Seán Canney (Galway East, Independent)
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186. To ask the Minister for Finance if he will introduce a tax amnesty for pandemic unemployment payment recipients who are being issued with tax bills; and if he will make a statement on the matter. [3644/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Pandemic Unemployment Payment (PUP) is an income support which is taxable and subject to income tax. The PUP follows the general taxation rule for social welfare type payments, such as Jobseekers Benefit and Jobseekers Benefit (Self-Employed), and is exempt from USC and PRSI charges.

I do not propose to introduce a tax amnesty for PUP recipients as suggested by the Deputy.

It would be inequitable if PUP recipients were granted relief while those on Jobseekers Benefit were not. It would be similarly unfair to those in receipt of the temporary wage subsidy payment, as well as those who continued in employment who must pay tax on their emoluments.

In the case of lower income taxpayers or those whose income comprises solely of social welfare payments, a significant liability to tax typically does not arise because the value of social welfare payments received in a tax year are usually lower than the income sheltered by the main income tax credits. Further, in cases where the tax liability for those payments exceeds unused personal and PAYE tax credits for 2020, the level of income tax due may be reduced if the person has additional tax credits, for example health expenses, to offset.

The steps taken by Revenue, whereby individuals may opt to fully or partially pay any income tax liability or have Revenue collect the liability by reducing their tax credits over four years, interest free, is a demonstration of how arrangements have been made to minimise financial hardship to the greatest extent possible on taxpayers challenged by COVID-19.

Although the final calculation of the end of year liability for each person is dependent on their personal circumstances, I note that almost half of those in receipt of the PUP or TWSS in 2020 have no outstanding liability to discharge (in fact over a third are due a refund). In the case of the remaining taxpayer units with an outstanding liability, the data indicates that amounts to be collected are modest in scale, with 44% owing less than €500 and 72% having a liability of less than €1,000. If paid over the four year period beginning in 2022, the majority of those cases will owe less than €5 per week, with nearly half paying less than €2.50 per week. These figures represent a preliminary liability and may be further reduced by additional tax credits or reliefs such as health expenses.

I am of the view that Revenue has been adopting a fair and flexible approach to collecting tax due on payments made under the PUP.