Written answers

Tuesday, 3 November 2009

8:00 pm

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Question 260: To ask the Minister for Finance the expected yield in 2010 from an increase in the standard rate of tax by 1%, 2%, 3%, 4% or 5%; and if he will make a statement on the matter. [38054/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Minister, Department of Finance; Dublin West, Fianna Fail)
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I am informed by the Revenue Commissioners that the full year yield to the Exchequer, estimated by reference to 2010 incomes, of changing the standard rate of tax by 1%, 2%, 3%, 4% or 5% would be approximately €420 million, €840 million, €1,260 million, €1,680 million and €2,100 million respectively.

The figures are estimates from the Revenue tax-forecasting model using actual data for the year 2007 adjusted as necessary for income and employment trends for the year 2010. They are therefore provisional and likely to be revised.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Question 261: To ask the Minister for Finance the expected yield in 2010 from an increase in the higher rate of tax by 1%, 2%, 3%, 4% or 5%; and if he will make a statement on the matter. [38055/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Minister, Department of Finance; Dublin West, Fianna Fail)
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I am informed by the Revenue Commissioners that the full year yield to the Exchequer, estimated by reference to 2010 incomes, of changing the higher rate of tax by 1%, 2%, 3%, 4% or 5% would be approximately €145 million, €290 million, €435 million, €580 million and €725 million respectively.

The figures are estimates from the Revenue tax-forecasting model using actual data for the year 2007 adjusted as necessary for income and employment trends for the year 2010. They are therefore provisional and likely to be revised.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Question 262: To ask the Minister for Finance the expected yield in 2010 from a reduction in the personal income tax credit of €100; and if he will make a statement on the matter. [38056/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Minister, Department of Finance; Dublin West, Fianna Fail)
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I am informed by the Revenue Commissioners that the full year yield to the Exchequer, estimated by reference to 2010 incomes, of reducing the single person tax credit by €100 would be of the order of €155 million. The reduction mentioned in the Deputy's question is assumed to apply in similar measure to widowed persons and to include the normal consequential reductions in the tax credit for lone parents and the married tax credit.

The figures are estimates from the Revenue tax-forecasting model using actual data for the year 2007 adjusted as necessary for income and employment trends for the year 2010. They are therefore provisional and likely to be revised.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Question 263: To ask the Minister for Finance the expected yield in 2010 from introducing a tax at the rate of 1 cent per text on mobile phone texts; and if he will make a statement on the matter. [38065/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Minister, Department of Finance; Dublin West, Fianna Fail)
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Based on information available from ComReg, introducing a tax at the rate of 1 cent per text on mobile phone messaging would have a potential yield of €118 million.

However, this potential yield does not take account of any behavioural impact that might result if a levy was directly imposed on customers or imposed on the mobile phone companies and passed on to customers. It also ignores the very real difficulties presented in the development of such a tax in regard to collection and coverage.

Also, it should be noted that VAT is charged at 211⁄2% on mobile phone transactions.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Question 264: To ask the Minister for Finance the expected yield in 2010 from the imposition of a cap of €50,000 on the artists exemption; and if he will make a statement on the matter. [38066/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Minister, Department of Finance; Dublin West, Fianna Fail)
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It is assumed that the imposition of a cap of €50,000 as mentioned in the question would have the effect of withdrawing the tax exemption from all qualifying income in excess of €50,000. On this basis, I am advised by the Revenue Commissioners that the full year yield to the Exchequer, estimated by reference to the claims for the exemption made in income tax returns for the tax year 2007, the latest year for which the necessary detailed information is available, could be of the order of €20 million.

However, it must be stressed that this estimate assumes no significant behavioural change on the part of the affected taxpayers and therefore may not be an accurate measure of the yield that would actually be obtained. Moreover, the application of income tax to this income source could also lead to deductions for allowable expenses, personal allowances and other relevant costs, thereby reducing the level of income that would actually be subject to tax.

It should be noted that the exemption of certain earnings of writers, composers and artists is already affected by the measures to restrict the use of tax reliefs and exemptions by higher income earners, which was provided for in section 17 of the Finance Act 2006 and which took effect from 1 January 2007.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Question 265: To ask the Minister for Finance the expected yield in 2010 from the introduction of a new rate of tax of 48% on individual incomes of more than €100,000 and married couple incomes of more than €200,000; and if he will make a statement on the matter. [38061/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Minister, Department of Finance; Dublin West, Fianna Fail)
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It is assumed that the threshold for the proposed new tax band mentioned by the Deputy would not alter the existing standard rate band structure applying to single and widowed persons, to lone parents and married couples.

I am advised by the Revenue Commissioners that the estimated full year yield to the Exchequer, estimated by reference to 2010 incomes, of the introduction of a new 48% rate would be of the order of €355 million. Given the current band structures, major issues would need to be resolved 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.

