Leo Varadkar (Dublin West, Fine Gael)
Link to this: Individually | In context

Question 136: To ask the Minister for Finance the amount of revenue that would be raised by reducing the single person tax credit by €100 and the married couple tax credit by €200. [9649/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

I am informed by the Revenue Commissioners that the full year yield to the Exchequer, estimated by reference to 2009 incomes, of reducing the single person tax credit by €100 and the married couple tax credit by €200 would be of the order of €200 million. The yield quoted is provisional and subject to revision.

Leo Varadkar (Dublin West, Fine Gael)
Link to this: Individually | In context

Question 137: To ask the Minister for Finance the amount of revenue that would be raised by paying mortgage interest relief at the standard rate only. [9650/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

In Budget 2009 the rate of mortgage interest relief was increased for first-time buyers from 20% to 25% in year 1 and 2 of their mortgage and to 22.5% in year 3 to 5 and maintained at 20% in year 6 and 7. The rate for non-first time buyers was reduced from 20% to 15%.

The aim of this measure was to refocus mortgage interest relief towards home owners who are in most need of assistance. This measure was broadly revenue neutral. A reversal of this measure would also be broadly revenue neutral.

Leo Varadkar (Dublin West, Fine Gael)
Link to this: Individually | In context

Question 138: To ask the Minister for Finance the amount of revenue that would be raised by abolishing mortgage interest relief. [9651/09]

Leo Varadkar (Dublin West, Fine Gael)
Link to this: Individually | In context

Question 139: To ask the Minister for Finance the amount of revenue that would be raised by restricting mortgage interest relief to first time buyers only. [9652/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

I propose to take Questions Nos. 138 and 139 together.

I am informed by the Revenue Commissioners that the full year yield to the Exchequer of abolishing mortgage interest relief, estimated by reference to 2009, would be of the order of €560 million. The corresponding yield from restricting mortgage interest relief to first-time buyers is estimated at €140 million.

Leo Varadkar (Dublin West, Fine Gael)
Link to this: Individually | In context

Question 140: To ask the Minister for Finance the amount of revenue that would be raised by abolishing mortgage interest relief in respect of rental properties. [9653/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

2057I am informed by the Revenue Commissioners that based on personal income tax returns filed by non-PAYE taxpayers for the year 2007, the estimated amount of tax foregone by allowing a deduction for interest on borrowings to be offset against rents assessable under Case V, Schedule D is of the order of €877 million. This estimate is based on assuming that tax relief was allowed at the top income tax rate of 41% and the figure provided could therefore be regarded as the maximum Exchequer cost in respect of those taxpayers.

The nominal yield of €877 million to the Exchequer from abolition of the relief may not be immediate depending on whether there is sufficient taxable rental income in the year of abolition to absorb it. Some increased taxable rental income arising from the abolition of interest relief may be offset by capital allowances and losses brought forward from prior years. The current downturn in the property market is also likely to have had a negative impact on rental activity since 2007 and a consequent negative impact on the nominal yield from abolition of the relief.

It should be noted that any corresponding data returned by PAYE taxpayers in the income tax return form 12 is not captured in the Revenue computer system. However, any PAYE taxpayer with non-PAYE income greater than €3,174 is required to complete an income tax return form 11. This return is the source of the figures provided in this reply. Company returns of rental income are net of interest on borrowings and the figures for interest are not separately distinguished in those returns.

Leo Varadkar (Dublin West, Fine Gael)
Link to this: Individually | In context

Question 141: To ask the Minister for Finance the amount of revenue that would be raised by abolishing tax relief in respect of trade union subscriptions. [9654/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

I am informed by the Revenue Commissioners that the most recent year for which the necessary detailed information is available regarding tax relief for trade union subscriptions is the income tax year 2005 in which the cost to the Exchequer is estimated at approximately €11.8 million. On this basis the full year yield to the Exchequer of abolishing tax relief for trade union subscriptions would be of the same order.

Leo Varadkar (Dublin West, Fine Gael)
Link to this: Individually | In context

Question 142: To ask the Minister for Finance the amount of revenue that would be raised by abolishing the business expansion scheme. [9655/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

I am informed by the Revenue Commissioners that the last full year for which the cost of the Business Expansion Scheme is available is 2008, when the cost was estimated at approximately €56 million. Therefore, based on the 2008 figure, the likely full year saving from the abolition of the BES would be about €56 million.

Leo Varadkar (Dublin West, Fine Gael)
Link to this: Individually | In context

Question 143: To ask the Minister for Finance the amount of revenue that would be raised by allowing tax relief in respect of pension contributions at the standard rate only. [9656/09]

Leo Varadkar (Dublin West, Fine Gael)
Link to this: Individually | In context

Question 144: To ask the Minister for Finance the amount of revenue that would be raised by abolishing income tax relief in respect of pension contributions. [9657/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

I propose to take Questions Nos. 143 and 144 together.

I assume that the Deputy is referring to individual pension contributions, the tax relief on which is allowed at the taxpayer's marginal tax rate, that is, at the standard or higher rate of income tax as appropriate in each case.

A breakdown of the cost of tax relief on employee contributions to occupational pension schemes is not available by income tax rate, as tax returns by employers to the Revenue Commissioners of employee contributions to such schemes are aggregated at employer level. An historical breakdown is available by tax rate of the tax relief claimed on contributions to personal pension plans — Retirement Annuity Contracts (RACs) and Personal Retirement Savings Accounts (PRSAs) — by the self-employed and others, to the extent that the contributions have been included in the personal tax returns of those taxpayers. The latest full historical data available in this regard is in respect of the tax year 2005.

There is, therefore, no statistical basis for providing definitive figures. However, by making certain assumptions about the available information, it is estimated that the full year yield to the Exchequer from confining tax relief to the standard rate of 20% in respect of individual contributions to occupational pension schemes, RACs and PRSAs would be about €500 million. The full year yield from abolishing the tax relief is estimated at over €1 billion.

As highlighted in the "Green Paper on Pensions", where tax relief arrangements are of such significance, as in this instance, the removal of the reliefs would represent a fundamental adjustment to the current balance of the tax system and would have very significant implications in terms, among other things, of the economic and behavioural impacts which would ensue. These impacts would be difficult to model in advance. For these reasons, the real informational content of these costings of tax reliefs is limited and should be treated with some caution.