Brian O'Shea (Waterford, Labour)
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Question 105: To ask the Tánaiste and Minister for Finance the estimated annual cost of indexing tax bands and personal and employee tax credits to the average rise in wages each year; and if he will make a statement on the matter. [17166/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Using the data in the income tax ready reckoner, each 1% increase in the value of the main personal credits (basic personal credit and employee credit) and the tax bands would cost about €120 million in a full year. If the Deputy wishes to estimate costs for future years, he could apply this indicative figure to the pay increases set out in Towards 2016 or to forecasts for wages growth published by the European Commission in its Autumn 2006 Economic Forecast or the Quarterly Economic Commentary published by the ESRI in March 2007.

The costs quoted are provisional, subject to revision and estimated to the nearest €5 million. The ready reckoner is available on my Department's website, at www.finance.gov.ie.