Catherine Connolly (Galway West, Independent)
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83. To ask the Minister for Finance the adjustment made for indexation of income tax bands and income tax rates when calculating the budgetary stance for Budget 2023; and if he will make a statement on the matter. [28285/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy will be aware, the Programme for Government commits to indexing income tax credits and bands in the event that incomes are rising as the economy recovers, so as to prevent an increase in the tax burden and to ensure that low-paid workers are not being brought into the income tax net.

The budgetary stance set out in the Summer Economic Statement 2021 included an assumption of a €500 million tax package each year from 2022 onwards. This assumption will be reviewed as part of the assessment of the overall budgetary stance in the Summer Economic Statement 2022, to be published in the coming weeks.

Catherine Connolly (Galway West, Independent)
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84. To ask the Minister for Finance the estimated amount of additional savings that could be made by not indexing income tax bands and income tax rates; and if he will make a statement on the matter. [28286/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Programme for Government, “Our Shared Future”, states that “from Budget 2022 onwards, in the event that incomes are again rising as the economy recovers, credits and bands will be index linked to earnings. This will be done to prevent an increase in the real burden of income tax, to prevent more low income workers being taken into the tax net because of no changes to the tax system and to ensure there is no increase in the number of people having to pay higher income tax and USC rates”. 

The Summer Economic Statement (SES), which will be published in the coming weeks, will include a high level update to the fiscal forecast published in April. The SES will also set-out a budgetary framework within which Budget 2023 can be delivered.

For the information of the Deputy, page 9 of Revenue’s post-Budget 2022 Ready Reckoner, published in November 2021, includes the estimated cost of indexation at 1 percent point, across the main tax credits and standard rate income  tax bands, as well as USC rate bands and exemption limits.This information is set out in the table below or available at the following link –

www.revenue.ie/en/corporate/documents/statistics/ready-reckoner.pdf.

Apart from providing a basis to calculate indicatively the cost of a given level of indexation, the information in the table may also be used to estimate roughly the annual savings that might arise from a policy of non-indexation.