Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I move amendment No. 179:

In page 142, between lines 19 and 20, to insert the following:“The linking of DIRT rate and Exit Tax rate on Life Assurance Policies

60.The Minister shall, within three months of the passing of this Act, prepare and lay before the Oireachtas a report on the breaking of the link between the rate of DIRT and the rate of exit tax from Life Assurance Policies, including the impact of this on life assurance savers.”.

We have discussed this measure before. I raised it last year so I do not intend to labour the point. For a period of almost 20 years up to 2016, exit tax and deposit interest retention tax, DIRT, rates were aligned. They were identical throughout that period. Since 2016 there has been a divergence, as the Minister will know. He has programmed in a 33% reduction in DIRT by 2020, but the exit tax remains at 41%. Within a couple of years the difference in rates will be 8%. As the Minister knows, the exit tax applies to certain investment and savings products, generally long-term investment products. His answer last year was along the lines that it came down to the fiscal implications of moving the exit tax rate in line with DIRT. There is a significant difference already and it is going to grow to 8% by 2020. I am seeking to establish what the policy is at this point. Is it now policy that there will continue to be a difference of that order between the exit tax and DIRT rates?