Vol. 519 No. 5
47 Proinsias De Rossa asked the Minister for Finance if he will make a statement on his speech to the Institute of Taxation on 25 February 2000; if it is intended to proceed with the original individualisation proposals outlined in the budget. [14269/00]
In my address to the Institute of Taxation, I outlined the main elements of the substantial programme for tax reductions and reform announced in Budget 2000, which are the personal taxation measures, the amendment and extension of pension fund provisions and the changes in capital acquisitions tax.
On the establishment of a single standard rate band for each individual taxpayer, I explained that this was part of the Government's strategy to reduce the number of taxpayers on the higher rate of tax to 20% as promised in the Government's Action Plan for the Millennium. I stated that this objective could only be realised by widening the standard rate band and that the best way of achieving this was by restructuring the standard rate band so that persons are taxed on what they earn as individuals, whether single or married. The measures in Budget 2000 will ensure that the number of taxpayers on the top rate will fall by 125,000 in the 2000-1 tax year, from what it otherwise would have been. The new system will also rectify the imbalance in the tax system against most taxpayers who are single or two earner families.
The Deputy will be aware that section 1.1.4 of the Programme for Prosperity and Fairness states that:
The Social Partners support the policy of establishing a single standard rate income tax band for all individual taxpayers. They also agree that the standard rate income tax band should be kept under review in the light of increases in income levels and the objective of ensuring that, over time, at least 80% of taxpayers are not subject to the higher rate of income tax.
It is the Government's intention to proceed with the policy of establishing a single standard rate band, to secure these objectives which I have outlined.
