I am informed by the Revenue Commissioners that the disparity between CSO and Revenue figures for personal income is more apparent than real. The two sets of figures are not prepared on the same basis.
In the first place, the figures mentioned are not directly comparable on the basis of time because the Revenue figure is for gross income arising in the tax year 1994-95 and the CSO figure relates to the calendar year 1995. The CSO figure of £29,000 million for total personal income earned in 1994 is a more appropriate figure for comparison with the Revenue figure of £17,334 million.
The CSO figure must then be adjusted for comparability to exclude amounts which are either tax exempt or represent income concepts which are not income for tax purposes. The main exclusions are in respect of current transfer payments, which are either not taxable or fall below tax exemption limits, national debt interest paid to residents, mainly payable to institutions, imputed rental income accruing to houseowners, not income for tax purposes untaxed unemployment benefit and disability benefit, because of higher tax thresholds in individual cases, investment income of pension funds and life funds etc. excluding national debt interest, tax exempt, and employers PRSI, not income for tax purposes. These adjustments reduce the CSO figure to £21,000 million.
The Revenue figure of £17,334 million represents 90 per cent of the self-employed and 98 per cent of the PAYE expected totals. Adjusting for full coverage brings the estimated total to £18,100 million. This figure must then be adjusted for comparability by the subtraction of amounts for capital allowances and losses which are already recognised in the CSO figure, and by the addition of quantifiable amounts which are not in the Revenue figure, such as employee contributions to pension funds tax deductible, employer contributions to pension funds, not income for tax purposes, interest income that does not need to be declared or is not recorded, but from which tax has been deducted, and unemployment benefit and disability benefit not recorded, but from which tax has been deducted. Together they bring the comparable Revenue figure to £19,200 million.