Joan Burton (Dublin West, Labour)
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300. To ask the Minister for Finance his proposed plans for reforming the current tax arrangements for the self employed; and if he will make a statement on the matter. [1675/17]

Michael Noonan (Limerick City, Fine Gael)
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The Deputy will be aware that there is a commitment in the Programme for a Partnership Government to increase the Earned Income Credit (EIC) to €1,650, and the Budget 2017 increase of €400 to the existing €550 credit introduced last year is a significant step in this direction. This is available to self-employed individuals who have an active trade or profession, and who do not have access to the PAYE credit. This will be a significant benefit to small business-owners right across the country including small retailers, publicans, farmers and tradesmen.

The Programme for Government also committed to introduce a PRSI scheme for the self-employed, and in Budget 2017 the Government announced the extension of access to Invalidity Pensions to the self-employed. Invalidity Pension is a pension payment for people who cannot work because of a long-term illness or disability. When someone develops a long-term illness it can cause serious financial repercussions. Gaining access to Invalidity Pension will provide the self-employed with a much stronger safety net to protect them in the event of injury or disablement. The self-employed will gain access to Invalidity Pension on the same basis as employees from December 2017.

Also announced in Budget 2017, is the extension of Treatment Benefits to the self-employed on the same basis as employees. The Treatment Benefit Scheme provides partial dental, optical and aural services to those who have made the required contributions. This extension will come into effect from March 2017. Treatment Benefit entitlements will be extended further from October 2017, providing additional dental and optical benefits.

In addition, jobseekers taking up self-employment will be able to access the Back to Work Enterprise Allowance after 9 months, down from 12 months. Minister Varadkar, the Minister for Social Protection, can provide further information in respect of the above initiatives if required.

I accept that differences remain between the taxation of employees and the self-employed. However it must also be acknowledged that some of these differences are to the benefit of the self-employed. For instance, there are significant timing benefits, depending on the accounting period used by the taxpayer, which are available to the self-assessed but which are not available to PAYE workers. The self-employed also continue to benefit from a broader expense deduction regime than that available to employees.

The Deputy will also be aware that my Department published an Income Tax Reform Plan, in July last year, providing a detailed overview of relevant policy considerations, including the necessity to maintain the breadth of our income tax base, and retain appropriate levels of taxation for high earners. The taxation of the self-employed is considered in some detail in the plan, and the issues outlined therein will be borne in mind when deciding future reform of the income tax system as it relates to the self-employed.

The purpose of this Income Tax Reform Plan was to inform all members of the Oireachtas of the issues and options which will underpin future income tax reform, and it is my hope that all members of the Oireachtas will engage constructively in debating options for future reform in this area. In this regard the scope for change will be dependent on the level of available fiscal resources.