Vol. 476 No. 6
25 Miss Quill asked the Minister for Finance the estimated number of people who pay 48 per cent tax on earnings at or below the average industrial wage; and if he will make a statement on the Government's intentions in relation to such taxpayers. [7698/97]
28 Miss Harney asked the Minister for Finance the estimated number of people who pay 48 per cent tax on earnings at or below the average industrial wage; and if he will make a statement on the Government's intentions in relation to such taxpayers. [7696/97]
I propose to take Questions Nos. 25 and 28 together.
I am informed by the Revenue Commissioners that, based on an estimated average industrial wage in 1997 of around £15,000 and following the enactment of the changes announced in this year's budget, the number of taxpayers in question is forecast to be of the order of 32,200 in respect of the 1997-98 tax year. Such taxpayers are being assessed for tax as single or widowed persons.
This figure represents a considerable reduction of close to 23 per cent in the number of taxpayers in the 1996-97 tax year estimated to be paying the top rate at earnings not exceeding the estimated 1996 average industrial wage. The reduction is due to the significant increase in the income thresholds for the top rate of tax arising from the increase in personal allowances and widening of the standard band which I introduced in the budget.
The Government's policy in relation to taxation is set out in the Programme for Renewal. The Programme stresses the need to reform the tax system, in particular to relieve the tax and PRSI burden on those with low incomes. Tax reform will favour the incentive to work, tackle the poverty trap, aim to reduce the tax wedge and encourage enterprise development.
The Deputy will be aware that Partnership 2000 states that "The Government will introduce personal tax reductions to the cumulative value over the three years of £900 million on a full year cost basis." The first steps towards implementing this undertaking were taken in this year's budget which as stated above will considerably reduce the number of taxpayers on incomes below the average industrial wage paying tax at the top rate. It is Government policy to increase further personal allowances and the standard band in future budgets thereby continuing the process of increasing the income thresholds for the top rate of tax for all taxpayers.
