Ivor Callely
Ceist:61 Mr. Callely asked the Minister for Finance his views on DIRT and withholding tax; the submissions, if any, he has received to abolish these taxes; and if he will make a statement on the matter. [4078/97]
Written Answers. - Abolition of Taxes.
DIRT is necessary to collect the taxation due on deposit interest income. Deposit interest is normally subject to a retention tax at the standard rate of 27 per cent. In addition, individuals may deposit up to £50,000 in a special savings account, which is subject to a special low DIRT rate of only 15 per cent. DIRT satisfies an individual's full liability to income tax in respect of deposit interest income.
The net yield from DIRT in 1996 was £128.5 million. Without a major search of records it is difficult to determine definitively if any proposals have ever been received in recent years to abolish this major source of tax revenue.
As regard the withholding tax on professional services, the Deputy will appreciate it does not represent an additional tax liability but rather the payment of tax on account and this tax will be available for set-off against the taxpayer's final liability. A number of representations have been received proposing changes in the way that this tax is applied. However, I do not propose to make any changes at present.
The Deputy will of course be aware that the reduction of 1 per cent to 26 per cent in the standard rate of income tax which I announced in the budget will also apply to the withholding tax and to the standard rate of DIRT.