Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

So we agree in principle. Obviously, this is being introduced for budgetary reasons because the Exchequer needs the money. I try to do taxes in a way that would also have an economic benefit if I can do that. The savings ratios in the country are very high. There is a lack of demand in the domestic market. In seeking to raise extra money for the Exchequer I also had in mind the savings ratios and the fact that, at a minimum, incentives were no longer required to get people to save more.

A rate of deposit interest retention tax lower than the marginal rate of tax is an incentive to save.

At times, governments want people to save and in this regard impose a low rate of tax on savings. We no longer need to incentive sayings. This is not a disincentive to saving, rather it is the removal of an incentive to saving. The proposed rate will be 41%, which will incentivise investment and spending in the economy, which is vital to the creation of jobs. The increase in DIRT is expected to yield to the Exchequer €93 million in 2014 and €124 million in a full year. Reducing the rate to 36% would cost in the region of €58 million in 2014 and €78 million in a full year. I do not propose to accept the amendment.