Thursday, 22 November 2018

Questions (54, 55, 64)

Pearse Doherty

Question:

54. Deputy Pearse Doherty asked the Minister for Finance the estimated cost of indexing the standard rate cut-off point for each of the next five years; and the cumulative cost. [48715/18]

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Pearse Doherty

Question:

55. Deputy Pearse Doherty asked the Minister for Finance the cost of indexing all tax bands and credits for each of the next five years with a breakdown of all elements; and the cumulative cost in relation to same. [48716/18]

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Michael McGrath

Question:

64. Deputy Michael McGrath asked the Minister for Finance the estimated full year cost of increasing the standard tax band to €50,000 for a single person and increasing the standard tax band to €100,000 for a couple, respectively; and if he will make a statement on the matter. [48809/18]

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Written answers (Question to Finance)

I propose to take Questions Nos. 54, 55 and 64 together.

I am advised by Revenue that the estimated full year cost of increasing the standard rate cut off point for all income tax bands by €14,700 which would bring it to €50,000 for a single person and €100,000 for a couple in a single year, would be approximately €2.3 billion.

This estimated figure has been generated by reference to projected 2019 incomes, calculated on the basis of actual data for the year 2016, the latest year for which returns are available, and adjusted for income, self-employment and employment trends in the interim. The estimate is provisional and may be revised.

In relation to the questions from Deputy Doherty about indexation, it is not clear at what rate the Deputy is suggesting the credit should be indexed.

However, I would draw attention to the information available in the Post-Budget 2019 Ready Reckoner, which is available on the Revenue Statistics webpage at: https://www.revenue.ie/en/corporate/information-about-revenue/statistics/ready-reckoner/index.aspx

This Ready Reckoner presents a range of forecasting information, including, on page 10, a table showing the estimated cost to the Exchequer of a 1% indexation of credits, rate bands and exemption limits for Income Tax and the Universal Social Charge.

Revenue does not forecast future inflation rates and is, therefore, not in a position to provide a cost estimate beyond 2019.