asked the Minister for Finance the 1988 cost to the Exchequer of the relief provided for self-employed persons to make annual provision for their retirement pensions.
Ceisteanna — Questions. Oral Answers. - Cost to Exchequer of Retirement Pensions.
6.
Statistics on which to base a reliable estimate of the cost to the Exchequer of the tax relief provided for retirement annuity premiums are not available in respect of the 1988-89 tax year. The relief is tentatively estimated to involve a cost of the order of £20 million in terms of tax foregone in the current tax year.
Would the Minister agree that in the present arrangement, which brings self-employed people somewhat into line with other classes of the community in relation to making provision for their pensions, certain problems arise? Would he agree that the limit of 15 per cent of earnings varies upwards and downwards quite substantially each year in the case of many self-employed people? In that context has he any plans to rationalise this process and to provide a system which would guarantee a basic contribution, irrespective of the level of earnings, at any given time? In this context does the report of the National Pensions Board influence his thinking?
The Deputy has raised some very important points. I do not have any particular view on the outcome of any examination. I know that it has been recommended by the National Pensions Board, in their report on tax treatment of occupational pensions, that the 15 per cent limit be increased. The limit in the UK at present is 17.5 per cent. As I have said in reply to another question — I hate repeating myself — you have to look at the cost to the Exchequer. In 1980-81 it was £10 million and in 1985-86 it was £16.3 million. One has to wait and see what one can afford, after taking a good clear look at the overall budgetary arithmetic. Then, and only then, can you begin to do a limited amount of things that are asked of you that cost money or impinge in some way on the Exchequer.