asked the Minister for Finance in respect of the years 1979 to 1988, the amount by which the basic personal tax allowance has increased in nominal terms; the amount by which its real value has raised; if he will consider consolidating the personal, PAYE and PRSI allowances into a uniform personal allowance; and if he will make a statement on maintaining the value of allowances.
Ceisteanna — Questions. Oral Answers. - Tax Allowances.
15.
In the 1979-80 tax year, the basic personal allowance stood at £1,115 for a single person, £1,185 for a widowed person and £2,230 for a married couple. In the current tax year, the figures are £2,050, £2,550 and £4,100, respectively. These represent a fall of 18.6 per cent in real terms in the case of the single and married allowances and of 4.8 per cent in the case of the widowed person's allowance. If one takes account of the PAYE and PRSI allowance the single and widowed persons have seen an increase in real terms in their total allowances, and the allowances of a married couple with one spouse earning have fallen in real terms by less than 5 per cent.
I have no plans to incorporate the personal, PAYE and PRSI allowances into a uniform personal allowance. Apart from other considerations, as the Deputy will be aware, the PAYE and PRSI allowances do not at present apply to all taxpayers and to incorporate them into a uniform allowance would, therefore, involve a substantial cost.
As regards the final part of the Deputy's question, I should point out that maintaining the value of allowances in real terms is not the only way of alleviating the income tax burden. In the recent budget, for example, I announced an increase of £250 for a single or widowed person, and £500 for a married couple, in the general exemption limits, with increases also in the age exemption limits; the introduction of a child addition of £200 per child in conjunction with the exemption limits; a reduction in the standard rate of income tax from 35 per cent to 32 per cent — the first reduction in the standard rate for over 20 years — and in the top rate of tax from 58 per cent to 56 per cent; and extensions of the 48 per cent band by £200 for a single or widowed person and £400 for a married couple, and of the standard rate band by £400 for a single or widowed person and £800 for a married couple. These reliefs, which are estimated to cost over £200 million in the 1989-90 tax years, will be of benefit to all taxpayers and represent a substantial alleviation of the income tax burden.
Will the Minister tell the House what he believes the basic personal income tax allowance actually represents now? What sum of money is it supposed to theoretically correspond to?
The Deputy can calculate it; I gave him the amount.
I know what the amount is but what is that figure supposed to mean anymore?
What does it mean to the Deputy?
It means the amount of money one can earn without any liability to tax in any circumstances.
It means that to me, also.
I am suggesting that in those circumstances the Government must have some policy as to whether they want to increase the absolute amount of such an allowance or decrease it. In the circumstances, merely to point to the PAYE and PRSI allowances fails to do justice to those who do not avail of those allowances and do not have them available to them.
Let us proceed by way of supplementary question, rather than by argument.
My position and that of the Government is extremely clear on this. We are moving in various ways to reduce the burden on the taxpayers.
Various different directions.
I have listed out exactly the way we are going. If Deputy McDowell is concentrating totally on the personal allowance as the only way of doing it, I do not agree with him. I have already said that when you take the PAYE and PRSI allowances into account, they have done very well——
Some people do not get those.
——not as well as I would like them to have, but I shall continue to improve the position as we go down the road.
Some people do not get those allowances.
What would the Deputy suggest — that they should be taken out altogether?
One uniform allowance.
I told the Deputy exactly the position. I cannot do that.
This question is merely leading to argument. I am calling the next question.
(Limerick East): The Minister has referred to the fact that the personal allowance does not apply to all taxpayers. Has the Minister any information which would give the cost of extending the PAYE allowance to Schedule D taxpayers?
I do not have that information at the moment.
(Limerick East): Will the Minister get it for me?
I shall send it on to the Deputy. At least, the Deputy is not like Deputy McDowell. The Progressive Democrats did not believe in their own tax document. They were going to abolish personal allowances. They did not believe in anything at all. The Deputy is asking the opposite question to what is in his own party's document.
I call Question No. 16.
(Limerick East): Do not drag me into the contention with Deputy McDowell.
(Interruption.)
To reduce the burden of tax is exactly what I am doing in this year's budget. Deputy McDowell has a suggestion in his own tax document about which he must have forgotten, otherwise he would not be asking that type of question.
I have called the next question.
I am asking the Minister if he agrees with me, but he will not say.
The Progressive Democrats ignored the personal allowance in their own tax document.
I call Question No. 16 in the name of Deputy Wyse. Please let us have a response.