Tuesday, 11 March 2014

Questions (80, 81)

Joe Higgins

Question:

80. Deputy Joe Higgins asked the Minister for Finance the number of PAYE workers that would not directly benefit from a raising of the level at which the top rate of income tax is raised. [11683/14]

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Joe Higgins

Question:

81. Deputy Joe Higgins asked the Minister for Finance the number of PAYE workers that would benefit from the raising of the level at which they pay income tax at the top rate by €1,000 per annum, €2,000 per annum, €3,000 per annum, €4,000 per annum and €5,000 per annum; and the amount such a reduction in income tax at each of these levels would cost the Exchequer. [11684/14]

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Written answers (Question to Finance)

I propose to take Questions Nos. 80 and 81 together.

I assume that the Deputy refers to an extension of the standard rate income tax band, which would apply similarly to single and widowed persons, as well as to single person child carers. The proposed extension to the standard rate band is assumed to also apply to married couples and civil partnerships. On this basis, I am informed by the Revenue Commissioners that the full year cost to the Exchequer, estimated by reference to 2014 incomes, of increasing the standard rate tax band to the PAYE sector by €1,000, €2,000, €3,000, €4,000 and €5,000, while also maintaining the current monetary differences between the single persons standard rate band and the various other classes of tax bands, is as follows:  

Proposed Increase

Estimated Cost - €m

€1,000

140

€2,000

290

€3,000

430                    

€4,000

580

€5,000

720

 It should be noted that the actual cost for each €1,000 increase may differ from the estimates above as it would be very much dependant on the numbers of taxpayers who are positioned in the income brackets where band increases would take effect and these can vary. With each of the proposed increases, the taxpayers affected are those currently paying income tax at the higher rate, of which there are 352,300 in the PAYE sector.

There are approximately 780,300 PAYE taxpayers in employment who are exempt from income tax and 840,200 PAYE taxpayers paying at the standard rate only. These taxpayers would not be impacted by raising the level at which the top rate of income tax is applied.

These figures are estimates for 2014, using the latest actual data for the year 2011 adjusted as necessary for income and employment trends in the interim. They are provisional and may be revised. A married couple or civil partners who have elected or have been deemed to have elected for joint assessment are counted as one tax unit.