Written answers

Tuesday, 21 June 2022

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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174. To ask the Minister for Finance the estimated first and full-year costs of indexing personal tax credits, the employee tax credit and the earned income tax credit at a rate of 1% while simultaneously tapering personal tax credits, the employee tax credit, the earned income tax credit at a rate of 2.5%, for every €1,000, for individual incomes between €100,000 and €140,000. [32475/22]

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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175. To ask the Minister for Finance the estimated first and full-year cost of tapering personal tax credits, the employee tax credit, the earned income tax credit at a rate of 2.5%, for every €1,000, for individual incomes between €100,000 and €140,000. [32478/22]

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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184. To ask the Minister for Finance the estimated first and full-year costs of indexing personal tax credits, the employee tax credit and the earned income tax credit at a rate of 2% while simultaneously tapering personal tax credits, the employee tax credit, the earned income tax credit at a rate of 2.5%, for every €1,000, for individual incomes between €100,000 and €140,000. [32831/22]

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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185. To ask the Minister for Finance the estimated first and full-year costs of indexing personal tax credits, the employee tax credit and the earned income tax credit band at a rate of 3% while simultaneously tapering personal tax credits, the employee tax credit, the earned income tax credit at a rate of 2.5%, for every €1,000, for individual incomes between €100,000 and €140,000. [32832/22]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 174, 175, 184 and 185 together.

I am advised by Revenue that as their micro-simulation modelling tool, Tax Modeller, is built to model scenarios on a taxpayer unit basis (i.e. including jointly assessed couples as taxpayer units), it is not possible to estimate changes to tax credits on an individual basis for a projected tax year.

However, incomes recorded on historic tax returns can be used to estimate the potential yield and/or cost associated with the adjustment of tax credits. As 2019 is the latest year for which full tax return data is currently available to be analysed, Revenue has undertaken estimates in relation to the 2019 tax year for both indexing and tapering the tax credits referred to by the Deputy to provide an estimated net yield that may arise from this proposal.

It should be noted that although the value of the personal tax credit, employee tax credit and the earned income credit has increased since 2019, (as provided for in Budget 2022), the 2019 values for the credits were utilised for consistency purposes in preparing these estimates.

Based on this, I am advised by Revenue that:

- The yield in 2019 from tapering the credits as outlined by the Deputy would have been an estimated €270m and €325m on a first and full year basis respectively;

- The yield in 2019 from increasing the personal, employee and earned income tax credits by 1% while simultaneously tapering these credits as outlined by the Deputy would have been an estimated €205m and €255m on a first and full year basis respectively;

- The yield in 2019 from increasing the personal, employee and earned income tax credits by 2% while simultaneously tapering these credits as outlined by the Deputy would have been an estimated €145m and €180m on a first and full year basis respectively;

- The yield in 2019 from increasing the personal, employee and earned income tax credits by 3% while simultaneously tapering these credits as outlined by the Deputy would have been an estimated €85m and €105m on a first and full year basis respectively.

As these estimates are based on tax returns for 2019, a different outcome to the above estimates may arise if the policies mentioned by the Deputy were implemented.

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