Dáil Éireann Debate, Tuesday - 27 July 2021
345. Deputy Ged Nash asked the Minister for Finance the estimated yield from removing the PAYE and earned income tax credits, which reduce final income tax liabilities, from taxpayers with incomes above €100,000 per year; and if he will make a statement on the matter. [39899/21]
View answerI am advised by Revenue that the removal of the Employee Tax Credit and Earned Income Tax Credit for individuals with an income above €100,000, in the manner outlined by the Deputy, would yield an estimated €152m and €186m on a first and full year basis, respectively.
These estimates are based on tax returns for 2018 (the latest available year) and, 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 such units). As such, were such a change implemented, it may lead to outcomes which vary from the above estimates.
I would also note that the removal of tax credits in a manner as set out by the Deputy could have broader implications, such as resulting in disincentives to work. For example, the removal of the tax credit for a taxpayer on an income of €101,000 would result in a lower after tax pay for that taxpayer compared to a taxpayer on an income of €100,000.
