrawn; (t) widowed persons with no dependent children to be charged with tax as if they were unmarried; (u) age allowance to be abolished; and (v) dependent relative's allowance to be abolished.
Written Answers. - Exchequer Saving.
The information requested is shown, in so far as it is available, in the following table for the most recent years for which it is available.
The fact that an estimate of the tax cost has been provided should not be taken as indicating that the measure concerned is administratively feasible.
Approximate saving to the Exchequer
Commission's Recommendations |
Latest year for which information is available |
Saving£ million |
(a)charging social welfare benefits to income tax (1) |
1987-88 (p) |
76.0 |
(b)taxing compensation payments for loss of office |
1987-88 (P) |
5.0 |
(c)taxing lump sum retirement sums |
1987-88 (P) |
49.2 |
(d)taxing redundancy payments lump sums |
1987-88 (P) |
10.0 |
(e)taxing that portion of compensation for damages that is attributable to loss of potential future income |
not available |
not available |
(f)taxing the earnings of artists |
1988-89 (P) |
0.9 |
(g)taxing payments to artists under Aosdana |
not available |
not available |
(h)taxing gambling winnings |
not available |
not available |
(i)abolishing medical insurance relief (permanent health benefit) (2) |
1987-88 (P) |
0.5 |
(j)abolishing the health expenses relief |
1987 |
2.4 |
(k)abolishing the deduction for premiums under the voluntary Health Insurance scheme |
1988-89 (P) |
48.0 |
(l)abolishing the additional deduction for Schedule E taxpayers and bringing Schedule D taxpayers onto a current year basis of assessment |
not available |
not available |
(m) taxing all interest bearing deposits (including Government securities) to the extent that the rate of interest exceeds the rate of inflation (3) |
1988-89 (P) |
85.0 (loss) |
(n)removing income tax relief in respect of life insurance premiums |
1988-89 (P) |
44.0 |
(o)taxing all fringe benefits on the basis of the market value of the property, services or facilities furnished by the employer along the lines of each of the proposals made in Chapter 12 (4) |
not available |
not available |
(p)treating emigration as a deemed realisation of assets for capital gains tax purposes |
not available |
not available |
(q)abolishing the exemption for small gains for capital gains tax purposes |
1986-87 (P) |
3.0 |
(r)all Government and other securities to be chargeable assets for capital gains tax purposes |
1985-86 |
Insignificant |
(s)the exemption of the principal place of residence for capital gains tax purposes to be withdrawn |
1985-86 |
2.0 |
(t)widowed persons with no dependent children to be charged with tax as if they were unmarried |
1987-88 (P) |
5.9 |
(u)age allowance to be abolished |
1988-89 (P) |
6.6 |
(v)dependent relatives allowance to be abolished |
1988-89 (P) |
1.7 |
Figures marked (P) are provisional and are subject to revision.
Notes to Table
1. Includes disability, unemployment, occupational injuries benefits and maternity allowance.
2. In view of (k) it is assumed that this heading relates to permanent health benefit schemes.
3. This is an estimate of revenue loss. The estimate covers the loss associated with the taxation of deposit interest only. There would be other losses the extent of which cannot be quantified in the time available for answering this question.
4. Fringe benefits to a great extent already come within the charge to tax. The market values of many of these benefits could not be determined from tax records without undue expenditure of staff resources in compiling the figures. However, Revenue records indicate that the yield under existing legislation in 1986-87 from the main fringe benefit — use of an employer-provided car — was of the order of £31 million.
General Note
The estimates given are on the basis that the application of tax:
(a) would not have altered activity in the affected areas;
(b) in one area would not have affected receipts in other areas; and
(c) would not have resulted in other costs to the Exchequer.
All of these simplifying assumptions are unlikely to be correct. The figures given cannot, therefore, validly be summed and do not give an accurate indication of the amount of tax which might be raised in the future were any of the areas in question to become liable to tax.