Brian O'Shea
Question:214 Mr. O'Shea asked the Minister for Finance the proposals, if any, he has to reduce the income tax rate (details supplied); and if he will make a statement on the matter. [6187/99]
Written Answers. - Tax Code.
The Government is committed to reducing the burden of personal taxation in order to reward effort and to improve incentives to work. In my budget speech last December I stated that "I intend to deliver over the five budgets of this Government the tax proposals as agreed by Fianna Fáil and the Progressive Democrats."
In my first budget, I concentrated on providing relief to all taxpayers through a package which concentrated particularly on cuts in both the standard and higher rates. In this year's budget, I introduced a major reform of the tax system which aimed to remove as many people as possible from the tax net and to maximise the incentive to work. This involved standard rating the basic personal and PAYE allowances, and increasing these allowances significantly. The standard rated personal allowance was increased by £1,050 single, £2,100 married to £4,200 single, £8,400 married. The standard rated PAYE allowance was increased by £200 to £1,000. These changes represented the first step in a move to a full tax credits system. The budget 1999 package focuses resources on the lower paid. The result of these changes will be to ensure that a single person on PAYE will not pay tax on any income below £100 per week. Because of the significant cost of this reform, it was not possible in this year's budget to further reduce the rates of income tax, but this will be addressed in future budgets.