Dáil Éireann Debate, Tuesday - 14 December 2004
152 Mr. Connaughton asked the Minister for Finance if he has proposals to relax the tax on soft drinks in public houses; if his attention has been drawn to the fact that a pint of water is now 50% more expensive than a pint of stout (details supplied) in a public house; and if he will make a statement on the matter. [33388/04]
View answerIn so far as there is a difference between the price of soft drinks and alcoholic beverages in public houses, the margin referred to by the Deputy is not due to taxation. Soft drinks, fruit juices and bottled water are subject to VAT at the standard rate of 21%. This VAT rate is also applicable to alcoholic beverages. However, alcoholic beverages are also subject to excise duties which amount to approximately 47 cent for a pint of stout. Therefore, tax is not the main determinant of price with regard to these products. I have no plans to reduce to the current VAT rate applicable to soft drinks, fruit juices and bottled water.
153 Ms Shortall asked the Minister for Finance the social welfare payments which are taxable; and if he will make a statement on the matter. [33538/04]
View answerSubject to the exemptions and partial exemptions outlined, the social welfare payments listed are taxable. It should be noted that where a social welfare payment is taxable, the extent, if any, to which taxation will actually arise in any given case will depend on the level of other income a recipient and his or her spouse, where applicable, have in the same tax year. If there is no other income in addition to the social welfare payment, the existing personal tax credits and exemption limits can generally be expected to ensure that there is no tax to be paid on the social welfare income.
Taxable Social Welfare Payments
—Old age pension (contributory)
—Old age pension (non-contributory)
—Retirement pension
—Widow's-widower's pension (contributory)
—Widow's-widower's pension (non-contributory)
—Blind person's pension
—Orphan's allowance (contributory)
—Orphan's pension (non-contributory)
—Disablement benefit (taxable only if payable in the form of periodic payments and not taxable if paid as a once off gratuity)
—One-parent family payment
—Disability benefit
—Interim disability benefit
—(Occupational) injury benefit
—Carer's allowance
—Carer's benefit
—Unemployment benefit
—Invalidity pension
—Disablement pension
—Unemployability supplement (payable with disablement pension)
—Constant attendance allowance (payable with disablement pension)
Notes on exemptions and partial exemptions:
The special tax exemption in relation to unemployment benefit payable to systematic short time workers was extended in the recent budget to 31 December 2006. The child dependant amounts which are payable with most of the payments set out are also taxable with the exception of the child dependant amounts payable with unemployment benefit, disability benefit, interim disability benefit and occupational injury benefit, that is, the child dependant amounts payable with these four benefits are exempt from tax. As regards unemployment benefit, the first €13 per week is exempt from tax. The first six weeks of disability benefit, occupational injury benefit and interim disability benefit in any tax year are exempt from tax.
154 Ms Shortall asked the Minister for Finance the breakdown and total of tax credits and total income tax bill that will apply in 2005 to employees in respect of persons (details supplied), without reference to PRSI, health levies or any tax credits other than single, married and employee credits. [33539/04]
View answerThe position as regards the three scenarios mentioned by the Deputy is as follows. In the case of a single person earning €24,000, the individual will be entitled to the single person's tax credit of €1,580 and the employee tax credit of €1,270, giving total tax credits of €2,850. The total income tax bill for 2005 will be €1,950.
In the case of a married couple with one income earning €40,000 the couple will be entitled to the married person's tax credit of €3,160 and one employee tax credit €1,270 in respect of the working spouse, giving total tax credits of €4,430. The total income tax bill for 2005 will be €3,922.
In the case of a married couple with two incomes, one €40,000 and one €15,000, the couple will be entitled to the married person's tax credit of €3,160 and two employee credits totalling €2,540, that is, €1,270 by two, giving total tax credits of €5,700. The total income tax bill for 2005 will be €5,652. It is assumed in this case that the spouses are jointly assessed for tax. The calculations as regards the three scenarios are as follows.
|
Taxable income |
€24,000 |
|
Tax due |
€24,000 @ 20% = €4,800 |
|
Less tax credits:— |
|
|
Single person’s tax credit |
€1,580 |
|
Employee credit |
€1,270 |
|
Total of tax credits |
€2,850 |
|
Total income tax bill |
€1,950 |
|
Taxable income |
€40,000 |
|
Tax due |
€38,400 @ 20% = €7,680 |
|
€1,600 @ 42% = €672 |
|
|
€8,352 |
|
|
Less tax credits:— |
|
|
Married person’s tax credit |
€3,160 |
|
Employee credit |
€1,270 |
|
Total of tax credits |
€4,430 |
|
Total income tax bill |
€3,922 |
|
Taxable income |
€55,000 |
|
Tax due |
€53,400 @ 20% = €10,680 (See Note) |
|
€1,600 @ 42% = €672 |
|
|
€11,352 |
|
|
Less tax credits:— |
|
|
Married person’s tax credit |
€3,160 |
|
Employee credit X 2 |
€2,540 |
|
Total of tax credits |
€5,700 |
|
Total income tax bill |
€5,652 |
Note: Where both spouses are working, the first €38,400 of taxable income is chargeable to tax @ 20% and this €38,400 may be increased by the lesser of €20,400 or the amount of the taxable income of the spouse with the smaller income. In scenario 3, the 20% rate band of €38,400 is extended to cover the other spouse’s income of €15,000 giving €53,400 (€38,400 + €15,000) taxable only at 20%.
