asked the Minister for Finance the steps he proposes to take to ensure that hardship is avoided for individual taxpayers in the implementation of his decision to extend the PAYE system to the public service.
Ceisteanna—Questions. Oral Answers. - PAYE System Extension.
10.
The question raised by the Deputy is under consideration and has been the subject of discussion with staff representatives.
Could the Minister indicate what he has in mind?
I have already arranged to have a further meeting with staff representatives. I am at present awaiting the arrangement of a date by them. In due course I will advise the House of the arrangements which have been made. In the meantime, I do not think it would be appropriate for me, having had these meetings with the staff representatives, to make any public comment on the matter.
Could the Minister say, first, when this extension of the PAYE system will occur; and, secondly, whether he has indicated in his discussions with the staff associations, the kind of steps he has in mind to alleviate hardship as indicated in this question?
It is proposed that the transfer to the PAYE system will operate as far as the Public Service is concerned from 6th April, 1976. I cannot accept that hardship arises if by hardship is meant, as must be meant, severe pain or loss, injustice or oppression. What is proposed is that those in the public sector will pay in respect of any income received by them an amount of tax equivalent to that which has to be paid by people on the same income who are not employed in the public sector.
Can we take it from what the Minister has said that he would not regard it as a hardship on an individual taxpayer to be obliged, because of the changeover in the system, to pay an increased income tax of 100 or even up to 200 per cent in the one year in the case of a person who already has very substantial commitments by way of mortgage and otherwise? Can we take it the Minister would not regard such as a hardship?
The extent to which PAYE would increase tax liabilities of public servants is a measure of the advantage which they have had over other PAYE payers until now. It must also be remembered that if an increased tax liability arises next year, then the largest part of that increase will arise because of increases in income received in the meanwhile.
Are we to take it the Minister is now repudiating the statement he made in this House on 26th June last when he was asked for and gave a categoric assurance to the effect that no person involved would find himself in the same year paying income tax on his previous year's earnings and PAYE on his current year's earnings?
That assurance is correct, no person will be asked to pay tax for any period other than a year.
The Minister gave a categoric assurance in the House that no taxpayer concerned would be asked, in the same year, to pay both income tax on his previous year's earnings and PAYE on his current year's earnings.
We have had that question.
What I am asking is, is the Minister adhering to that undertaking or is he repudiating it? It is not clear from his answer.
The Minister is adhering to it.
So there will be no hardships involved?
No hardship will be involved, but may I say that the choice of the word "hardship" may, of course, reflect attempts by people to generate ill-feeling? In so far as any element of tax is a burden, I think it is desirable—and this is the Government's objective—to achieve equity in the system of taxation so that people in comparable positions pay an equivalent amount of tax.
That is a different point.
Could I ask the Minister to indicate how he proposes introducing a system whereby he is going to tax people on money which they earned last year and on money which they are earning this year without asking them to pay on both? Surely if he is introducing this he must indicate to us——
The Deputy is making a suggestion which is not Government policy.
The Minister is saying, on the one hand, he is going to do it and, on the other hand, that he will not.
I said there will be a year's tax paid in a year under the PAYE system.