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

I move amendment No. 25:

In page 103, between lines 28 and 29, to insert the following: “87. The Minister shall, within one month of the passing of this Act, prepare and lay before Dáil Éireann a report on options available for the charging of Deposit Interest Retention Tax at rate equivalent to the individual’s marginal income tax rate.”.

This amendment relates to the issue of deposit interest retention tax, DIRT. Deposit interest is income for an individual but it is not taxed in the normal way as all other forms of income are. The purpose of this amendment is to call on the Government to bring forward a report on the options available for the charging of DIRT at a rate equivalent to the individual's marginal income tax rate.

As the Minister of State knows, since 2008 the level of DIRT has gone up from 20% to 41%. It has more than doubled - an increase greater than any in any other taxation heading of which I am aware. It came at a time that coincided with a collapse in interest rates. For many elderly people in particular, who rely on deposit interest for their income and notwithstanding the very limited exemption that is available for elderly people in certain circumstances, those who have no income tax liability can end up paying 41% tax on their deposit interest, plus a further 4% PRSI in certain cases, if they have unearned income above a level of about €3,200. If one is paying income tax generally at 0%, 20% or 40%, one is paying DIRT at 41% on one's deposit interest. I know what I am suggesting raises administrative issues and is potentially complex, but there is an issue of justice and equity here and it affects many people, particularly elderly people. This amendment was debated on Committee Stage, but I wanted to ventilate the issue on Report Stage in the full Chamber and I hope the Government will reconsider this.

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