Ms Michelle Murphy:

We have never been in favour of personal income tax decreases. The issue is the refundable tax credit where the tax system is made more equitable, particularly for low-income workers. We have one of the highest levels of people who are considered low paid in the European Union. In July, the Low Pay Commission report highlighted that issue. The people in question are concentrated in particular sectors. In order to ensure this group of people are treated equitably within the income tax system and get the same benefits as everybody else, we propose that tax credits be made refundable. However, on an overall basis, the answer to the Deputy's question would be "No" because the amount of people paying income tax will decrease as we age; therefore, I would not see any scope in terms of reducing personal income taxes. Our submission shows that if we compare the effective tax rates, not the marginal rates, from 2000 to 2018, we can see that people paid a lot more tax 18 years ago than they do today at different income levels. It is not the marginal rate that is important, rather it is the effective rate that is important for an individual and their take-home pay and disposable income.