Dáil Éireann díospóireacht -
Wednesday, 17 Apr 1991

Vol. 407 No. 1

Written Answers. - Tax Liability.

John V. Farrelly

Ceist:

128 Mr. Farrelly asked the Minister for Finance the reason tax is being deducted at the rate of 52 per cent from a person (details supplied) in County Meath in view of the fact that he is an old age pensioner; and if he will make a statement on the matter.

Minister for Finance (Mr. A. Reynolds)

I have been advised by the Revenue Commissioners that the taxpayer applied for income tax exemption on 31 March, 1990. He did not qualify for exemption but was entitled to marginal relief. For the current income tax year 1991-92 the taxpayer again qualified for marginal relief and a certificate to this effect issued to him on 4 March 1991.

Marginal relief operates to ensure that the tax payable in respect of the tax-payer's total income is no more than 52 per cent of the excess of his total income over the exemption limit. In every case in which it applies, it is more favourable to the taxpayer than taxation under the normal system of applying the standard rate to his taxable income, i.e. income less personal allowances and reliefs: this is because, although the rate of tax is higher, the amount of income to which it applies is considerably less.