Dáil Éireann Debate, Thursday - 14 July 2022
304. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue that would be raised to end-December 2022 by tapering personal, PAYE and Earned Income tax credits at a rate of 2.5% per €1,000 for individual incomes between €100,000 and €140,000, effective from 27 September 2022. [39468/22]
View answerI am advised by Revenue that as their modelling tool is built to model scenarios on a taxpayer unit basis (i.e. including jointly assessed couples as taxpayer units), it is not possible to estimate changes to tax credits on an individual basis for a projected tax year.
However, incomes recorded on historic tax returns can be used to estimate the potential yield and/or cost associated with the adjustment of tax credits. As 2019 is the latest year for which full tax return data is currently available to be analysed, Revenue completed an analysis based on the 2019 tax year.
Applying the tapering out of the Personal Tax Credits, the Employee Tax Credit and the Earned Income Tax Credit for individuals with an income above €100,000, in the manner outlined by the Deputy in relation to 2019 would have yielded an estimated €270m and €325m on a first and full year basis respectively.
As the income data used for the analysis relates to total annualised incomes, it is not possible to estimate a yield from the tapering of credits on a quarterly basis.
I am also advised by Revenue that it would not be possible to implement such a proposal with effect from 27 September 2022.
