Michael McGrath (Cork South Central, Fianna Fail)
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Question 115: To ask the Minister for Finance the amount by which he expects VAT and PRSI receipts to fall short of budget 2011 expectations for the period 1 July 2011 to 31 December 2011 as a result of the measures in the jobs initiative; the amount he expects to receive from the pension levy in the same period, and the overall impact on the Exchequer returns for 2011 [22298/11]

Michael Noonan (Limerick City, Fine Gael)
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The Jobs Initiative is designed to be funded on a budgetary neutral basis over the 2011 – 2014 period. The introduction of a reduced 9% VAT rate is expected to cost €120 million this year and the PRSI measures enacted as part of the Jobs Initiative are expected to cost €95 million in 2011. It should be noted that PRSI receipts are not received directly by the Exchequer as part of tax revenues, but are instead used to fund social welfare-related expenditure. The abolition of the Air Travel Tax is expected to cost €15 million this year. Total additional current expenditure to specified areas in 2011 arising from the Jobs Initiative will amount to €29 million, €18 million of which will be funded by the reallocation of existing resources and €11 million from the introduction of the levy on pension funds. Total additional capital expenditure to specified areas arising from the Jobs Initiative will amount to €135 million in 2011 which will be funded by the reallocation of €106 million from within existing resources and €29 million from the pension levy. The temporary Pension Levy being introduced to fund the Jobs Initiative is projected to yield €470 million this year. Therefore, in overall terms, there is a small net gain to the Exchequer in 2011 from the measures introduced as part of the Jobs Initiative. Over the 2011 – 2014 period as a whole, the Jobs Initiative will be budgetary neutral. The Department of Finance has not revised it aggregate tax forecast for this year. However, it will continue to closely monitor the performance of tax receipts during the remainder of the year.