Written answers

Thursday, 12 June 2014

Department of Finance

Universal Social Charge Application

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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52. To ask the Minister for Finance the effect on taxation revenue of introducing a new 48% taxation rate on all income over €100,000 per annum; and if he will make a statement on the matter. [25000/14]

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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53. To ask the Minister for Finance the impact of reducing the universal social charge rate for self-employed persons to 7% who earn over €100,000 per annum; and if he will make a statement on the matter. [25002/14]

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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54. To ask the Minister for Finance the impact of increasing the lower contribution rate of universal social charge up to €15,000 and pro-rata increases for subsequent rates; and if he will make a statement on the matter. [25005/14]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 52 to 54, inclusive, together.

In relation to the introduction of a new 48% Income Tax rate on all income over €100,000, it is assumed that the new threshold would not alter the existing standard rate band structure applying to single and widowed persons, to single person child carers and married couples. On that basis, I am advised by the Revenue Commissioners that the estimated full year yield to the Exchequer, estimated by reference to 2014 incomes, of the introduction of such a rate, would be of the order of €380 million. However, given the current band structures, major issues would need to be resolved as to how, in practice, such a new rate could be integrated into the current system and how this would affect the relative position of different types of income earners.

In relation to reducing the Universal Social Charge (USC) from 10% to 7% for self-employed persons with income in excess of €100,000 per annum, I am advised by the Revenue Commissioners that the full year cost, estimated by reference to 2014 incomes, would be of the order of €123 million.

In relation to increasing the threshold for the application of the lower rate of USC from €10,036 to €15,000, with subsequent pro-rata increases, as suggested by the Deputy, I am informed by the Revenue Commissioners that the cost, estimated by reference to 2014 incomes, would be of the order of €652 million.

All estimates above are derived from the Revenue tax forecasting model using actual data for the year 2011, adjusted as necessary for income, employment and self-employment trends in the interim. Estimates are therefore provisional and may be revised.

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