Tuesday, 27 February 2018

Ceisteanna (168, 169)

Pearse Doherty

Ceist:

168. Deputy Pearse Doherty asked the Minister for Finance the estimated savings from the non-indexation of tax bands and credits in each of the years 2018 to 2022. [9528/18]

Amharc ar fhreagra

Pearse Doherty

Ceist:

169. Deputy Pearse Doherty asked the Minister for Finance the estimated amount that each of the tax bands and tax credits would increase by if they were indexed in each of the years from 2018 to 2022. [9529/18]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 168 and 169 together.

As the Deputy is aware, the Programme for Partnership Government 2016, indicates that the income tax system will not be indexed. As part of the preparations for Budget 2018, it was estimated that the Exchequer yield from non-indexation of the income tax system would be in the region of €0.6 billion on a full year basis.

It is important to point out that the calculation of non-indexation of the income tax system for 2018 was prepared on the basis of the following technical assumptions:

1. The projected increase in non-agricultural wages in 2018 of 3.1%.

2. The Revenue Commissioners Pre-Budget 2018 Ready Reckoner.

As the Deputy will appreciate, my Department has projected wage growth only out to 2021 for Budget 2018. In addition, I am advised by Revenue that Tax Ready Reckoners beyond 2018 are not available. However, it is not expected that the full year yield for the Exchequer from non-indexation of the income tax system beyond 2018 would change significantly from the €0.6 billion stated above.

Furthermore, I am advised by Revenue that the Post-Budget 2018 Ready Reckoner, available at: https://www.revenue.ie/en/corporate/documents/statistics/ready-reckoner.pdf, shows on page 10 the cost to the Exchequer of a 1% indexation of a number of credits and bands in 2018. Further changes can be estimated on a pro-rata basis from the information shown.