Brian Cowen (Laois-Offaly, Fianna Fail)

If I understand the Deputy's amendment correctly he proposes that I make regulations to provide that where payments made to the State or other bodies qualify for income tax relief that relief be given by way of deduction from the payment, rather than as part of the taxpayer's tax credits. In that case the Deputy is proposing an extension of the principle of tax relief at source, which currently exists for medical insurance premiums and mortgage interest payments. While that system works very successfully in both those areas it is not, as I said on Committee Stage, suitable for all reliefs. Ideally the system needs a small number of payment recipients relative to a large and regular number of payers. There are not many reliefs which meet such criteria and the system would not be cost-effective either for Revenue or the payee for once-off or irregular payments to a wide variety of payees. There is also an Exchequer cost and to work smoothly the tax relief at source system must apply to all payers, whether or not they are liable to tax. The benefits must be judged against the costs and that cannot be done on the catch-all basis proposed by the Deputy.

On Committee Stage, I indicated to the Deputy that I would consider whether there was any area, given the number of bodies or institutions on whom one was dependent for information and the number of taxpayers involved, to which an extension of tax relief at source could be applicable. If and when I identify any areas of tax relief that are suitable for applying the scheme I will bring them before the House. However, extending tax relief at source is not as simple as people might think. For that reason I cannot accept the amendment suggested.

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