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Dáil Éireann díospóireacht -
Wednesday, 4 Nov 1998

Vol. 496 No. 1

Written Answers. - Deposit Interest Retention Tax.

Noel Ahern

Ceist:

164 Mr. N. Ahern asked the Minister for Finance if his attention has been drawn to the growing concern at the fall in deposit rates; the level of DIRT collected per year; and if he will assist mainly elderly people living on deposit savings by introducing measures including removal of DIRT on special savings accounts, for elderly people over 65 and reducing DIRT to its original 5 per cent rate for all or at least for the elderly. [22178/98]

DIRT at 20 per cent or 24 per cent is the collection mechanism by which tax is withheld at source on deposit interest and in all cases is a final liability tax on such interest income. The yield from DIRT net of refunds, was £148 million in 1997 and is an important source of Exchequer revenue. I have no plans to cut the rate of DIRT on interest income in the circumstances of falling interest rates. Naturally any further cuts in the standard rate of income tax, now 24 per cent, will be reflected in the standard rate of DIRT.

Regarding the situation of the elderly in relation to DIRT, the over-65's are one of only two categories of individuals entitled to a refund of DIRT paid if their income is below the income tax exemption thresholds. Concessionary treatment is, therefore, afforded to the elderly in the administration of DIRT where their incomes fall outside the tax net. It is a general principle of taxation that as far as possible income from all sources should be subjected to taxation.

DIRT receipts for 1986 to 1997 are set out below for each calendar year.

Year

Net DIRT

£m

1986

137

1987

297

1988

206

1989

185

1990

271

1991

261

1992

255

1993

259

1994

90

1995

114

1996

126

1997

148

Total

2,349

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