Róisín Shortall (Dublin North West, Labour)
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Question 119: 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; if he proposes to keep such tax bands or credits in line with inflation; and if he will make a statement on the matter. [29591/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Using the data in the Pre-Budget 2008 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 €135 million in a full year. 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.

As regards possible increases in the tax bands and credits in line with inflation, it is a long-standing practice of the Minister for Finance not to comment in advance of the Budget on any tax or expenditure matters that might be the subject of Budget decisions. I do not propose to depart from this practice.