Seán Ryan (Dublin North, Labour)
Link to this: Individually | In context

Question 151: To ask the Minister for Finance the rate of income tax paid by persons earning in excess of €100,000 per annum and upwards in bands of €20,000 per annum from the year 2000 to date in 2006, distinguishing between single persons and couples, between PAYE taxpayers and persons who are self employed and including taxpayers paying 0% and taxpayers paying tax at 20% and below; and if he will make a statement on the matter. [39229/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

I am informed by the Revenue Commissioners that the most recent basic data on incomes available from which information of the type requested by the Deputy could be derived are in respect of the income tax year 2003.

The information requested is set out in the following tables for the income tax years 2000/01, 2001 “short” year, 2002 and 2003. However, because of the Revenue Commissionersâ€TM obligation to observe confidentiality in relation to the taxation affairs of individual taxpayers and small groups of taxpayers, the breakdown by income bands requested by the Deputy is not provided in relation to incomes exceeding â'¬1 million due to the small numbers of income earners with incomes in excess of that level.

The Deputy will be aware that this material is dated in that major changes I made in my Budgets to the structure and extent of tax reliefs will increase the average tax rate for those on higher incomes using such reliefs. Caution should be used in basing policy pronouncements on these data.

*Notes to Tables

The 2001 short income tax year was a short transitional tax “year” running from 6 April to 31 December 2001 which preceded the first full calendar tax year 1 January 2002 to 31 December 2002. It should be noted that as PAYE taxpayers were charged to tax on their earnings in the period from 6 April to 31 December 2001 and self-employed taxpayers were assessed to tax for the short “year” on 74% of the profits earned in a 12 month accounting period, the income figures will not be directly comparable with those of earlier or later years.

A married couple who has elected or has been deemed to have elected for joint assessment is counted as one tax unit. Married couples and individuals with income chargeable to tax under both Schedule E and Schedule D have been classified in the attached tables by reference to the Schedule under which the larger amount of income is taxable.

The designation of a tax rate to an income earner in the tables is based on identifying the top tax rate applying to the taxable income of each earner. To arrive at the figure for taxable income, the gross income is reduced by various relevant deductions and allowances such as capital allowances, losses, allowable expenses and retirement annuities. In some cases, these will reduce the taxable income to nil.

Caution is required in comparing between years because data for 2002 and 2003 take account of DIRT paid by taxpayers, whereas the figures for 2000/2001 and the short tax “year” 2001 do not do so. To identify and associate the DIRT paid figures at taxpayer level for the two earlier years could not be achieved without conducting a protracted examination of the Revenue Commissionerâ€TMs records and amending supporting computer software.

The information on incomes is based on income returns on Revenue records at the time the data were compiled for analytical purposes, representing about 95 per cent of all returns expected.

Eamon Ryan (Dublin South, Green Party)
Link to this: Individually | In context

Question 153: To ask the Minister for Finance if his attention has been drawn to the Danish Government making provision for the repayment of VAT paid on expenditure of charitable bodies; and the way such a provision sits with the position of the Irish Government that such a measure cannot be undertaken due to European Union regulations. [39081/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

The position is that charities and non-profit groups engaged in non-commercial activity are exempt from VAT under the EU Sixth VAT Directive, with which Irish VAT law must comply. This means they do not charge VAT on the services they provide and cannot recover VAT incurred on goods and services that they purchase. Essentially only VAT registered businesses which charge VAT are able to recover VAT.

The Irish Charities Tax Reform Group (ICTRG) appears to accepts that charities can not be granted VAT refunds through the tax system. However, they are still seeking the introduction of a grant or subsidy in lieu of the VAT charities pay on their business inputs and estimate that this would cost €18 million per annum. In this regard, I am aware that the Danish equivalent to the ICTRG has made proposals to the Danish Finance Ministry. I understand, however, that as yet no scheme has been introduced.

I would add that the 140 bodies represented by the ICTRG already acknowledge that they receive €8.6 million in funding either directly or indirectly from the Exchequer. However, there are currently 7,000 charities registered with the Revenue Commissioners. It is therefore likely that the introduction of a scheme along the lines proposed by the ICTRG would cost the Exchequer significantly more than the €18 million they have estimated. The ICTRG will argue that they represent the largest charities but that is not the case as many educational and sporting organisations are also registered with the Revenue Commissioners as charitable or not-for-profit organisations. Therefore, the introduction of grant in lieu of VAT paid by registered charities would undoubtedly lead to other exempt bodies such as schools, hospitals and sporting, many of which are already registered as charities, seeking to benefit from such a system of refunds. These exempt bodies are already receiving considerable Exchequer funding.

Charities are exempt from Income Tax, DIRT, Stamp duty, Capital taxes and donations to charities are tax relieved. These are of substantial benefit to charities already.

Róisín Shortall (Dublin North West, Labour)
Link to this: Individually | In context

Question 154: To ask the Minister for Finance his views on the implications for the Exchequer of the expected ruling of the European Court of Justice on the duty levied on goods bought in other EU states and delivered directly to the home owner and that consumers should only pay the duty levied in the country of origin; the estimated cost to the Exchequer of this ruling in loss of excise duties; and if he will make a statement on the matter. [39237/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

The court has not yet made its ruling in the case and therefore it is best at this stage to await the ruling and examine it fully before commenting any further.

Willie Penrose (Westmeath, Labour)
Link to this: Individually | In context

Question 155: To ask the Minister for Finance if his attention has been drawn to the recent study from the Combat Poverty Agency which shows that the increasing levels of indirect taxation is having a disproportionate effect on those on lower incomes; the efforts he is making to ensure that those on low incomes receive sufficient supports to deflect the impact of these indirect taxes; and if he will make a statement on the matter. [37599/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

I reject entirely the assertion that the indirect tax system has a disproportionate effect on those on lower incomes. A simple look at the facts will show that the conclusions in the report are misdirected.

Firstly, there is no VAT on the main low income items such as food, oral medicines, childrens' shoes and clothing.

Secondly, most excise revenue (60%) comes from excises on petrol, diesel and cars. These are not items that low income groups spend most on. As for the remaining 40% of excise revenue, this comes from duties on tobacco and alcohol where there are solid health grounds for using the tax system to discourage consumption.

Thirdly, there are special reliefs in the VAT and Excise system for medical and other equipment for the disabled. There is no VAT on public transport and diesel used in buses and trains is subject to reduced rates of excise. Most public services are not liable to VAT.

Furthermore it is simply wrong to claim that we are relying more on indirect taxation now than in the past as the following table will show.