This figure is an estimate from the Revenue tax-forecasting model using actual data for the year 2007, adjusted as necessary for income and employment trends for the year 2010. It is therefore provisional and likely to be revised.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Question 267: To ask the Minister for Finance the expected yield in 2010 from the abolition of tax relief on trade union subscriptions; and if he will make a statement on the matter. [38067/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Minister, Department of Finance; Dublin West, Fianna Fail)
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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 2006, in which the cost to the Exchequer is estimated at approximately €19 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, although it should be noted that the value of the relief was increased from €300 to €350 in Budget 2008. At that time, it was estimated that the increase in the relief would cost approximately €3 million in a full year.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Question 268: To ask the Minister for Finance the expected yield in 2010 from increasing the rate of capital acquisitions tax by 1%, 2%, 3%, 4% or 5%; and if he will make a statement on the matter. [38063/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Minister, Department of Finance; Dublin West, Fianna Fail)
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I am advised by the Revenue Commissioners that the estimated full year yield to the Exchequer from increasing the Capital Acquisitions Tax rate by 1%, 2%, 3%, 4% or 5% could be in the region of €10 million, €20 million, €30 million, €40 million and €50 million respectively.

However, it should be noted that this estimate is based upon an assumption that there would be no behavioural impact of such an increase, which could lead to a less than expected result from a change to the tax rate. In addition, the realisation of any estimated yield from an increase in taxation on assets relating to property is subject to movements in the value of such assets, which are currently occurring in the economy.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Question 269: To ask the Minister for Finance the expected yield in 2010 from increasing the rate of capital gains tax by 1%, 2%, 3%, 4% or 5%; and if he will make a statement on the matter. [38064/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Minister, Department of Finance; Dublin West, Fianna Fail)
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I am advised by the Revenue Commissioners that estimates of the full year cost to the Exchequer of tax reliefs for heritage items and property are contained in section 11 of Part 8 of the Commission on Taxation Report and are reproduced in the following table.

Heritage ReliefYearCost €m
Payment of tax by means of donation of heritage items20085
Payment of tax by means of donation of heritage property to the Irish heritage trust20084
Income tax relief for expenditure on heritage buildings and gardens20066
BIK exemption for employer–provided art objects in a heritage building or gardenNot available
CAT exemption for heritage property and heritage property of companies2003200810

On this basis, the full year yield to the Exchequer of abolishing these reliefs would be of the same order.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Question 270: To ask the Minister for Finance the expected yield in 2010 from increasing the rate of capital gains tax by 1%, 2%, 3%, 4% or 5%; and if he will make a statement on the matter. [38064/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Minister, Department of Finance; Dublin West, Fianna Fail)
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I am informed by the Revenue Commissioners that the estimated full year gain from increasing the rate of Capital Gains Tax (CGT) by 1%, 2%, 3%, 4% or 5% could be in the region of €13 million, €25 million, €38 million, €50 million and €63 million respectively, assuming no significant behavioural change on the part of taxpayers.

CGT is very dependent on individual behaviour and a change in rate may not produce a corresponding increase or decrease in tax yield. In current economic conditions any estimate of additional yield must be treated with caution. In addition increasing the rate could, in theory, lead to a reduction in yield from the tax.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Question 271: To ask the Minister for Finance the expected yield in 2010 from the imposition of a cap of €200,000 on public sector salaries; and if he will make a statement on the matter. [38069/09]

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Question 272: To ask the Minister for Finance the expected yield in 2010 from the imposition of a cap of €175,000 on public sector salaries; and if he will make a statement on the matter. [38070/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Minister, Department of Finance; Dublin West, Fianna Fail)
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I propose to take Questions Nos. 271 and 272 together.

It is estimated that if a cap was imposed on public sector salaries at €200,000 it would yield savings in the region of €30m on a full year basis, while it is estimated that a similar cap on salaries at €175,000 would produce savings of the order of €85M on an annual basis.

By far the most significant group encompassed by the suggested salary caps is the hospital consultants. A new contract for this group was agreed in 2008 and has been implemented during the current year. Salary rates under the new contract arrangements are determined by the options taken by the consultants in their assimilation to the new contractual arrangements. The savings indicated reflect the options exercised in 2009 by the consultants under the new contractual arrangements and are estimated on base salary only. If the caps were to be applied to all earnings and not just salary, the savings would be higher. Any savings accruing on the public sector paybill would be offset to an extent by consequential tax revenue forgone.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Question 273: To ask the Minister for Finance the expected yield in 2010 from increasing the public sector pension levy by 1% on salaries between €150,000 and €200,000; and if he will make a statement on the matter. [38071/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Minister, Department of Finance; Dublin West, Fianna Fail)
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The yield would depend on how an increase was applied. The estimated yield in 2010 through the application of an increase of an additional 1% in the pension levy on all earnings in the case of those on salaries between €150,000 and €200,000 would be in the region of €2.5m. If the additional 1% were to be applied only to that element of salary in excess of €150,000 and up to €200,000 the annual yield would be less than €400,000.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Question 274: To ask the Minister for Finance the expected yield in 2010 from the abolition of performance related pay in the public sector, including the civil service and the Health Service Executive; and if he will make a statement on the matter. [38072/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Minister, Department of Finance; Dublin West, Fianna Fail)
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It is estimated that the abolition of performance related awards in the public service would yield approximately €8.0million in 2010.

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