Trevor Sargent
Question:132 Mr. Sargent asked the Minister for Finance the annual additional cost to the Exchequer of making tax credits refundable; and if he will make a statement on the matter. [15917/99]
Written Answers. - Tax Credits.
In my last budget I announced a major step towards a full tax credit system, namely, the standard rating of the basic personal and PAYE allowances. While it is my intention that my future budgets will complete the changeover to tax credits, they are not yet fully incorporated into our income tax system. I am informed by the Revenue Commissioners that if the allowances which were standard rated in the 1999 budget were converted to tax credits the cost to the Exchequer in a full year of refunding the unabsorbed portion of such tax credits to individuals on the income tax record would be of the order of £759 million in respect of the basic allowances for married, single and widowed persons and £165 million in respect of the PAYE allowance. The Exchequer cost would be significantly greater if the concept of refundable tax credits was extended to all individuals who are not on tax records.