Dáil Éireann Debate, Tuesday - 23 March 2004
49 Mr. Howlin asked the Minister for Finance when he intends to implement the commitment given in An Agreed Programme for Government to remove all those on the national minimum wage from the tax net; and if he will make a statement on the matter. [8928/04]
View answerThe position is that the statutory minimum wage is an average hourly rate of gross pay for an employee as defined under the National Minimum Wage Act 2000. The wage currently stands at €7 per hour having been increased on 1 February 2004 from the previous amount of €6.35 per hour. The annualised equivalent of the present minimum wage is €14,196. The provisions in budget 2004 and the Finance Bill 2004 ensure that for a single person in the PAYE sector, he or she will not pay tax on any income of €246 per week or under, equivalent to €12,800 per year.
An Agreed Programme for Government, states that, "over the next five years our priorities .... will be .... to achieve a position where all those on the minimum wage are removed from the tax net". The five year period mentioned commenced two years ago when the Government was elected to office. It should also be noted that the commitment to exempt the minimum wage from tax is given in the context of a broader economic and budgetary strategy which provides, among other things, that the public finances will be kept in a healthy condition and that personal and business taxes will be kept down to strengthen and maintain the competitive position of the Irish economy.
The Deputy will also be aware of the commitment contained in Sustaining Progress which states that, "to the extent that there is any scope for personal tax reductions, progress will continue to be made over the three budgets contained within the lifetime of this Agreement towards removing those on the minimum wage from the tax net". Progress on this taxation commitment is subject to the need to pursue responsible fiscal policies and to maintain the public finances in a healthy condition.
Accordingly, exemption from tax of those on the minimum wage will be a matter for consideration in the context of the annual budgets over the next few years, consistent with the Government's overall economic and budgetary strategy and its commitments as outlined.
