Written answers
Thursday, 8 May 2008
Department of Finance
Tax Code
5:00 pm
Róisín Shortall (Dublin North West, Labour)
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Question 118: To ask the Minister for Finance if, in respect of Appendix D of the Green Paper on Pensions, he will provide the same information in respect of PRSAs and RACs for 2005 and subsequent years; if he will provide details of the work ongoing to garner similar information in respect of other pension holders and the details similar to Appendix D for the years that are available; and if he will make a statement on the matter. [17912/08]
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am informed by the Revenue Commissioners that the latest relevant information available is in respect of income tax relief allowed for contributions to Retirement Annuity Contracts (RACs) and Personal Retirement Savings Accounts (PRSAs) for the income tax year 2005. RACs and PRSAs are available to the self-employed and to employees not in occupational pension schemes.
The information is set out in tables following this reply which provide the number of cases, amount of deduction and reduction in tax for tax relief for RACs and PRSAs for the various contribution ranges. The information is based on income returns contained in Revenue records at the time the data were compiled for analytical purposes, representing about 98.5 % of all returns expected. A married couple who has elected or has deemed to have elected for joint assessment is counted as one tax unit.
It is not possible to provide corresponding figures in regard to the take-up of the tax relief for pension contributions by employers and employees to occupational pension 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 from 2006 on. These changes have yielded additional information regarding the overall cost of tax relief for pension contributions but as the returns are aggregated at employer level they cannot provide a precise basis for measuring the potential impact on the Exchequer of proposals for changes at individual level or enable a distribution of pension tax relief across the different income cohorts to be provided.
| INCOME TAX 2005 | ||||||
| Retirement Annuity — by range of Gross Income. | ||||||
| Range of gross income | Totals | |||||
| From | To | Number of cases | Amount of deduction | Reduction in tax | Gross Tax* | Reduction in tax as % of Gross Tax |
| € | € | € | € | € | % | |
| — | 9,000 | 1,008 | 1,881,903 | 75,498 | 82,740 | 91.2 |
| 9,000 | 10,000 | 265 | 374,631 | 30,386 | 33,229 | 91.4 |
| 10,000 | 12,000 | 657 | 1,025,582 | 134,741 | 190,034 | 70.9 |
| 12,000 | 15,000 | 1,392 | 2,392,161 | 350,206 | 679,108 | 51.6 |
| 15,000 | 17,000 | 1,323 | 2,233,300 | 352,112 | 842,250 | 41.8 |
| 17,000 | 20,000 | 2,589 | 4,780,514 | 816,857 | 2,287,102 | 35.7 |
| 20,000 | 25,000 | 5,651 | 11,087,382 | 2,080,370 | 7,539,642 | 27.6 |
| 25,000 | 27,000 | 2,715 | 5,668,769 | 1,098,028 | 4,696,639 | 23.4 |
| 27,000 | 30,000 | 4,381 | 9,484,765 | 1,880,533 | 9,069,509 | 20.7 |
| 30,000 | 35,000 | 7,751 | 18,261,845 | 4,705,878 | 22,318,537 | 21.1 |
| 35,000 | 40,000 | 7,780 | 20,674,562 | 6,003,555 | 30,473,740 | 19.7 |
| 40,000 | 50,000 | 14,363 | 45,816,794 | 14,547,614 | 79,144,477 | 18.4 |
| 50,000 | 60,000 | 12,398 | 48,880,951 | 15,565,254 | 95,469,140 | 16.3 |
| 60,000 | 75,000 | 14,057 | 70,245,866 | 25,617,798 | 155,121,844 | 16.5 |
| 75,000 | 100,000 | 13,615 | 99,961,110 | 40,744,562 | 235,383,899 | 17.3 |
| 100,000 | 150,000 | 9,892 | 125,055,147 | 52,235,223 | 295,482,218 | 17.7 |
| 150,000 | 200,000 | 3,705 | 81,437,198 | 34,165,790 | 184,174,412 | 18.6 |
| 200,000 | 250,000 | 2,240 | 67,483,762 | 28,305,769 | 153,550,523 | 18.4 |
| Over | 250,000 | 5,532 | 278,887,354 | 117,075,544 | 832,516,852 | 14.1 |
