Joan Burton (Dublin West, Labour)
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Question 246: To ask the Minister for Finance the number of persons claiming tax relief on pension contributions; the income category these individuals fall into; the value of the tax relief and the tax revenue foregone to the Exchequer; and if he will make a statement on the matter. [12860/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I assume the Deputy has in mind the estimated cost of tax relief on pension contributions by employers, employees and self-employed. I am informed by the Revenue Commissioners that the latest relevant figures available are in respect of the income tax year 2003. The total cost of tax relief on pensions contributions is tentatively estimated at approximately €1.456 billion. With the exception of the data on RACs and PRSAs below, the figures provided are not definitive costings and are based on various broad assumptions and parameters. The total figure is broken down as follows both in terms of numbers where available and in terms of costs.

With regard to occupational pensions, that is approved superannuation schemes set up by the employer, it should be noted that the cost figures in respect of employee and employer contributions are available only in aggregate form on a tentative basis. It is not possible to provide a breakdown across income categories in respect of the tax relief for pension contributions by employers and employees to occupational schemes as the relevant data are not captured in such a way as to make this possible.

Provisions were included in Finance Act 2004 with a view to improving data quality and transparency without overburdening taxpayers or employers. The Act includes provisions that require employers to provide data on superannuation contributions in the P35 form to be filed by employers in February 2006. These changes will yield additional information regarding the overall cost of tax relief for pension contributions but as the returns will be aggregated at employer level they will not provide a precise basis for measuring the potential impact on the Exchequer of proposals for changes at individual level. I am informed by the Revenue Commissioners that work on developing the necessary technical enhancements to their computer system to enable this data to be captured is ongoing.

I am further informed by the Revenue Commissioners that the only relevant information available by income category is in respect of income tax relief allowed for contributions to "Retirement Annuity Contracts" for the income tax year 2003, which are available to the self-employed and to employees not in occupational pension schemes. A distribution by income ranges of the number of cases, amount of deduction and reduction in tax for tax relief for Retirement Annuity Contracts is contained in the table that follows this reply.

The lower aggregate figures in the latter table (compared to the slightly higher figures for RACs in the opening table) are taken directly from filed income tax returns which represent about 98 per cent of all income tax returns expected for 2003. The higher figures in the initial table have, in accordance with normal practice, been grossed-up at aggregate level to adjust for this 2% incompleteness. A married couple who has elected or has deemed to have elected for joint assessment is counted as one tax unit.