Vol. 430 No. 4
93 Mr. Cox asked the Minister for Finance the estimated revenue to the Exchequer arising from each additional 1 per cent tax placed on special savings accounts between the current base rate of 10 per cent and the standard rate of income tax.
Unfortunately, neither my Department nor the Revenue Commissioners have the necessary statistics to make the estimates sought by the Deputy. Once the special saving accounts have been in operation for sufficient time we would hope to have more information on which to base an estimate. Of course, in arriving at this estimate, it would be necessary to take into consideration not only what funds are in special saving accounts made also what assumptions should be made about money moving our of the country about these assumptions would clearly have to change as the rate of tax on special savings accounts approached the standard rate of income tax.
94 Mr. Cox asked the Minister for Finance the impact, if any, the existence of special savings accounts had in stemming capital outflows from the State during the recent currency crisis.
The Deputy will be aware that the period of disturbance in financial markets lasted from mid-September 1992 to the end of January 1993, and that special savings accounts have only been available since the beginning of this year. While it is clear that a significant number of special savings accounts have been opened, the Central Bank has informed me that, as yet, precise statistics for investment in these accounts are not available. While a better after-tax return on deposits has a positive impact on capital flows, other factors such as market sentiment also affect the flow of funds in and out of the State. It will not be possible to quantify separately the precise influence of each of these factors on capital flows during January 1993, even when full statistics become available on deposits in special savings accounts.
