Following previous clarifications from the Deputy’s office, "individually assessed income” is interpreted as meaning the total gross income of single persons, widowed persons, married persons/civil partners who have an income but are not jointly assessed, and jointly assessed taxpayer units with one person in the unit with an income. The “jointly assessed income” has been interpreted as married persons/civil partners who are jointly assessed and both partners have an income.
I am advised by Revenue that their income tax micro-simulation tool, Tax Modeller, cannot cost the impact of implementing a minimum effective rate, as this model is structured in line with existing income tax policy, where specified amounts of income are taxed or levied at specified rates. Therefore, for this analysis it is necessary for Revenue to use actual data from tax returns for the latest year for which full data on all taxpayers is available for analysis, currently 2023. Where Tax Modeller is employed for costings, the results would be estimates for 2026. Data for 2024 will be available for analysis in Q3 of this year, and in the same period Tax Modeller will be updated to produce costing estimates for 2027.
I am further advised by Revenue that, in order to estimate the additional yield from this policy proposal relative to the baseline policies in place, this analysis has to be carried out on a taxpayer unit basis, where a taxpayer unit refers to individuals except in the case of jointly assessed couples who are counted as one unit and the income levels of such jointly assessed couples refers to both incomes combined. Therefore, I am advised by Revenue that, given the parameters specified in the question, the analysis will have the greatest impact on those who are jointly assessed.
I am also advised by Revenue that the gross income available for this analysis is distinct from taxable income, which is the relevant income for the assessment of Income Tax and that, therefore, the figures calculated for this analysis are an overestimate of yield. Further, this gross income is also not used for the assessment of USC as there is a separate calculation of income subject to USC.
Based on these caveats and conditions, I am advised by Revenue that the estimated yield in 2023 is approximately €2.1 billion.
