Tax Credits

Tuesday, 11 July 2017

Ceisteanna (132)

Pearse Doherty

Ceist:

132. Deputy Pearse Doherty asked the Minister for Finance the estimated cost of increasing the self-employed tax credit in circumstances (details supplied). [32223/17]

Amharc ar fhreagra

Freagraí scríofa

I am informed by Revenue that the estimated first and full year cost to the Exchequer of increasing the Earned Income Credit (EIC) to levels proposed by the Deputy and tapering the increase by 5% per €1,000 between €80,000 and €100,000, with no additional credit entitlement (above the current €950) when income exceeds €100,000, is outlined in the following table.

EIC increase	First Year €m	Full Year €m
By €250 to €1,200	19	33
By €350 to €1,300	26	46
By €450 to €1,400	33	60
By €550 to €1,500	41	73
By €700 to €1,650	52	93

The figures for the cost of the increase in EIC are based on the Revenue tax forecasting model using latest actual data for the year 2014, adjusted as necessary for income, self-employment and employment trends in the interim. They are based on taxpayer units with married persons or civil partners who have elected or who have been deemed to have elected for joint-assessment counted as one tax unit. They are estimated by reference to 2017 incomes and are provisional and may be revised.

Finally, I am advised by Revenue that, given the current tax structures, major issues would need to be resolved as to how, in practice, the tapering out of tax credits could be integrated into the current system, and how this would affect the relative position of different types of income earners.