asked the Minister for Finance the total amount collected in income tax for the first quarter of the current year and the percentage increase or decrease compared with the same period for the previous year.
Ceisteanna—Questions. Oral Answers. - Income Tax.
17.
The collection of income tax has been held up by the Post Office situation. Income tax payments into the Exchequer in the current year up to 31 March 1979 amounted to £160.125 million, a decrease of 1 per cent on the same period last year. The back-log in tax revenue will be recoverable when Post Office services return to normal.
Is it not the case that the Post Office dispute had relatively little effect on the collection of income tax in the first quarter of the year?
I cannot say how much effect but it had some effect on it.
Even accepting that the Post Office dispute had some effect on the collection of income tax in the first quarter of the year, how can the Minister explain the fact that income tax receipts have decreased in the first quarter by 1 per cent whereas the budgetary projections are for an annual increase of the order of over 30 per cent?
There are a number of factors involved in this matter. Up to 2 February 1979 the income tax receipts showed an increase of 17.3 per cent over the same period last year. One of the factors operating, which would be expected to operate in the first quarter, is that the very large increases in income tax allowances from the 1978 Budget were operating in the first quarter as compared with the corresponding quarter of the previous year when the income tax arrangements made under the Fine Gael/Labour Coalition were operating. So one would expect a substantial drop in the first quarter because of the very large increases granted in the 1978 Budget. There are also a number of other special factors which will not apply until after the first quarter of this year, such as the ending of the concessions given to civil servants on the changeover to PAYE, the application of PAYE to share fishermen and the discontinuance of tax relief on social insurance contributions.
Is it not clear that, despite all the qualifications, explanations and excuses advanced by the Minister, he is really experiencing what looks like a massive shortfall in the anticipated yield from income tax this year?
There is no basis for that statement.
Will the Minister give the House an assurance that, if there is a shortfall below the 36 per cent increase which he predicted, he will not make up for it by ordering the Central Bank to print more money?
If there were such an eventuality, and there is no indication of it at the moment, the Deputy can rest assured that the steps to be taken by the Government to deal with the situation will be carefully considered.
And will not include the one that I have outlined?
I do not know why the Deputy should pick on that one.
It is the most inflationary one that the Government could take.
It may be one which was tried by other Governments with which the Deputy would be more familiar.
Not to my knowledge.