Trevor Sargent
Ceist:193 Mr. Sargent asked the Minister for Finance the measures he intends to take to bring about integration of the tax and social welfare systems. [25582/02]
Written Answers. - Tax and Social Welfare Integration.
The issues involved in integrating the tax and social welfare systems were examined in detail by the expert working group on the integration of the tax and social welfare systems in 1996.
Since 1996 a considerable amount of progress has been made on foot of this report including the phasing out of the general income tax exemption limits and reform of the levy system. The exemption limit/marginal relief system was identified by the group as a contributory factor in unemployment and poverty traps. Government policy since budget 1998, the last time the general exemption limits were increased, has been to increase the tax credits to such a level that no-one need avail of the general exemption limits and, therefore, that no low income earner would face a marginal tax rate of 40%. This target may be regarded as having been achieved.
The Department of Social and Family Affairs is represented on the tax strategy group. This results in a more co-ordinated approach to the discussion of possible changes or reforms to tax or levy systems. The interaction between the tax and social welfare systems has been taken into account in the formulation of tax and social welfare packages in recent budgets and this approach will continue.
As noted by the expert group at the time, the term integration of tax and social welfare can mean different things to different people, ranging from a total merging of the two systems to better co-ordination of the existing systems. If the Deputy would like to specify if he has specific integration issues in mind I would be glad to endeavour to respond.
Question No. 194 answered with Question No. 185. Question No. 195 answered with Question No. 188. Question No. 196 answered with Question No. 180.