Richard Bruton (Dublin North Central, Fine Gael)
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Question 224: To ask the Minister for Finance if the new levy which has been introduced is deductible before the calculation of income tax; if he has received legal advice on whether double taxation of income taken in levies breaches the principle of natural justice; and if he will make a statement on the matter. [4468/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I understand the Deputy is referring to the income levy which took effect from 1 January 2009. The position is that the income levy applies to gross income and constitutes an additional tax.

The income base on which the income levy is applied is different to that of income tax or, indeed Pay Related Social Insurance (PSRI) contributions and health levy contributions. Gross income in the context of the income levy is income before any deductions for contributions to superannuation or capital allowances. Also included in the income base for the income levy are a number of income sources excluded from the income tax base. The income levy applies generally to all taxpayers and is progressive. In these circumstances, the issue of whether the overall system breaches the principle of natural justice does not arise.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Question 226: To ask the Minister for Finance the proposals to increase betting tax in betting shops from 1% to 2%; when this will be introduced; the expected revenue to be generated; the impact this will have on unemployment in the industry; and if he will make a statement on the matter. [4474/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I announced in Budget 2009 that the betting duty would be increased from 1 to 2%. Subsequently, I met a wide range of representatives from the betting industry where the problems faced by the sector, including those arising from the Budgetary changes, were discussed.

The Finance (No. 2) Act 2008 provides that the betting duty rate will be increased from 1% to 2% on 1 May 2009. The Act also provides that, as happens in the case of other business expenses, betting duty paid by a bookmaker on bets made on or after 1 January 2009 will be allowed as a deduction in computing the amount of profits or losses of the bookmaking business for Income Tax or Corporation Tax purposes.

As I stated during the Finance Bill process, I intend to look at an overhaul of the betting tax regime for next year's Budget and Finance Bill, possibly looking at the UK's gross profits tax model. The estimated yield arising from the 1% increase in the betting duty on 1 May 2009 is around €14m in 2009 and €33m in a full year.