I propose to take Questions Nos. 219 and 220 together.
The estimated costs of indexation of various rate bands and tax credits are available in Revenue’s Ready Reckoner, available at www.revenue.ie/en/corporate/documents/statistics/ready-reckoner.pdf. For the convenience of the Deputy, the estimated cost of indexation at 1% is outlined in the table below.
Cost of Indexation at 1%
|
First Year € million
|
Full Year € million
|
Personal Tax Credits with rate bands
|
121
|
139
|
Exemption limits, Personal Tax Credits with rate bands
|
127
|
146
|
PAYE Credit, Exemption limits, Personal Tax Credits with rate bands
|
157
|
180
|
Earned Income Credit
|
2
|
3
|
USC rate bands and exemption limits
|
20
|
24
|
The cost of indexation at various levels can be extrapolated from the above on a straight line basis, however it should be noted that these costings assume no behavioural change.
These estimates are outputs from Revenue’s micro-simulation model and provide the estimated cost of applying the changes in 2022. While it is possible to estimate a cost associated with indexation of the items outlined, it is not possible within Revenue’s model to only apply these changes to taxpayers meeting certain criteria, such as an income threshold.