Ceist:
17 Dr. Upton asked the Minister for Finance if he will make a statement in relation to the alignment of the tax year with the calendar year. [28013/00]
Written Answers. - Income Tax Year.
I announced on 20 July 2000 that from 2002 the income tax year will be aligned with the calendar year. From that point, Budget day tax changes and social welfare weekly rate improvements will be brought forward to 1 January. This will be of importance to taxpayers and social welfare recipients who will benefit earlier from budget day changes compared with the current position where tax changes apply from April and social welfare changes from May. It had been announced already that, in 2001, social welfare increases would apply from April.
Using the calendar year will put the collection of income tax on a more rational and simplified basis. Combining this change with the introduction of the euro in cash form will allow necessary changes to information technology systems to be made in one go. From 1 January 2002, the tax year will run from 1 January to 31 December.
There will be a transitional tax period of nine months running from 6 April 2001 to 31 December 2001. In general, annual tax allowances and credits will be scaled down to 74% of the amount appropriate for a full year. In this way, taxpayers will find that their weekly allowances and credits in the transitional period will work out the same as in a full year.
In tandem with the changeover to the calendar year there will be a change in dates for filing of tax returns and payment of tax for self-employed taxpayers. These taxpayers will pay preliminary tax for the current year on 31 October. They will also file returns for the previous tax year and pay the balance of tax due in respect of the previous tax year on the same date. The dates will apply in 2002 for returns and payments in respect of both the 2001 transitional period and the 2002 tax year.
To facilitate the change, it may be necessary to have an earlier budget day rather than early December as at present.
Question No. 18 taken with Question No. 10.