Ciarán Cuffe
Ceist:118 Mr. Cuffe asked the Minister for Finance the social welfare benefits of making unused tax credit refundable. [24757/02]
Written Answers. - Tax Code.
The issue of making unused tax credits refundable has been considered by a working group established under the Programme for Prosperity and Fairness to examine the role which refundable tax credits can play in the tax and welfare system. The group is made up of representatives of the social partners and is chaired by my Department. The group's report, setting out the results of its examination of this very complex area, will be finalised very shortly.
It should be noted that the current established approach to taxation in Ireland, and in other OECD countries, is that while the tax system has a role to play in the broader issue of equitable income distribution, it is not the primary mechanism for the distribution of income to low-income households. Instead, the social welfare system is the main instrument for this. It is also the established and generally accepted view that the fundamental role of taxation is to raise revenue to fund the provision of services by the State. The introduction of a refundable tax credit system would be a major departure from this position. It would have significant implications for the social welfare system as well as wide-ranging economic, cost and administrative implications. I understand that the group's report will deal with the issues involved in considerable detail.
Question No. 119 answered with Question No. 64.