| Totals | 111,314 | 895,633,596 | 345,785,718 | 2,109,055,895 | 16.4 | |
| *"Gross tax" means the tax that would be due before relief is allowed for retirement annuity deductions. |
| INCOME TAX 2005 | ||||||
| Personal Retirement Savings Accounts — by range of Gross Income. | ||||||
| Range of gross income | Totals | |||||
| From | To | Number of cases | Amount of deduction | Reduction in tax | Gross Tax* | Reduction in tax as % of Gross Tax |
| € | € | € | € | € | % | |
| — | 9,000 | 99 | 131,880 | 1,331 | 1,655 | 80.4 |
| 9,000 | 10,000 | 36 | 44,781 | 4,764 | 5,745 | 82.9 |
| 10,000 | 12,000 | 59 | 85,072 | 11,937 | 17,987 | 66.4 |
| 12,000 | 15,000 | 150 | 233,336 | 32,587 | 63,085 | 51.7 |
| 15,000 | 17,000 | 149 | 223,139 | 38,841 | 91,737 | 42.3 |
| 17,000 | 20,000 | 309 | 508,353 | 91,482 | 285,601 | 32.0 |
| 20,000 | 25,000 | 672 | 1,222,950 | 234,106 | 964,971 | 24.3 |
| 25,000 | 27,000 | 341 | 633,141 | 121,908 | 658,814 | 18.5 |
| 27,000 | 30,000 | 468 | 909,837 | 182,962 | 1,146,859 | 16.0 |
| 30,000 | 35,000 | 784 | 1,885,268 | 550,654 | 2,586,331 | 21.3 |
| 35,000 | 40,000 | 748 | 2,020,822 | 673,858 | 3,504,921 | 19.2 |
| 40,000 | 50,000 | 1,231 | 3,918,871 | 1,331,798 | 7,816,522 | 17.0 |
| 50,000 | 60,000 | 1,010 | 4,258,348 | 1,460,433 | 8,867,772 | 16.5 |
| 60,000 | 75,000 | 1,152 | 5,832,227 | 2,224,524 | 13,755,660 | 16.2 |
| 75,000 | 100,000 | 1,143 | 8,357,350 | 3,448,343 | 20,731,795 | 16.6 |
| 100,000 | 150,000 | 914 | 10,057,040 | 4,219,484 | 28,241,781 | 14.9 |
| 150,000 | 200,000 | 302 | 5,161,334 | 2,166,660 | 15,221,998 | 14.2 |
| 200,000 | 250,000 | 157 | 3,749,842 | 1,572,734 | 10,862,836 | 14.5 |
| Over | 250,000 | 282 | 9,359,602 | 3,931,033 | 39,741,329 | 9.9 |
| Totals | 10,006 | 58,593,193 | 22,299,439 | 154,567,399 | 14.4 | |
| "Gross tax" means the tax that would be due before relief is allowed for PRSA deductions |
Joan Burton (Dublin West, Labour)
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Question 119: To ask the Minister for Finance the progress in regard to the commitment given in the Programme for Government that the VAT classifications would be examined, with a view to reducing the rate of VAT applied to certain environmental goods and services. [17925/08]
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Programme for Government contains a commitment to examine the scope for reducing the VAT rate on environmental goods and services from the standard VAT rate of 21 per cent to the reduced rate of 13.5 per cent. I should mention that this is just one of a number of initiatives in the Programme aimed at delivering a cleaner environment.
When considering a change in the VAT treatment of a good or service, it is important to bear in mind that the scope for such change is derived from EU law with which Irish VAT law must comply. In this regard, the rate of VAT that applies to a particular good or service is determined by the nature of the good or service, and not by the environmental impact of the good or service. There is no provision in European VAT law that would allow the application of a reduced VAT rate on supplies of goods or services based on their environmental impact per se. However, at Community level, we support calls for the Commission to examine the potential use of reduced VAT rates in promoting environmentally friendly goods and services.
I would of course draw to the Deputy's attention that in the 2008 Finance Act the VAT rate on the supply of miscanthus rhizomes, seeds bulbs and similar inputs used for the agricultural production of biofuels was reduced from 21% to 13.5% with effect from 1 March 2008. This measure will assist in the development of agricultural production of such fuels.
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