Wednesday, 29 September 2010

Ceisteanna (317, 318, 319, 320, 321, 322, 323)

Arthur Morgan

Ceist:

407 Deputy Arthur Morgan asked the Minister for Finance the return to the Exchequer in a full year if a 48% tax on individual incomes in excess of €100,000 was introduced. [31863/10]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Minister for Finance)

It is assumed that the threshold for the proposed new tax band 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.

I am advised by the Revenue Commissioners that the estimated full year yield to the Exchequer, estimated by reference to 2011 incomes, of the introduction of a new 48% rate would be of the order of €410 million. Given the current band structures, major issues would need to be resolved as to how, in practice, such a new rate could be integrated into the current system and how this would affect the relative position of different types of income earners.

This figure is an estimate from the Revenue tax-forecasting model using actual data for the year 2008, adjusted as necessary for income and employment trends for the year 2011. It is therefore provisional and likely to be revised.

Arthur Morgan

Ceist:

408 Deputy Arthur Morgan asked the Minister for Finance the return to the Exchequer in a full year if capital gains tax was increased to 40%. [31864/10]

Amharc ar fhreagra

I am informed by the Revenue Commissioners that the estimated full year gain from increasing the rate of Capital Gains Tax (CGT) from 25% to 40% is €240 million. This estimate assumes no behavioural changes on the part of taxpayers.

CGT is very dependent on individual behaviour and a change in rate may not produce a corresponding increase or decrease in tax yield. In current economic conditions any estimate of additional yield must be treated with caution. The realisation of any estimated yield from an increase in taxation on assets relating to property is subject to movements in the value of such assets, which are currently occurring in the economy. In addition, increasing the rate could, in theory, lead to a reduction in yield from the tax.

Arthur Morgan

Ceist:

409 Deputy Arthur Morgan asked the Minister for Finance the return to the Exchequer in a full year if capital acquisitions tax was increased to 35%. [31865/10]

Amharc ar fhreagra

I am advised by the Revenue Commissioners that the estimated full year yield to the Exchequer from increasing the Capital Acquisitions Tax rate by 10%, based on the Budget estimate of €240 million for 2010, could be in the region of €96 million.

However, it should be noted that this estimate is based upon an assumption that there would be no behavioural impact of such an increase, which could lead to a less than expected result from a change to the tax rate. In addition, the realisation of any estimated yield from an increase in taxation on assets relating to property is subject to movements in the value of such assets, which are currently occurring in the economy.

Arthur Morgan

Ceist:

410 Deputy Arthur Morgan asked the Minister for Finance the return to the Exchequer in a full year if all discretionary tax reliefs were standardised. [31866/10]

Amharc ar fhreagra

I am advised by the Revenue Commissioners that the deductions and reliefs which are allowable for tax at an individual's marginal rate of income tax and for which estimates of cost can be provided are set out below together with estimated costs for the year 2006, the most recent year for which the necessary detailed information is available. If relief for these deductions and reliefs was confined to the standard rate of income tax the saving to the Exchequer could be of the order of €1,100 million.

This estimate does not take into account any possible behavioural change on the part of taxpayers as a consequence of such a change or the economic effect of such a change. This applies in particular to the BES, Film Relief and Capital Allowances regime. The standard rating of employee pension reliefs would also have an impact on workers' take home pay.

Tax Relief Provision

2006 Cost

Saving if standard rated

€m

€m

Person Taking Care of Incapacitated Taxpayer

2.8

1.2

Health Expenses*

167.2

64.1

Contributions Under Permanent Health Benefit Schemes, after Deduction of Tax on Benefits Received

3.1

1.4

Employees’ Contributions To Approved Superannuation Schemes

543.3

257.3

Retirement Annuity Premiums

435.9

210.2

Personal Retirement Savings Accounts

56.4

22.9

Interest paid relating to borrowings for purposes such as acquiring an interest in a company or partnership or to pay death duties.

31.1

15.4

Expenses Allowable to Employees under Schedule E

71.2

25.8

Donations to Approved Bodies

49.5

20.1

Donations to Sports Bodies.

0.3

0.1

Retirement Relief for certain Sports Persons.

0.2

0.1

Revenue Job Assist allowance

0.3

0.1

Allowance for seafarers

0.3

0.1

Investment in Corporate Trades (BES)

21.4

11.4

Investment in Seed Capital

1.2

0.6

Stock Relief

2.0

0.6

Relief for expenditure on significant buildings and gardens

6.2

3.0

Donation of Heritage items

5.7

2.0

Capital Allowances (Income Tax only)

796.8

328.2

Rented Residential Relief — Section 23

252.4

132.2

Investment in Films

36.4

19.1

Total

2,483.7

1 ,115.9

*For 2009, Health Expenses Relief has already been standard rated, with the exception of nursing home expenses. The majority of the saving in relation to this item will accrue to the Exchequer from 2010.

Estimates of the costs of tax deductions and reliefs for 2007 are currently being compiled.

Arthur Morgan

Ceist:

411 Deputy Arthur Morgan asked the Minister for Finance the return to the Exchequer in a full year if all remaining property based tax relief were abolished. [31867/10]

Amharc ar fhreagra

It is assumed that the Deputy is referring to the abolition of the tax relief on future expenditure in relation to the following property based tax incentive schemes that remain in the tax code: Qualifying Specialist Palliative Care Units (subject to Commencement Order) and certain tourism infrastructure under the Mid-Shannon Scheme (only 80% of expenditure can qualify in certain areas).

I am informed by the Revenue Commissioners that, based on information regarding the cost of these schemes that has been received and collated for the tax year 2008, the latest year for which data is available, the annual yield to the Exchequer from the abolition of these reliefs could be in the region of €0.7 million.

Tax relief in respect of investment in Convalescent Homes, Qualifying (Private) Hospitals, Qualifying Mental Health Centres, Registered Nursing Homes and Qualifying (Nursing Home) Residential Units was abolished in the Supplementary Budget and Finance Bill 2009.

Tax relief in respect of investment in buildings used for child care purposes was terminated in the Finance Bill 2010.

Apart from the schemes listed above all other property based tax incentive schemes have been terminated on, or before, 31 July 2008.

Arthur Morgan

Ceist:

412 Deputy Arthur Morgan asked the Minister for Finance the return to the Exchequer in a full year if DIRT were increased by 5%. [31869/10]

Amharc ar fhreagra

It is estimated that the yield to the Exchequer from increasing the DIRT rate by 5 per cent to 30% is €123m in a full year, assuming no significant behavioural change by depositors or a change in interest rates applied by financial institutions to savings.

Arthur Morgan

Ceist:

413 Deputy Arthur Morgan asked the Minister for Finance the return to the Exchequer in a full year if he re-introduced tax at betting meetings at the rate at which the tax was last applied before its abolition. [31870/10]

Amharc ar fhreagra

It is assumed that the question relates to the application of betting duty to bets placed with on-course bookmakers at horse and greyhound race meetings. Based on an estimate of around €150 million of bets having been placed with on-course bookmakers at race meetings over the twelve month period to September 2010, it is estimated that applying the 5% betting duty to such bets would have yielded the Exchequer approximately €7.5 million.

The on-course duty was reduced from 5% to zero in 1999 in the context of the reduction in the off-course duty at that time and the importance of supporting attendances at race meetings.