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

Question 70: To ask the Minister for Finance if he will provide the breakdown by category of the €600 million carry forward of tax measures for the 2012 budget consolidation process highlighted in the medium term fiscal statement. [33920/11]

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

The main area which is expected to benefit in terms of additional revenues in 2012 from measures introduced in 2011 is income tax. As with all new income tax measures, the first year yield is expected to be significantly below the full-year yield for a number of reasons including the fact that a portion of the tax collected in the year in which a measure is introduced relates to earnings in the previous year and therefore does not benefit from the changes to the tax system.

The reductions to the tax credits, the reductions in the standard rate bands and the reductions in the age exemption limits implemented in 2011 are expected to generate an additional €0.3 billion in revenues in 2012 over the amounts these measures were estimated to generate in 2011. The tax revenue benefit in 2012 compared to 2011 from the abolition and restriction of various tax reliefs such as Rent Relief, Trade Union subscriptions relief, the relief on loans to acquire an interest in certain companies and the introduction of a ceiling on the tax exempt earnings of artists is estimated to be over €0.1 billion.

Changes to PRSI including the abolition of the €75,036 ceiling and the increase in the Class S rate are expected to generate close to another €0.1 billion in revenues in 2012 over 2011. Pensions related measures are also expected to generate approximately €0.1 billion more in receipts in 2012 than in 2011.

Other measures such as the increase in the rate of Deposit Interest Retention Tax (DIRT) and reduction in the group tax free Capital Acquisitions Tax thresholds are also expected to deliver a small amount of increased revenues in 2012 over 2011. The estimates of the sums that are expected to be realised from the carry-forward of measures introduced in 2011 will be updated further in the coming weeks in the run-up to Budget 2012.