Pearse Doherty (Donegal, Sinn Fein)
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560. To ask the Minister for Finance the estimated savings from removing tax credits from incomes above €100,000 based off the latest data; and if he will make a statement on the matter. [46582/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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Following clarification from the Deputy’s office, it was confirmed that the question relates to the personal credit, the employee credit and the earned income credit, and that the tapering would be done at a rate of 2.5% for every €1,000 increase in income levels, such that taxpayers earning in excess of €140,000 would have no entitlement to these credits. 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 2026.

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 2023 is the latest year for which full tax return data is currently available to be analysed, Revenue has undertaken estimates in relation to the 2023 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, employee tax credit and the earned income credit have increased since 2023, (as provided for in the Budget 2024 and 2025), the 2023 values for these 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 approximately €465m and €555m respectively.