Gerry Horkan (Fianna Fail) | Oireachtas source

I move recommendation No. 3:

In page 40, between lines 3 and 4, to insert the following:"(3) 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.".

This is another recommendation that is looking for a report to be prepared. DIRT is being reduced but the exit tax from life assurance policies is not. I have spoken to officials about this matter. The DIRT rate, which has increased enormously in recent years, will be reduced from 41% to 39% in 2017 and to 33% by 2020. Interest rates are very low. Very little interest is being earned by depositors. The DIRT rate was traditionally linked to the rate of exit tax applicable to life assurance investments. The yield from the exit tax on such investment projects has increased dramatically in recent years. I am proposing this amendment to highlight the fact that there will now be discrimination between different types of savings and investment products. That difference has not existed before now. As I have alluded to, returns on many savings products are close to 0%. There is a 1% stamp duty on life assurance investment products as well. I am asking for a report to be produced to highlight the consequences of discriminating against people who are saving through different investment instruments. Although the differential is small, it will get larger as the Government reduces the DIRT rate to 33% if the exit tax is left at 41%. The 2% DIRT reduction will cost €9 million in 2017. The Minister has indicated that it will cost €14 million in a full year. What would have been the extra cost if we had extended the reduction to the life assurance products I am asking about? I understand it would cost €11 million to extend the DIRT rate adjustment to these savers. I would like to hear the Minister of State's response.