Pearse Doherty (Donegal, Sinn Fein)
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300. To ask the Minister for Finance the estimated savings from removing tax credits from incomes above €100,000; and if he will make a statement on the matter. [31764/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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Following clarification from the Deputy’s office, it was confirmed that the removal of credits will apply to the personal tax credit, PAYE tax credit and the earned income tax credit. In addition, that the credits will be removed in a tapered way by 2.5% per €1,000, resulting in no benefit from these tax credits for those on incomes in excess of €140,0000. Further, it is assumed that the tapering will apply on an individualised basis, that is, that the relevant income will be the incomes of an individual and not that of the taxpayer unit as a whole (jointly assessed cases are counted as one taxpayer unit).

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 it is therefore not possible to estimate changes to tax credits on an individual basis for a projected tax year, e.g. the tax year 2025.

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 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 personal, earned income and employee tax credits 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, the employee PAYE tax credit and the earned tax credit have increased since 2022, (as provide for in 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 estimated first and full year yields from the proposal outlined would be €395 million and €475 million respectively.