Dáil Éireann debate -
Wednesday, 14 Mar 1990

Vol. 397 No. 1

Written Answers. - Tax Refunds.

Seán Ryan

Question:

17 Mr. Ryan asked the Minister for Finance the amount of DIRT tax refunds to elderly persons in 1989; if he has any plans for exempting elderly persons from the imposition of this tax on small savings in 1990; and if he will make a statement on the matter.

Michael Moynihan

Question:

42 Mr. Moynihan asked the Minister for Finance, in view of the fact that the vast majority of old age pensioners, invalidity pensioners and widows in receipt of social welfare allowances are exempt from income tax, if he will arrange with the banks and building societies that no deductions from any interest earned by such persons would be made under the DIRT tax.

Minister for Finance (Mr. A. Reynolds)

I propose to take Questions Nos. 17 and 42 together.

I am informed by the Revenue Commissioners that the available statistics on refunds of deposit interest retention tax do not distinguish between refunds made to approved charities, those made to individuals aged 65 or over and those made to incapacitated individuals. The total value of such refunds made in 1989 was £4.1 million; the vast bulk of this is likely to have been repaid to individuals aged 65 years or over.

The Finance Act, 1986, provides for payment, after the end of the tax year, of deposit interest retention tax deducted from incapacitated persons and persons aged 65 years or over to the extent that they would not otherwise be liable to tax on the relevant interest. I have no plans at present for any changes in the existing legal provisions.

I would point out, however, that there is a number of investment options to which retention tax does not apply: credit union interest, and the interest and bonus on the small savers schemes operated by An Post — savings bonds, savings certificates and national instalment savings. In addition, the retention tax rate, which is the same as the standard rate of income tax, was 35 per cent when the tax was introduced, but is 32 per cent now and will be reduced to 30 per cent for the 1990-91 tax year. The Deputies will be aware that the Government are committed to further reducing the standard rate, and thus the retention tax rate, to 25 per cent by 1993.