asked the Minister for Finance the proposals he has to reduce the increasing burden of taxation on the PAYE sector.
Ceisteanna — Questions. Oral Answers. - Taxation on PAYE Sector.
34.
In the national plan, Building on Reality 1985-87; the Government undertook that, over the period of the plan, tax bands and allowances would be adjusted each year so that the overall income tax burden would not increase. This policy was put into effect in the 1985 budget. In my 1986 budget details will be provided of the specific tax measures to be implemented to fulfil this commitment.
In view of the Government's commitment on coming into office in their policy document to control and reduce the level of taxation, particularly in regard to the PAYE sector, will the Minister acknowledge that another such statement in Building on Reality is of no reassurance? Is the Minister aware that the level of contribution from the PAYE sector increased in the last four years from £1,200 million to just short of £2,000 million and that the average tax paid by the PAYE sector has more than doubled in the last few years to £2,500 each? How can the Minister, in the light of the commitments given on coming to office, measured against the increase in PAYE, now suggest that the PAYE sector can be reassured by a further commitment which, if judged by previous commitments, does not mean anything and will mean quite the opposite as far as they are concerned?
I have no difficulty in giving reassurance on the matter in relation to 1986, particularly in view of the fact that in 1985 we did exactly what we said we were going to do in the plan.
Will the Minister acknowledge that what we have seen since he came to office was an increase from the PAYE sector from £1,200 million to £2,000 million, an increase of 66 per cent?
The Deputy is now giving information and, notwithstanding the fact that we are dealing with Priority Questions, he should not do that.
In view of the extent of the increases that have taken place since the Minister took office will he acknowledge that he needs to take drastic remedial action to relieve the PAYE sector and, in particular, to restore the incentive to work which has been killed as a consequence of the tax policies he has promoted?
Deputy O'Kennedy is indulging in his old habit of confusing tax base with tax returns with tax rates and I do not intend to follow him off down that blind avenue since we have already discussed the matter on many occasions in the House. We have set out in the plan our commitments to adjusting tax bands and allowances each year in order to prevent the tax burden from rising any further. We have further said that any new tax resources will be devoted in the first instance to relieving the burden on personal income tax payers. We carried that commitment into effect in a positive way in 1985 and we will do the same thing in 1986.
In view of the fact that OECD figures show beyond any doubt that the level of our income tax is the highest within the OECD area, will the Minister acknowledge that for a variety of reasons, such as equity and economic regeneration, it is past time for words and, as the Commission on Taxation said, it is time for action? Will the Minister undertake to take action to ensure that this most crushing problem is dealt with immediately?
OECD figures do not show anything like what the Deputy alleges.
The Minister should check them.
They do not show anything like that. We had a discussion in the House on this during the debate on the Finance Bill and I told the Deputy how mistaken his figures were. For him to be suggesting that I should take action on the basis of the erroneous impression he has from an incomplete reading of the works——
The Minister should read the last OECD report.
——he mentioned is wrong. With regard to the second point raised by the Deputy I should like to repeat that we have set out the course of action we are taking on taxation and we are giving effect to that.