Dáil Éireann - Volume 637 - 26 June, 2007
Written Answers. - Tax Code.
Deputy Aengus Ó Snodaigh Deputy Aengus Ó Snodaigh
Deputy Aengus Ó Snodaigh asked the Tánaiste and Minister for Finance his views on whether further reductions in income tax would make the Exchequer increasingly dependent on other more insecure sources of tax revenue such as those related to property and consumption; and if the proposals contained in the Programme for Government to reduce both the standard and higher rate of income tax are therefore imprudent. [17256/07]
Deputy Brian Cowen Deputy Brian Cowen
Deputy Brian Cowen: The Programme for Government sets out clearly the Government’s guiding economic and fiscal principles for the next five years. We are fully committed to a responsible fiscal policy, including keeping the budget in broad balance.
Within these broad principles, our first priority in the tax area will be to continue to support low and middle income earners, via the tax credits, bands and the PRSI system. The Programme for  Government clearly states that once these commitments have been met, any additional resources will be targeted at further enhancing the rewards for work. We are committed to reducing the standard and higher rates of income tax over the lifetime of the Government if economic resources allow.
I would point out that the main consumption taxes are VAT and excise duty. Taken together these taxes account for some 43 per cent of total forecast tax revenues in 2007, whereas they accounted for 44 per cent and 46 per cent of total taxes in 1997 and 1987 respectively.
While revenues from property related taxes such as stamp duty and capital gains tax have made an increasing contribution to the Exchequer in recent years, we are not overly reliant on these receipts. Care has been taken not to plan the public finances around an assumption that receipts from stamp duty and capital gains tax will continue to grow in future years as they have done in recent years.
I reject the Deputy’s suggestion that the policies and commitments in the Programme for Government are imprudent. They are based on a sustainable and responsible fiscal policy.
Dáil Éireann 637 Written Answers. Tax Code.