Written answers

Wednesday, 26 July 2017

Photo of Tommy BroughanTommy Broughan (Dublin Bay North, Independent)
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203. To ask the Minister for Finance if he will report on recent research available to his Department on the relative annual direct or indirect tax burden on each household and member of the labour force and the trends in that burden since 2007 to 2008; and if he will make a statement on the matter. [36449/17]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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My Department engages in research on a wide variety of taxation-related topics and makes use of a variety of sources. As part of the Tax Strategy Group process, papers on various options for tax policy changes are prepared annually, these papers discuss options and issues to be considered in the Budgetary process. In line with the Government’s commitment to Budgetary reform, including greater engagement with the Oireachtas, the Tax Strategy Group papers are now published well in advance of the Budget to facilitate informed discussion. It is intended that the papers for 2017 will be published on my Department’s website by the end of July. Those for 2016, and indeed previous years, are already available there.

Some points that may be of particular interest to the Deputy include:

- My Department uses the ESRI’s tax-benefit model, SWITCH, in order to analyse the changes in the direct taxation burden for different household categories that arise from Budget policies (an example of this analysis is available in the annex to TSG 2016/05 paper and will be available again shortly in the 2017 equivalent), www.finance.gov.ie/sites/default/files/160714-TSG%2016-05%20-Income%20Tax%20and%20USC%20paper.pdf

- In the context of direct taxation, Annex B from Budget Book 2017 provides a discussion of progressivity and the income tax system. It includes a chart (B.28) which examines the average tax rate at different gross income levels and in different years from 1997 to 2016. It demonstrates that, in any given year, the tax burden increases as incomes increase www.budget.gov.ie/Budgets/2017/Documents/Budget%202017%20-%20Full%20document.pdf

- My officials regularly review and consider publications on the tax burden on labour e.g. the OECD Taxing Wages publication. They also regularly review the tax burden for other taxes using publications from, amongst others, the OECD and the European Commission.

Finally, the Deputy may also wish to note that Revenue’s distribution tables www.revenue.ie/en/corporate/information-about-revenue/statistics/income-distributions/it-ct-distributions.aspx were used recently by my Department in an ESRI joint research paper on tax volatility, www.esri.ie/pubs/RS59.pdf. These tables show how much income tax or USC is paid annually in a given income band for different taxpayer categories.

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