Dáil Éireann Debate, Tuesday - 30 September 2025
314. Deputy Paul Murphy asked the Minister for Finance if he will address, in the Budget, the unfairness of low paid workers paying more for TaxSaver public transport tickets than higher paid workers; and if he will make a statement on the matter. [51848/25]
Amharc ar fhreagraAs the Deputy will be aware, it is a longstanding practice that the Minister for Finance does not comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.
I would note, however, that the Taxsaver scheme, as provided for in section 118(5A) of the Taxes Consolidation Act 1997 (TCA), offers an exemption from benefit-in-kind (BIK) where an employer purchases a travel pass for one of their employees or directors, subject to certain conditionality. Under section 118B TCA, an employer and employee may also enter into a Revenue-approved salary sacrifice arrangement under which the employee agrees to sacrifice part of his or her salary in exchange for the benefit.
The scheme was implemented as tax-exempt BIK in order to keep the implementation as simple as possible and reduce administrative burden on the part of employers. However that means that, under these schemes, the qualifying benefit is exempt from income tax, PRSI and USC at whichever rate the taxpayer would otherwise be liable to pay. Although those individuals liable to tax at the higher rate will, as a result, effectively get tax relief at that rate, generally over the course of the tax year they will pay a significantly greater amount of income tax than individuals that are liable to the standard rate of tax. This is due to the progressive nature of the Irish personal income tax system.
In fact, I would note that Ireland has among the most progressive systems of taxes and social transfers of any EU or OECD country. Progressive income tax systems contribute to the redistribution of income and to the reduction of income inequality. Ireland’s income tax system generally ensures that the burden of taxation falls most heavily on those with a higher ability to pay. This means that those on lower incomes pay less income tax as a share of their income than those on higher incomes. It is my view that a broad-based, progressive income tax system, where the majority of income earners make some contribution but according to their means, is the fairest and most sustainable income tax system in the long term.
