Gerald Nash
Question:49. Deputy Ged Nash asked the Minister for Finance if he plans to carry out a full review on the levy imposed on private occupational pensions; and if he will make a statement on the matter. [3661/22]
View answerWednesday, 26 January 2022
Questions (49)
Written answers
The pension fund levy was introduced in 2011 in the wake of the financial crash and at a time when the economy was in serious difficulties, with all sectors contributing to the recovery plan. In this context, the levy was designed to claw back a small amount of the very significant tax relief that those contributing to pension arrangements had benefitted from over many years. It was time-bound in duration, ceasing in 2016.
Under the accompanying legislation, the payment of the levy was treated as a necessary expense of a pension scheme and the trustees or insurer, as appropriate, were entitled to adjust current or prospective benefits payable. It should also be noted that the performance of private pension funds is primarily a commercial matter and is contingent on market circumstances and other external factors.
The levy went to fund the tax reductions and expenditure measures introduced in the Jobs Initiative, including lowering the VAT rate for the tourism sector to 9%. The levy was successful and did its job as reflected in the increased activity and ensuing employment in that sector. The value of the funds raised by way of the levies have been used to protect and create jobs and this in turn has helped to support the improving financial and economic position of the State.
Taxpayers who may have ultimately borne the impact of the levy will have since benefited from tax reductions in the last number of Budgets, including the substantial income tax package as part of Budget 2021. Accordingly, it is within context that I can confirm that there are no plans to carry out a review of the levy.