Pat Cox
Question:163 Mr. Cox asked the Minister for Finance the cost in gross and net terms to index income taxation for all bands and allowances from 6 April 1994 to 31 December 1994, and in a full year.
Written Answers. - Cost of Indexing Income Tax.
The only relevant information available as to cost is in relation to the direct cost to the Exchequer in income tax foregone if the changes referred to in the question were enacted for the income tax year 1994-95.
The cost of introducing indexation of the basic income tax structure would depend upon the indicator used and how it was applied. As an indication of the potential cost, it is estimated that indexing the personal allowances, the exemption limits, the PAYE and PRSI allowances and the standard tax rate band at 1 per cent would cost an estimated £15 million in 1994 and £24 million in a full year.
Other income tax reliefs and allowances are available as incentives or for expenditure incurred and would not be appropriate for indexation.