Dáil Éireann - Volume 481 - 08 October, 1997

Written Answers. - Income Tax Rates.

90. Mr. Deenihan asked the Minister for Finance the personal income tax rates in the EU member states; and if he will make a statement on the matter. [15823/97]

Minister for Finance (Mr. McCreevy): Comparable data on personal income tax rates in the EU member states is not readily available. The structure of personal income tax systems vary considerably between countries, with some having significant local income tax rates applied in addition to the state income tax rates. Comparing personal income tax rates between countries is therefore difficult.

[454] Subject to the above reservations the Revenue Commissioners have, however, prepared the attached summary schedule which may be of interest to the Deputy. The figures indicate state and local taxes where appropriate.

EU Country

Rates of Income Tax

Year

Austria

10%, 22%, 32%, 42%, 50%

1966

Belgium

25%, 30%, 40%, 45%, 50%, 52.5%, 55%

1996

Denmark (1)

10%, 16%, 31%

1996

Finland (2)

7%, 17%, 21%, 27%, 33%, 39%

1996

France

12%, 25%, 35%, 45%, 50%, 56.8%

1996

Germany

0%, 25.9%, 25.9% -53%, 53%

1997

Greece

5%, 15%, 30%, 40%, 45%

1996

Ireland (3)

26%, 48%

1997

Italy

10%, 22%, 27%, 34%, 41%, 46%, 51%

1996

Luxembourg

0%, 10%, 20% and 15 higher rates which increase by increments of 2% per rate up to 50%

1996

Netherlands

37.5%, 50%, 60%

1996

Portugal

15%, 25%, 35%, 40%

1996

Spain

Seventeen rates moving incrementally from 20% to 56%

1996

Sweden

31%, 56% (includes local taxes)

1996

United Kingdom

20%, 23%, 40%

1997

(1) Municipal taxes are also levied. The average rate was 30.5%.

(2) Municipal income tax is levied at a flat rate. The rate varies between 15 per cent and 19.5 per cent depending on the municipality.

(3) In the case of taxpayers taxed under the marginal relief system, a rate of 40 per cent applies up to the income level at which it becomes more beneficial for the taxpayer to be taxed under the normal tax system.

91. Mr. Deenihan asked the Minister for Finance if he will quantify the Exchequer requirement to reduce the lower income tax rate from 26 pence to 25 pence per pound and the upper income tax rate from 48 pence to 45 pence. [15824/97]

Minister for Finance (Mr. McCreevy): I am informed by the Revenue Commissioners that the full year costs to the Exchequer, by reference to the income tax year 1998-99, of the changes mentioned by the Deputy are estimated as follows: reduction of the standard rate of income tax from 26 per cent to 25 per cent would cost £105 million in a full year and reduction of the 48 per cent rate of income tax to 45 per cent would cost £163 million in a full year. [455]