asked the Minister for Finance the estimated annual tax loss to the Exchequer in (a) income tax (b) indirect taxes (c) employer PRSI contributions (d) employee PRSI contributions arising from redundancies under the Redundancy Payments Acts for the years 1980 to date; and the estimated total cost to the Exchequer each year of tax relief on lump sums paid in the case of redundancies covered by the Redundancy Payments Acts for the years 1980 to date.
Written Answers. - Exchequer Tax Losses.
53.
Changes in direct tax revenue and in revenue from pay-related social insurance from year to year consequent on changes in the level and composition of employment are a function of individual earnings before redundancy, the incidence of re-employment and the duration of unemployment. Since statistics are not available which would enable the information requested by the Deputy to be compiled, it is not possible to indicate the loss in these areas in respect of the years in question.
Information on the loss of indirect tax revenue arising in respect of persons who were made redundant is also unavailable; there would of course have been some offsetting indirect taxation revenue generated by the expenditure by the persons who were made redundant of redundancy payments received by them.
Following are the figures of the estimated cost to the Exchequer in terms of tax foregone of the exemption of statutory redundancy payments:
|
Year |
Estimated Cost to Exchequer |
|
£m |
|
|
1980 |
2.0 |
|
1981 |
3.0 |
|
1982 |
5.5 |
|
1983 |
8.1 |
|
1984 |
11.3 |
|
1985 |
10.4 |
|
1986 |
10.0 |
|
1987 |
10.0 |
|
1988 |
11.3 |
The figures for each year are compiled on the assumptions (i) that the exemption from tax would have been immediately and fully withdrawn, (ii) that there would have been no change in the rest of the income tax code and (iii) that there would have been no consequent change in the behaviour of taxpayers who stood to benefit from the relief.