Richard Bruton (Dublin North Central, Fine Gael)
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Question 172: To ask the Minister for Finance if his attention has been drawn to the fact that the tax treatment of a personal retirement savings account pension contribution is less favourable than a standard pension contribution in respect of the application of certain levies; and his views on providing an amendment to offer a level playing field. [45687/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The position is that the income levy applies to all emoluments of an employment, including anything treated as a taxable benefit-in-kind. Income levy is applied to aggregate income before granting relief in respect of losses, capital allowances or pension contributions. In this regard an individual's personal contributions to a personal retirement savings account (PRSA), personal pension contribution, additional voluntary contribution or a retirement annuity contribution is disregarded for the purposes of determining the income levy that an individual must pay.

In addition, an employer contribution to a personal retirement savings account (PRSA) is chargeable to income tax in the hands of the employee as a benefit-in-kind under section 118 of the Taxes Consolidation Act 1997. As the income levy treatment follows the income tax treatment, the employer's contribution to the personal retirement savings account will also be subject to the income levy.

Section 778 of the Taxes Consolidation Act 1997, provides that an employer contribution made to an approved retirement benefit scheme or a statutory scheme is not treated as a benefit-in-kind for income tax purposes. Again, as the income levy treatment follows the income levy treatment, any employer's contribution to such schemes will not be subject to income levy.

I should point out that it is a longstanding practice of the Minister for Finance not to comment in advance of the Budget on any tax or expenditure matters that might be the subject of Budget decisions.