Simon Harris (Wicklow, Fine Gael)
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Question 32: To ask the Minister for Finance the rationale for the discrepancy in the level of taxation applied to a packet of cigarettes compared to hand-rolling and other non-cigarette tobacco; and if he will make a statement on the matter. [32339/11]

Michael Noonan (Limerick City, Fine Gael)
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The practice when reviewing the level of tobacco taxation has been to determine the amount of any increase by reference to cigarettes, and to apply pro rata increases to other products such as fine-cut tobacco for the rolling of cigarettes and other smoking tobacco. In the case of the last increase in the tax rates, which was with effect from 8 April 2009, an increase of 25 cent (inclusive of VAT) was applied to a pack of cigarettes. This represented an increase of 4.12 per cent in the tobacco tax, and that increase was applied also to all other tobacco products. Tobacco products other than cigarettes are taxed by weight of tobacco, and the rate of tax on cigarettes is expressed as a fixed amount per 1,000 cigarettes, together with a percentage of the price at which the cigarettes are sold. When the tax rates for the various products are compared in terms of their weight of tobacco, the rate of taxation on cigarettes is higher than for the other products.

I am aware of calls from certain interests for the tax on other products to be increased relative to the tax on cigarettes. Any question of a change in the relative taxation of the products would fall to be considered in the Budget process.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Question 33: To ask the Minister for Finance the amount that would be saved to the Exchequer by bringing in new rates of income tax as follows 50% on all income between €100,000 and €150,000 per annum, 60% on all income between €150,000 and €200,000 per annum and 70% on all income above €200,000 per annum. [32342/11]

Michael Noonan (Limerick City, Fine Gael)
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It is assumed that the threshold for the proposed new tax bands 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 2012 incomes, of the introduction of the proposed new rates and bands would be of the order of €1,125 million. However, given the current band structures, major issues would need to be resolved as to how, in practice, such new rates could be integrated into the current system and how this would affect the relative position of different types of income earners.

These figures are estimates from the Revenue tax-forecasting model using actual data for the year 2009 adjusted as necessary for income and employment trends for the year 2012. They are therefore provisional and likely to be revised.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Question 34: To ask the Minister for Finance the amount that would be saved by the Exchequer by increasing the current minimum effective tax rate as follows 40% on all income between €125,000 and €175,000 per annum, 50% on all income between €175,000 and €225,000 per annum and 60% on all income above €225,000 per annum. [32343/11]

Michael Noonan (Limerick City, Fine Gael)
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It is assumed that the Deputy is referring to amending the tax regime for income earners to which the restriction of tax reliefs applies, i.e. those individuals that have an adjusted income of €125,000 or greater and claim specified reliefs of €80,000 or more. Those subject to the full restriction, at adjusted incomes of €400,000 or greater, pay an effective income tax rate of 30% in addition to PRSI and Universal Social Charge. On the basis of historical incomes and claims data available for 2009, the latest year for which the necessarily detailed information is available, it is tentatively estimated that the full year yield to the Exchequer from applying the measures mentioned in the question would be of the order of €120 million. The impact of the economic down turn on current personal incomes and potential claims for tax reliefs cannot be fully factored into the estimate of yield provided because the tax returns for 2010 and 2011 are not yet received. For this reason the figure of yield provided should be regarded as only indicative.

To impose the effective income tax rates suggested by the Deputy solely on those taxpayers that claim specified reliefs, would effectively penalise taxpayers for availing of those reliefs and incentives. Obviously this would make tax incentives redundant in terms of their potential for contributing to the achievement of the socio-economic objectives for which they were designed.

Taxpayers, who only claim personal tax credits, pay an effective rate of income tax of around 30% where their annual incomes are in the region of €125,000. To implement the rates suggested by the Deputy such that they would apply to all taxpayers, would involve the imposition of higher marginal rates of income tax and/or the reduction of the general tax credits available.