Dáil Éireann Debate, Wednesday - 14 July 2021
79. Deputy Claire Kerrane asked the Minister for Finance the estimated full year yield in 2022 that would be raised by tapering out the personal, employee and earned income tax credits by 4% per €2,000 on individual incomes between €120,000 and €180,000 by year resulting in no entitlements to those with credit in cases in which individual income is excess of €180,000; and if he will make a statement on the matter. [38186/21]
View answerThe personal, employee and earned income tax credits are currently €1,650. On the basis of a straight line 4% reduction per €2,000 on incomes over €120,000, it would appear that the credits taper out completely by €170,000, with zero credits applying on incomes greater than €170,000.
I am advised by Revenue that the first and full year yield of such a change is estimated to be of the order of €155m and €185m respectively.
I am further advised that these estimates are based on tax returns for 2018 (the latest available year) and that, in analysing the gross incomes of taxpayer units at individual level, a range of assumptions were necessarily made in relation to the distribution of credits (in units). As such, were such a change implemented, it may lead to outcomes different to the above estimates.
