Dáil Éireann Debate, Wednesday - 27 April 2005
169 Mr. McGuinness asked the Minister for Finance his views on a development land tax which might be levied on those whose assets gain in value from wider economic and social development; the likely revenue from such a tax if it were levied at the same rate as capital gains tax; and if he will make a statement on the matter. [13659/05]
Amharc ar fhreagraI have no plans to introduce a development land tax. There is already provision in the capital gains tax code to tax gains on the sale of development land. I have no estimate of the revenue yield from a specific land tax as this depends on the rate of tax applied and the value of the assets concerned.
170 Mr. McGuinness asked the Minister for Finance the likely cost to the Exchequer of introducing a 35 hour working week; and if he will make a statement on the matter. [13660/05]
Amharc ar fhreagraThere is no estimate available on a costing for a change such as this. There are a number of factors that would need to be considered in making any estimate, including how the reduction in hours worked by existing public service employees would be covered, for example, by employing extra personnel or increased reliance on overtime. No analysis has been carried out of the cost of such a reduction in the working week but since the Exchequer pay bill, excluding pensions, is €13.6 billion, the cost would certainly run to several hundreds of millions.
171 Mr. McGuinness asked the Minister for Finance the additional revenues likely to accrue from the introduction of a new top rate of 45% on incomes greater that €100,000 per annum. [13661/05]
Amharc ar fhreagra172 Mr. McGuinness asked the Minister for Finance the additional revenues likely to accrue from the introduction of a new top rate of 50% on incomes greater that €100,000 per annum. [13662/05]
Amharc ar fhreagraI propose to take Questions Nos. 171 and 172 together.
It is assumed that the threshold for the proposed new top rates of income tax mentioned by the Deputy would not alter the existing standard rate band structure applying to single and widowed persons, to lone parents and married couples and would also provide for the insertion of a new band at 42% up to €100,000 for all individual taxpayers.
On this basis, I am advised by the Revenue Commissioners that the full year yield to the Exchequer, estimated by reference to 2005 incomes, of the introduction of a new top rate of tax of 45% on incomes in excess of €100,000 is €147 million and for a top rate of 50% is €393 million.
These figures are provisional and subject to revision.
173 Mr. McGuinness asked the Minister for Finance the cost of providing tax relief at the top rate to all taxpayers who are contributing to pensions, subject to a contribution cap of €250,000. [13663/05]
Amharc ar fhreagraTax relief on individual pension contributions is allowed at the taxpayer's marginal tax rate, that is, at the standard or higher rate as appropriate in each case. It is assumed that the change mentioned by the Deputy is to provide tax relief at the top rate of tax for all pension contributions by individuals, including those currently relieved at the standard rate.
It is not possible to provide an estimate in respect of employee and employer contributions to occupational pensions because the relevant data on contributions is not captured in such a way as to provide a dedicated basis for compiling this information. Tax relief for pension contributions by employees is normally given by way of a deduction from total income in arriving at income for tax purposes, that is, the income for tax purposes of employees is net of their pension contributions, the "net pay" arrangement. The employer's contributions are an allowable deduction from profits and are not specifically recorded in Revenue Commissioners statistics.
Provisions were included in the Finance Act 2004 requiring employers to provide data on superannuation contributions in the P35 form to be filled by employers in February 2006. Preliminary information should become available in mid-2006, bearing in mind the Revenue Commissioners have to carry out a programme to check the quality, consistency and accuracy of the returns. These changes will yield additional information regarding the overall cost of tax relief for pension contributions but as the returns will be aggregated at employer level they will not provide a precise basis for measuring the potential impact on the Exchequer of proposals for changes at individual level.
As regards the self employed and certain employees in pensionable employment, there are data available relating to relief on contributions for retirement annuity contracts, RACs, for the short tax year 2001. RACs are subject to a current contribution cap of €254,000. On that basis the full year cost to the Exchequer, adjusted for a 12 month year, of the change mentioned is tentatively estimated at approximately €23 million but could be considerably higher if the change resulted in new pension contributors claiming the relief.
175 Mr. McGuinness asked the Minister for Finance the cost to the State of tax relief for health insurance in 2004. [13665/05]
Amharc ar fhreagraI am informed by the Revenue Commissioners that the cost to the Exchequer of tax relief allowed for insurance against expenses of illness in the calendar year 2004 was €218 million.
