Neale Richmond (Dublin Rathdown, Fine Gael)
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284. To ask the Minister for Finance if he will consider implementing an optional 40% rate of automatic withholding tax for self-employed persons providing services to the State at the option of the taxpayer; and if he will make a statement on the matter. [28771/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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I assume that the Deputy is referring to Professional Services Withholding Tax (PSWT). PSWT was introduced in 1987 and is a withholding tax which provides for the deduction at source of tax at the standard rate of income tax (20%) from gross payments made by accountable persons for certain professional services.

Accountable persons include Government Departments and Offices, Local authorities, the Health Service Executive, authorised Health Insurers and commercial and non-commercial semi-State bodies and their subsidiaries.

The definition of professional services covers a wide range of services such as medical, architectural, engineering, financial, legal and geological services.

PSWT is an interim tax and PSWT deducted is allowed as a credit against Income Tax or Corporation tax of the individual or company that has suffered it.

As the Deputy may be aware, it is a long-standing practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.

Paul Murphy (Dublin South West, RISE)
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285. To ask the Minister for Finance if he will amend the measures which provide for staycation payments to render them payable as a grant rather than as a tax rebate in order that persons on pensions or other benefits whose incomes are below the tax threshold can also avail of the grant. [28785/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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The introduction of grant measures in this sector would be a matter for the Minister for Media, Tourism, Arts, Culture, Sport and the Gaeltacht.

With regard to the Stay and Spend Tax Credit, the Deputy will be aware that, within the tax system, the normal position is that a tax credit can only benefit a person who has a tax liability. In the case of the Stay and Spend Tax Credit, however, special arrangements have been made to extend the potential benefit as widely as possible so that, even where a person does not have an income tax liability, he or she may still benefit by virtue of having a USC liability. The position is that a full-time minimum wage worker will be able to absorb fully the Stay and Spend Tax Credit in either 2020 or 2021. In fact, a person who earns 75% of the minimum wage in the year, for example a person working part-time for 29.25 hours per week on the minimum wage, will also be able to fully absorb the credit in either 2020 or 2021.