Pearse Doherty (Donegal, Sinn Fein)
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296. To ask the Minister for Finance the estimated revenue raised from tapering personal, employee and earned income tax credits by 2.5% per €1,000 on individual income between €100,000 and €140,000 per year, resulting in no entitlement to these tax credits when income is in excess of €140,000, having increased personal, employee and earned income tax credits by €100 in 2026, respectively for example, increasing tax credits by €100 would increase the yield of tapering personal, employee and earned income tax credits by 2.5% per €1,000 on individual income between €100,000 and €140,000 compared to not increasing tax credits; and if he will make a statement on the matter. [23144/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that their micro-simulation modelling tool, Tax Modeller, is built to model scenarios on a taxpayer unit basis (i.e. including jointly assessed couples as one taxpayer unit). As such, it does not generate any outputs on an individualised basis and is therefore not possible to estimate changes to tax credit on an individual basis for a projected tax year, e.g. the tax year 2025.

However, income recorded on historic tax returns can be used to estimate the potential yield and/or cost associated with the adjustment of tax credits. As 2022 is the latest year for which full tax return data is currently available to be analysed, Revenue has undertaken estimates in relation to the 2022 tax year for the tapering of the tax credits referred to by the Deputy to provide an estimated yield that may arise from this proposal. This estimate is based on gross income.

It should be noted that although the values of the personal tax credit, PAYE tax credit and the earned income credit have increased since 2022, (as provided for in the Budget 2023, 2024 and 2025), the 2022 values for the credits were utilised for consistency purposes in preparing these estimates. Based on this, I am advised by Revenue that the yield for 2022 from tapering the credits which incorporates a €100 increase to the specified tax credits in the proposal outlined by the Deputy is available in the table below.

I am further advised that Revenue cannot provide estimates of specific aspects of the proposals in later years due to the unknown nature of the future tax base and future economic behaviour.