Joe Higgins
Ceist:108 Mr. Higgins (Dublin West) asked the Minister for Finance the cost or estimated cost of reducing the top rate of income tax to 42% and 40%. [16877/00]
Written Answers. - Tax Yield.
I am informed by the Revenue Commissioners that the full year costs to the Exchequer, by reference to the income tax year 2000-2001, of the changes mentioned by the Deputy are estimated as follows:
|
Full Year Cost |
million |
|
44% to 42% |
£139 |
|
44% to 40% |
£277 |
These figures are provisional and are likely to be revised.
Joe Higgins
Ceist:109 Mr. Higgins (Dublin West) asked the Minister for Finance the cost or estimated cost to the exchequer from reducing the 21% VAT rate to 15%. [16878/00]
The cost to the Exchequer of reducing the 21% VAT rate to 15% is estimated at £1,110 million in a full year.
Joe Higgins
Ceist:110 Mr. Higgins (Dublin West) asked the Minister for Finance the cost or estimated cost of introducing a 10% income tax rate for the first £2,500 of single income and £5,000 for a couple. [16879/00]
Presumable the Deputy has in mind the taxation at 10% of the suggested portions of the band currently taxable at 22%. On that basis the estimated full-year effects on the Exchequer by reference to the income tax year 2000-2001 arising from the changes mentioned by the Deputy are as follows:
|
Full Year Cost |
£million |
|
£2,500/£5,000 @ 10% with £14,500/£23,000 @ 22% |
474 |
If, however, the existing 22% band of £17,000 single, and £28,000 married were to apply in addition to the 10% bands described above, the cost would be substantially higher, up to £783 million. It should be pointed out that, unlike other tax regimes where an introductory rate of 10% applies, there are substantial income tax exemption limits in the Irish tax system which effectively remove many low income earners from the tax net, thereby reducing the necessity for, and the impact of, a low rate starter tax band.
The changes applying to single persons in the question are also assumed to apply in similar measures to lone parents for whom a special rate band of £20,150 was introduced in Budget 2000.
These figures are provisional and are likely to be revised.
Willie Penrose
Ceist:111 Mr. Penrose asked the Minister for Finance the reason a person (details supplied) in County Tipperary, who is in receipt of a farm retirement pension, is receiving approximately the same in terms of payment, as at 20 April 2000 that he received in March 1996 despite the fact that there were significant changes in the taxation system in the interim; and if he will make a statement on the matter. [16880/00]
I am informed by the Revenue Commissioners that, according to the information available to the inspector of taxes, the taxpayer is in receipt of all of the tax-free allowances to which he is entitled and tax is being correctly deducted under the PAYE system.
I am further informed that the amount of tax paid by the taxpayer in each of the tax years 1996-97 to 1998-99 inclusive is correct – the inspector has not yet received details of the taxpayer's income for the 1999-00 tax year. The taxpayer has benefited from increased tax-free allowances and reduced tax rates each year. However, it is noted that the P35 returns submitted by the Department of Agriculture, Food and Rural Development show that the gross amount of the taxpayer's pension income has decreased slightly each year since 1996-97 and this may account for the position as outlined by the Deputy.