Ivor Callely
Ceist:93 Mr. Callely asked the Minister for Finance if he will support a policy of a reduction in the higher and lower rate of income tax in the 1997 budget; and if he will make a statement on the matter. [17972/96]
Written Answers. - Income Tax Rates.
The Government's policy in relation to taxation is set out in the programme A Government of Renewal. The programme stresses the need to reform the tax system, in particular to relieve the tax and PRSI burden on those with low incomes and especially those with families. Tax reform will favour the incentive to work, tackle the poverty trap, aim to reduce the tax wedge and encourage enterprise development.
The significant improvements made over the last two budgets have been achieved through measures aimed primarily towards reducing the average tax take rather than cutting tax rates. These measures included increasing personal allowances and exemption limits, widening the standard band and introducing the £80 per week PRSI-free allowance. Clearly further progress is needed in reducing the tax and PRSI burden, thereby improving the competitiveness of the economy. There are, of course, different views as to the form further reductions in taxation should take, and the groups towards whom relief should be targeted. The Deputy can be assured that all relevant income tax reduction options will be examined in the run-up to next year's budget.