Dáil Éireann Debate, Tuesday - 23 June 2020
86. Deputy Pearse Doherty asked the Minister for Finance the cumulative cost for each of the years 2022 to 2025 of indexing PAYE credits, personal tax credits, exemption limits, USC rate bands and income tax standard rate bands by 2% and 3%, respectively, disaggregated by year and category. [12686/20]
Amharc ar fhreagraThe pre-Budget 2021 Reckoner Ready is available on the Revenue website at the link
https://www.revenue.ie/en/corporate/information-about-revenue/statistics/ready-reckoner/index.aspx .
It shows, on page 10, the estimated annual cost to the Exchequer of 1% indexation of a number of credits and bands.
As shown in this document, the total full year cost of a 1% increase in the PAYE credit, earned income credit, exemption limits, personal tax credits, income tax rate bands as well as USC rate bands and exemption limits is estimated to be €156 million in a full year.
This cost is based on 2020 estimates from the Revenue tax forecasting model using latest actual data for the year 2017, adjusted as necessary for income, self-employment and employment trends in the interim.
The cost of indexation at rates other than 1% may be extrapolated from these figures on a single year straight-line basis.
Further, costings shown in the Pre-Budget 2021 Ready Reckoner are based on revised tax forecasts (April 2020). They are tentative costings and likely to be revised as further information becomes available.
Finally, the Revenue model does not provide cost estimates for periods longer than a single year.
