I should point out that it is standard practice for the Minister for Finance to review all taxation policy in the run-up to the annual budget. It is also a long-standing practice of the Minister for Finance not to comment, in advance of the budget, on any tax matters that could be the subject of budget decisions. With regard to budgetary matters, when focusing on the primary objectives of reducing the deficit and returning sustainability to the public finances, it has been of vital importance to the Government to spread the burden of the adjustments made in as fair and equitable a manner as possible, while also seeking to minimise their negative impact on economic growth.
To respond to some of the more specific points made by the Deputy, as I have stated many times in the House, the programme for Government states that as part of the Government's fiscal strategy we will maintain the current rates of income tax, together with bands and credits, and not increase the top marginal tax rates. To do so would negatively influence individual decisions to work and harm our competitiveness. It should be acknowledged that Ireland has one of the most progressive tax systems in the world, ensuring that those on higher incomes pay proportionately higher rates of tax on their income than those on lower incomes. In addition, it should be noted that the Government has no current plans to introduce a wealth tax.
As the Deputy is aware, in budget 2014, I introduced a stamp duty levy on certain financial institutions. The levy is 35% of the DIRT paid by the relevant financial institutions in 2011. It will operate for a period of three years, from 2014 to 2016. The expected yield is €150 million per annum.
The high earner's restriction for individuals on high incomes who make significant use of certain specified tax reliefs was introduced in budget 2006 and came into effect from 1 January 2007.
Additional information not given on the floor of the House
The restriction works by limiting the total amount of specified reliefs that a high income individual can use to reduce his or her tax liability in any one tax year. Prior to the introduction of this restriction, such individuals, by means of the cumulative use of various tax incentive reliefs, had been able to reduce their tax liability to very low levels or to zero. The programme for Government included a commitment to ensure a minimum effective tax rate of 30% for very high earners. The changes already made in budget 2010 ensure that this is achieved.
Furthermore, I assure the Deputy that the need to balance the competitiveness of our corporation tax offering for mobile foreign direct investment while ensuring the maximum benefits to the State is a matter that is considered by the Department and others on an on-going basis. The importance of maintaining the standard 12.5% rate of corporation tax to Ireland's international competitive position in the current climate must be borne in mind. Ireland, like other smaller member states, is geographically and historically a peripheral country in Europe. A competitive corporate tax rate is a tool to address the economic limitations that come with being a peripheral country, as compared to larger core countries. Ireland's corporation tax rate plays an important role in attracting foreign direct investment to Ireland and thereby increasing employment here.
As to how successful we are at getting this balance right, I highlight to the Deputy that the revenue generated by corporation tax in Ireland is broadly in line with the EU average. In 2013 we collected just over €4.2 billion, which is 11.3% of overall Exchequer tax revenue and equivalent to 2.6% of gross domestic product. As I stated previously, the 12.5% rate is settled policy and the Government remains fully committed to this rate.