Vol. 495 No. 4
209 Mr. Perry asked the Minister for Finance his views on whether it is a good time to remove DIRT entirely in view of the fact interest rates are declining prior to entry to EMU and in view of recent evidence of widespread evasion of DIRT in order to encourage personal saving in a low interest environment and help people on lower incomes manage their budgets. [20292/98]
It is a general principle of taxation that as far as possible income from all sources should be subjected to taxation. Deposit interest retention tax, DIRT, is levied at either 20 per cent or 24 per cent. The 20 per cent rate applies to special savings accounts, SSAs. DIRT is the collection mechanism by which tax is withheld at source on deposit interest and in all cases is a final liability tax on such interest income. The yield from DIRT net of refunds, was £150 million in 1997 and as such is an important source of Exchequer revenue. I have no plans to cut the rate of DIRT on interest income in the event of a fall in interest rates. Naturally any further cuts in the standard rate of income tax, now 24 per cent, will be reflected in a cut in the standard rate of DIRT.
