Written answers
Thursday, 27 May 2010
Department of Finance
Tax Code
5:00 pm
Joan Burton (Dublin West, Labour)
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Question 66: To ask the Minister for Finance the estimate of the potential Exchequer yield on a 2011 and full year basis of increasing the rate of capital acquisitions tax by 1%, 2%, 3%, 4%, 5%, 6%, 7%, 8%, 9% and 10%; the potential Exchequer yield on a 2011 and full year basis of reducing the relevant thresholds in each case by 5%, 10%, 15%, 20%, 25%, 30%, 35%, 40%, 45% and 50% at both the current rate and at each of the higher rates previously cited; and if he will make a statement on the matter. [22422/10]
Brian Lenihan Jnr (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%, 5%, 6%, 7%, 8%, 9% or 10%, based on the Budget estimate of â¬240 million for 2010, could be in the region of â¬9.5 million, â¬19 million, â¬29 million, â¬38 million, â¬48 million, â¬58 million, â¬67 million, â¬77million, â¬86 million and â¬96 million respectively. I am advised by the Revenue Commissioners that the estimated full year gains to the Exchequer from reducing the thresholds for Capital Acquisitions Tax by the stated amounts are as set out in the following table. These estimates are based on transactions recorded in 2009.
The Exchequer yield in the first year of implementation of any such changes would depend on the timing of the changes. It is assumed in the current estimates that the first year yield would be of the order of 85% of the corresponding full year amounts. It should be noted that these estimates are based upon an assumption that there would be no behavioural impact of the changes, which could lead to a lesser, or in some circumstances, greater than expected impact on Exchequer yield. 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.
| All thresholds reduced by | Yield at current rate of CAT (25%) | Yield at 26% (1% rate increase) | Yield at 27% (2% rate increase) | Yield at 28% (3% rate increase) | Yield at 29% (4% rate increase) | Yield at 30% (5% rate increase) | Yield at 31% (6% rate increase) | Yield at 32% (7% rate increase) | Yield at 33% (8% rate increase) | Yield at 34% (9% rate increase) | Yield at 35% (10% rate increase) |
| â¬m | â¬m | â¬m | â¬m | â¬m | â¬m | â¬m | â¬m | â¬m | â¬m | â¬m | |
| 5% | 10.8 | 11.2 | 11.6 | 12.1 | 12.5 | 12.9 | 13.3 | 13.8 | 14.2 | 14.6 | 15.1 |
| 10% | 21.5 | 22.4 | 23.3 | 24.1 | 25.0 | 25.8 | 26.7 | 27.6 | 28.4 | 29.3 | 30.1 |
| 15% | 32.3 | 33.6 | 34.9 | 36.2 | 37.5 | 38.8 | 40.0 | 41.3 | 42.6 | 43.9 | 45.2 |
| 20% | 43.1 | 44.8 | 46.5 | 48.2 | 50.0 | 51.7 | 53.4 | 55.1 | 56.8 | 58.6 | 60.3 |
| 25% | 53.8 | 56.0 | 58.1 | 60.3 | 62.4 | 64.6 | 66.7 | 68.9 | 71.1 | 73.2 | 75.4 |
| 30% | 64.6 | 67.2 | 69.8 | 72.3 | 74.9 | 77.5 | 80.1 | 82.7 | 85.3 | 87.8 | 90.4 |
| 35% | 75.4 | 78.4 | 81.4 | 84.4 | 87.4 | 90.4 | 93.4 | 96.5 | 99.5 | 102.5 | 105.5 |
| 40% | 86.1 | 89.6 | 93.0 | 96.5 | 99.9 | 103.3 | 106.8 | 110.2 | 113.7 | 117.1 | 120.6 |
| 45% | 96.9 | 100.8 | 104.6 | 108.5 | 112.4 | 116.3 | 120.1 | 124.0 | 127.9 | 131.8 | 135.6 |
| 50% | 107.7 | 112.0 | 116.3 | 120.6 | 124.9 | 129.2 | 133.5 | 137.8 | 142.1 | 146.4 | 150.7 |
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