Written answers
Wednesday, 17 September 2014
Department of Finance
Tax Reliefs Cost
Ruth Coppinger (Dublin West, Socialist Party)
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189. To ask the Minister for Finance the amount income tax relief on pensions has cost the Exchequer in 2012 and 2013; and the percentage that benefited those on the higher and lower rates of income tax respectively. [33040/14]
Michael Noonan (Limerick City, Fine Gael)
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I am informed by the Revenue Commissioners that the cost to the Exchequer of income tax relief relating to private pension contributions for 2012 and 2013 is not yet available. The following table provides a breakdown of the estimated cost for 2011, the latest year for which data are available.
It should be borne in mind that the costing of tax and other reliefs in the pensions area may suggest a significant notional loss in terms of tax foregone as compared with the savings that might be expected if the tax relief was not available. However, where tax relief arrangements are of such significance, the removal of the reliefs would represent a fundamental adjustment to the tax system and would have significant economic and behavioural impacts implications. These impacts are difficult to model in advance and the costing of tax reliefs should be treated with some caution.
I have also been informed by the Revenue Commissioners that a breakdown of the cost of tax relief by reference to income tax rates is not readily available. Employers' returns to the Revenue Commissioners of employee contributions to such schemes are aggregated at employer level. There is, therefore, no basis for providing the breakdown requested.
| Estimate of the cost of certain tax reliefs for private pension provision | 2011 Estimated costs |
|---|---|
| ** | € Million |
| Employees' Contribution to approved Superannuation Schemes | 584 |
| Employers' Contribution to approved Superannuation Schemes | 142 |
| Estimated cost of exemption of employers' contributions from employee BIK | 532 |
| Retirement Annuity Contracts (RACs) | 164 |
| Personal Retirement Savings Accounts (PRSAs) | 72 |
| TOTAL | 1,494 |
Ruth Coppinger (Dublin West, Socialist Party)
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190. To ask the Minister for Finance the cost of mortgage interest relief to the Exchequer in 2012 and 2013; the amount of that total benefited those paying the higher and lower rates of income tax; and the average annual cost of mortgage interest relief per household and per income tax payer. [33041/14]
Michael Noonan (Limerick City, Fine Gael)
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I am informed by the Revenue Commissioners that the cost to the Exchequer of mortgage interest relief for principal private residences by way of tax relief at source (TRS) in the years 2012 and 2013 is as follows:
| Tax Year | Cost - €m | Number of Claimants |
|---|---|---|
| 2012 | 411 | 508,200 |
| 2013* | 353 | 492,700 |
A breakdown of the above amounts by those paying the higher and lower rates of income tax is not readily available. Mortgage interest relief is provided by way of the TRS system, regardless of whether the individual has an income tax liability or not. Therefore, information on the income of individuals in receipt of mortgage interest relief is not necessary for the administration of the granting of TRS. An estimate could only be provided by undertaking an extensive review of Revenue records and would likely require further development of the Revenue forecasting model. Furthermore, I am advised by the Revenue Commissioners that they are unable to provide an average annual cost of mortgage interest relief per household.
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