Dáil Éireann Debate, Wednesday - 30 January 2013
61. Deputy Patrick Nulty asked the Minister for Finance the amount that would be raised for the Exchequer in a calendar year if pension tax relief was included in the minimum effective tax rate; and if he will make a statement on the matter. [4572/13]
Amharc ar fhreagraThe existing restriction of reliefs or horizontal measure is activated where individuals have an adjusted income of €125,000 and claim specified reliefs of €80,000 or more. Those subject to the full restriction, at adjusted incomes of €400,000 or greater will pay an effective income tax rate of 30% in addition to PRSI and levies. Broadly, the reliefs restricted are the various property based tax incentives and certain other reliefs such as the Employment and Investment Incentive, film relief and the artists’ exemption. The normal deductible items available to the broad range of taxpayers such as medical expenses, personal tax credits and exemptions such as that for child benefit are not restricted. Similarly, normal business expenses and deductions for capital allowances on plant and machinery, as well as genuine business related trading losses are not restricted.
A reliable estimate of the yield to the Exchequer if tax relief on pension contributions was brought within the ambit of the restriction could only be provided by a significant development of the costing model, which would be prohibitive in terms of the resources required. An indicative and very tentative estimate of the full year yield that might arise if contributions to Retirement Annuity Contracts (RACs) and Personal Retirement Savings Accounts (PRSAs) were subjected to the restriction could be of the order of €30 million to €40 million. With regard to occupational pensions (schemes set up by employers), the figures in respect of employee contributions are available only in aggregate form and do not provide a basis for compiling a corresponding estimate.
