Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context

Question 162: To ask the Minister for Finance the cost to the Exchequer in 2010 and the expected cost in 2011 of providing income tax relief on pension contributions under existing legislation; the amount the corresponding figures would be if all pension contributions only attracted tax relief at the lower 20% rate; and if he will make a statement on the matter. [9740/11]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context

The table below provides a breakdown of the estimated cost of tax and PRSI reliefs relating to private pension contributions for 2008. I am informed by the Revenue Commissioners that 2008 is the year for which the most up-to-date data is available. Figures have been rounded where appropriate.

*Numbers as included in P35 returns from employers to Revenue for 2008. Figures are as verified to date but may be subject to revision.

**Numbers of employees for whom employers are contributing to occupational pension funds as included in P35 returns to Revenue for 2008. Figures are as verified to date but may be subject to revision.

I am advised by the Revenue Commissioners that while corresponding updates of the cost figures are not yet available for the 2009 tax year, the necessary work of assembling the basic data to enable this to be done is ongoing. No data is available for 2010 or 2011. As regards reducing tax relief to the standard rate of 20%, I assume the Deputy is referring to individual pension contributions, the tax relief on which is allowed at the taxpayer's marginal tax rate - 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 and personal retirement savings accounts - 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 2008. 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, retirement annuity contracts and personal retirement savings accounts would be approximately €500 million.

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context

Question 163: To ask the Minister for Finance his plans to progressively reduce the tax relief on pension contributions during the period 2012 to 2014 in line with the previous Government's national recovery plan 2011-14; and if he will make a statement on the matter. [9741/11]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context

The gradual reduction from marginal to standard rate tax relief on pension contributions commencing in 2012 forms part of the fiscal consolidation measures in the agreement with the EU, IMF and the ECB over the period 2011 to 2014. The Government has initiated a Comprehensive Review of Expenditure to provide it with a set of decision options to meet the overall fiscal consolidation objectives and realign spending with the programme for Government priorities. The review is due to be completed by the end of September 2011. When this review is complete, the Government will examine the findings. Based on the findings and in consultation with the EU, the IMF and the ECB, it will introduce fiscally neutral changes to the detail of the EU-IMF programme of financial support for Ireland while maintaining the overall commitment to fiscal consolidation. The scope for any change to the proposed standard rating of tax relief on pension contributions will be examined in that context.

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context

Question 164: To ask the Minister for Finance the position regarding the planned economic assessment of certain property-based tax reliefs; when the review will commence; the person who will carry out the review; when the review will be completed; and if he will make a statement on the matter. [9742/11]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context

As the Deputy will be aware, the programme for Government states that the Government will "reduce, cap or abolish property tax reliefs and other tax shelters which benefit very high income earners". A small team in my Department, in consultation with the Revenue Commissioners, is in the early stages of carrying out an economic impact assessment of possible changes to the property-based reliefs in line with the Government programme. This may need to be supplemented to a limited extent by some additional external expert advice. The results of the economic impact assessment will be considered in the context of the preparation of budget 2012.