Dáil Éireann Debate, Tuesday - 23 June 2026
241. Deputy Pearse Doherty asked the Tánaiste and Minister for Finance the estimated revenue raised from tapering personal, employee and earned income tax credits by 2.5% per €1,000 on individual income between €100,000 and €140,000 per year, resulting in no entitlement to these tax credits when income is in excess of €140,000. [47035/26]
Amharc ar fhreagraI 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 is therefore not possible to estimate changes to tax credit on an individual basis for a projected tax year, e.g. the tax year 2026.
However, income recorded on historical tax returns can be used to estimate the potential yield and/or cost associated with adjustments 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 on an individualised basis in relation to the 2023 tax year for the tapering of the tax credits referred to by the Deputy, 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, PAYE tax credit and the earned income credit have increased since 2023, (as provided for in Budget 2024 and 2025), the 2023 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 yield for 2023 from tapering the credits in the proposal outlined by the Deputy are €465m and €555m respectively.
