Peter Mathews (Dublin South, Fine Gael)
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Question 68: To ask the Minister for Finance his views on a proposal to amend the taxation system (details supplied); and if he will make a statement on the matter. [15358/12]

Michael Noonan (Limerick City, Fine Gael)
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The position is that a review of the Universal Social Charge (USC) was conducted by officals from my Department, with the assistance of Revenue officials, in advance of Budget 2012. This review fulfilled the commitment contained in the Programme for Government. Following the review, I decided to increase the exemption threshold for the USC from €4,004 to €10,036 per annum for 2012. This measure will cost in the region of €47 million in a full year and will remove an estimated 330,000 people from the charge. While this is a significant cost, I do not expect it to result in a reduced yield for the Exchequer because of the move to a cumulative basis of deduction and payment by the Revenue Commissioners from 1 January 2012 that will save a similar amount by avoiding the occurrence of underpayments of the USC. The Review of the Universal Social Charge was published on my Department's website in January of this year and can be obtained at www.finance.gov.ie.

I do not intend to allow for a situation whereby unused income tax credits can be offset against an individual's liability to the USC or to increase the exemption threshold further as it would not only be very costly but would be counter to the rationale of the USC which is designed to widen the tax base, raise revenue and simplify the taxation system.