Patrick O'Donovan
Question:190. Deputy Patrick O'Donovan asked the Minister for Finance the cost of indexing tax credits and bands to wages in the period 2017 to 2021; and if he will make a statement on the matter. [39454/15]
View answerTuesday, 10 November 2015
Questions (190)
Written answers
I am advised by the Revenue Commissioners that the Post-Budget 2016 Ready Reckoner available on the Revenue Statistics webpage at http://www.revenue.ie/en/about/statistics/ready-reckoner.pdf shows a wide range of information, including an indicative cost of indexation at 1% in respect of various bands, rates, credits, exemption limits and the Universal Social Charge. The 1% indexation estimates, on page 9 of the Reckoner, may be used on a pro-rata or straight-line basis to cost other levels of indexation.
I am further advised by the Commissioners that Revenue has no basis to predict the level of wage inflation over the period 2017 to 2021, and therefore is not in a position to cost a related indexation of tax credits and bands.
The relevant costs included in the Ready Reckoner are based on 2016 estimates from the Revenue tax forecasting model using actual data for the year 2013, adjusted as necessary for income, self-employment and employment trends in the interim. They are provisional and may be revised.