Maureen O'Sullivan (Dublin Central, Independent)
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263. To ask the Minister for Finance the adjustment which is made for indexation of income tax bands and income tax rates when calculating the fiscal space for budget 2018. [27418/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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Additional revenue generated from a policy decision to not to proceed with indexation was included in the discretionary revenue measures set out in Table A7 Application of Expenditure Benchmark, on a no policy change from 2018 onwards in Annex 2 of? the Budget 2017 publication.  

It was estimated that the total Exchequer yield in 2018 from non-indexation of the Income Tax and Universal Social Charge systems would yield c. €450 million, which would increase net fiscal space. This is made up of c. €65 million carryover from non-indexation in 2017 and c. €385m in the first year yield that should arise from proceeding with non-indexation in 2018.  

The forthcoming Summer Economic Statement 2017, will set out up-to-date projections of fiscal space out to 2021.  However, the cost of non-indexation in 2018, will not be finalised until the Revenue Commissioners have completed and published its Pre-Budget 2018 Income Tax Ready Reckoner, which is expected in Quarter 3 2017.  In addition, the updated macroeconomic drivers used in these calculations will await the scheduled endorsement of the macroeconomic forecast by the Irish Fiscal Advisory Council in early October 2017.