Special savings accounts, SSAs, were introduced in 1993 with a low rate of deposit interest retention tax, DIRT, i.e. 10 per cent to help prevent outflows of funds from the State following the liberalisation of exchange controls. The rate was increased to 15 per cent in 1995.
I announced in the Budget Statement in December 1997 that I would increase the 15 per cent rate of DIRT on SSAs to 20 per cent with effect from 6 April 1998. The Government is aiming for a 20 per cent standard rate of income tax and, accordingly, it seemed fitting to move the rate of DIRT on SSAs to this rate at this stage. I also considered that a 20 per cent rate would redress the imbalance between the tax treatment of such deposit interest and other income.
I am informed by the Revenue Commissioners that information regarding the numbers and levels of SSAs held by persons of any age is not available to them. However, data on SSA deposits, published in the Central Bank of Ireland monthly statistics, indicates that as of 30 January 1998 IR£4,533 million was on deposit in SSAs held by Irish residents. Given the maximum amount that can be held is £50,000 per person, then at least 90,000 people hold SSAs. I have no proposals to remove the initial three month and subsequent one month notice requirements for withdrawals from such accounts.
