Michael McGrath (Cork South Central, Fianna Fail)
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288. To ask the Minister for Finance if he has examined the feasibility of charging DIRT at the account holders' marginal tax rate rather than a flat rate of 41%; and if he will make a statement on the matter. [41307/14]

Michael Noonan (Limerick City, Fine Gael)
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DIRT is deducted at source by financial institutions. In order to charge DIRT at an account holder's marginal tax rate a financial institution would need to be aware of a depositor's marginal rate at the time that interest is paid or credited to any account held by such depositor. The Deputy will be aware that a taxpayer's marginal rate may change throughout the year in line with changes in their circumstances. While the feasibility of providing financial institutions with the necessary information to operate the tax on this real-time basis has not been examined, it would present major challenges including substantial investment in systems development by Revenue and financial institutions and a very significant amendment to the statutory confidentiality of taxpayer information. In contrast to the current regime, where the DIRT is a final liability charge on the interest received by most depositors, tax deducted at the depositor's marginal rate at the time of interest payment could require end-of-year refunds or additional payments by depositors, many of whom may not normally submit an annual tax return.