Maureen O'Sullivan
Ceist:112. Deputy Maureen O'Sullivan asked the Minister for Finance the adjustment made for indexation of income tax bands and income tax rates when calculating the fiscal space for budget 2018. [19651/18]
Amharc ar fhreagraTuesday, 8 May 2018
Ceisteanna (112)
Freagraí scríofa
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 of the order 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 this is a revenue generating measure (discretionary revenue measure) it increases the amount by which government expenditure can increase under the expenditure benchmark rule.
It should be noted that I have been 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.