Dáil Éireann Debate, Tuesday - 9 June 2020
70. Deputy Michael McGrath asked the Minister for Finance if he has considered increasing credits in 2021 to cater for those that have received the temporary wage subsidy scheme or the pandemic unemployment payment and have income tax due from those payments; the estimated cost of such a measure; and if he will make a statement on the matter. [10314/20]
Amharc ar fhreagraI do not have any plan at this time to reconsider the existing tax credit arrangements that apply to all taxpayers in the manner suggested by the Deputy.
It is important to point out that the Temporary Wage Subsidy Scheme (TWSS), the Pandemic Unemployment Payment (PUP) already represent a very significant support to those who have may have suffered a loss of income arising from the COVID-19 crisis.
Income tax receipts account for around 40% of Ireland’s annual tax receipts, thereby making a significant contribution towards the cost of the various Exchequer funded State services, many of which are experiencing additional pressures at this time on account of the crisis we are facing as a result of the necessary response to the COVID-19 pandemic.
Ireland has a progressive income tax system which is structured such that the more income a taxpayer has, the more tax he or she will pay. As an individual’s income increases, they move up through the various rates and bands and, as a result, while the levels of take home pay increase overall, the amount of tax paid also increases. It follows that those with a lower income as a result of benefitting from the TWSS or the PUP will have a lower income tax liability than might otherwise have been the case.
