Leo Varadkar (Dublin West, Fine Gael)
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Question 130: To ask the Minister for Finance the cost of introducing a new tax band of 10% for the first €5,000 earned for single people and €10,000 earned for couples; and if he will make a statement on the matter. [18647/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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If what the Deputy has in mind is the taxation at 10 per cent of portions of the bands currently taxable at 20 per cent, the full-year cost to the Exchequer, by reference to the income tax year 2008, is estimated by the Revenue Commissioners to be about €690 million. This cost is estimated on the basis that the thresholds for the proposed new tax bands would not alter the existing standard rate cut-off point applying to single and widowed persons, lone parents and married couples.

If, however, the existing 20 per cent bands were to apply in addition to the 10 per cent bands suggested by the Deputy, the cost would be substantially higher, and is estimated by Revenue to be in excess of €1.5 billion in a full year.

Given the current band structures, there would be major issues to be worked out as to how, in practice, such a new rate could be integrated into the current system and how this would affect the relative position of different types of income earners. These figures are provisional and subject to revision.