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Pensions Levy Issues

Dáil Éireann Debate, Tuesday - 11 June 2013

Tuesday, 11 June 2013

Questions (211)

Thomas P. Broughan

Question:

211. Deputy Thomas P. Broughan asked the Minister for Finance the position regarding the pension fund levy; the amounts raised in 2011 and 2012 for the Exchequer from the imposition of the levy; his views on whether the funding in question could have been obtained by a different public policy choice; and if he will make a statement on the matter. [27943/13]

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Written answers

The pension fund levy applies at a rate of 0.6% per annum to the market value, on the valuation date, of assets under management in pension funds and pension plans approved under Irish tax legislation. The levy will operate for a period of 4 years only (2011 to 2014) and the legislative provisions giving effect to the levy (section 4 of Finance (No 2) Act 2011) were specifically drafted to reflect this. I confirmed in my Budget 2013 Speech that the levy will not be renewed after 2014.

I am informed by the Revenue Commissioners that receipts to date from the levy amounted to €463 million in 2011 and €483 million in 2012. This is broadly in line with the amounts anticipated to be collected in those years.

The moneys raised from the pension fund levy are being used to pay for the Government’s Jobs Initiative introduced in May 2011. The measures introduced as part of the Jobs Initiative include a new 9% VAT rate on certain activities, the halving of the lower rate of PRSI and small amounts of additional current and capital expenditure.

As I explained in my speech introducing the “Jobs Initiative” in May 2011, the decision to fund the Initiative by way of a levy on pension funds over the 4 year period was taken because the alternatives for increases in taxation elsewhere at this time would be more damaging to the economy.

The implementation of a jobs and growth strategy is a key priority of the Government. The measures announced in the Jobs Initiative are aimed at assisting in employment generation – providing opportunities for those who are out of work, to restore public morale and confidence in the economy and encourage spending by consumers.

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