Dáil Éireann Debate, Thursday - 1 October 2015
63. Deputy Michael McGrath asked the Minister for Finance the cost of equalising the treatment of pay as you earn, PAYE, and non-PAYE workers earning over €100,000 per year; and if he will make a statement on the matter. [33825/15]
Amharc ar fhreagra64. Deputy Michael McGrath asked the Minister for Finance the cost of reducing the 11% rate of universal social charge for non-pay as you earn workers earning over €100,000 per year to 10% and to 9%; and if he will make a statement on the matter. [33826/15]
Amharc ar fhreagra65. Deputy Michael McGrath asked the Minister for Finance the cost of introducing an earned income tax credit for self-employed people of €250; €500; €825; €1,650, per annum; and if he will make a statement on the matter. [33827/15]
Amharc ar fhreagra66. Deputy Michael McGrath asked the Minister for Finance the cost of increasing the personal income tax credit by €100 and by €200 per year; the number of taxpayers who would benefit; and if he will make a statement on the matter. [33828/15]
Amharc ar fhreagra67. Deputy Michael McGrath asked the Minister for Finance the cost of reducing the 7% rate of universal social charge to 5.5% and to 5%; and if he will make a statement on the matter. [33829/15]
Amharc ar fhreagra68. Deputy Michael McGrath asked the Minister for Finance the number of persons who paid the 3% universal social charge surcharge on earnings over €100,000 in each year since 2011; and if he will make a statement on the matter. [33830/15]
Amharc ar fhreagraI propose to take Questions Nos. 63 to 68, inclusive together.
Regarding the question as to the cost of equalising the treatment of Pay As You Earn (PAYE) and non-PAYE income earners over €100,000, it is assumed that the Deputy is referring to the current 3% Universal Social Charge (USC) surcharge applicable to self-assessed income over €100,000. I am informed by the Revenue Commissioners that the estimated first and full year costs of abolishing this surcharge are in the order of €59 million and €144 million respectively. Alternatively, the estimated first and full year yields to the Exchequer of applying a comparable 3% USC surcharge to Pay As You Earn (PAYE) income over €100,000 are in the order of €84 million and €108 million respectively. The Deputy will be aware that other differences also exist in the treatment of employed and self-employed taxpayers, such as differences in expenses deduction regimes and the timing of tax payments. In this regard, the PAYE and self-assessment systems are not directly comparable.
Regarding the question as to the cost of reducing the 11% rate of Universal Social Charge for non-Pay As You Earn income earners over €100,000 to 10%; and to 9%, I am informed by the Revenue Commissioners that the estimated first and full year costs to the Exchequer of reducing the rate from 11% to 10% are in the order of €20 million and €48 million respectively. The estimated first and full year costs of reducing the rate from 11% to 9% are €40 million and €96 million respectively.
In relation to the question as to the number of persons who paid the 3% Universal Social Charge surcharge on earnings over €100,000 in each year since 2011, I am informed by the Revenue Commissioners this information is available for 2012 and 2013 on the Revenue Statistics webpage at http://www.revenue.ie/en/about/statistics/usc-rates.pdf.
In response to the question as to the cost of introducing an earned income tax credit for self-employed people of €250; €500; €825; €1,650, per annum the Revenue Commissioners estimate, on the basis of 2013 returns, the latest year for which data are available, introducing this credit would cost in the region of €21 million, €41 million, €68 million and €137 million respectively. For the purposes of this estimate, it is assumed that the credit would only be extended to cases identified to be in receipt of Trading or Professional (Case I or Case II) income, and not currently in receipt of the PAYE credit. The estimate does not take into account the ability of the credit to be fully absorbed.
Regarding the question of the cost of increasing the personal income tax credit by €100; and by €200, per annum; and the number of tax payers who would benefit, I am advised by the Revenue Commissioners that the estimated full year cost to the Exchequer would be of the order of €219 million and €436 million respectively. The number of income earners to benefit from the Deputy's proposal would be 1.4 million. The increase in the personal tax credits mentioned in the Deputy's Question is assumed to apply in similar measure to widowed persons tax credit and to include the normal consequential increases in the tax credit for lone parents and the married tax credit. It should also be noted that a married couple or civil partners who has elected or has been deemed to have elected for joint assessment is counted as one tax unit.
In relation to the question as to the cost of reducing the 7% rate of Universal Social Charge to 5.5%; and to 5%, I am advised by the Revenue Commissioners that a Ready Reckoner is available on the Revenue Statistics webpage at http://www.revenue.ie/en/about/statistics/ready-reckoner.pdf. This Pre-Budget 2016 Ready Reckoner shows a wide range of information including a number of indicative changes to USC rates and thresholds. While the Ready Reckoner does not show all of the specific costings requested by the Deputy, other changes can be estimated broadly on a pro-rata (or straight-line) basis with those displayed in the Reckoner.
All figures provided above are estimates for 2016 incomes from the Revenue tax forecasting model using latest actual data for the year 2013, adjusted as necessary for income, self-employment and employment trends in the interim. They are provisional and may be revised.
