Sir, - The report in The Irish Times (September 24th) of the launch of the IMPACT Report "A Burden Shared: First Steps in Tax Reform" may have inadvertently caused some confusion. I accept that it is difficult to summarise a technically complex area in a few words. Could I, therefore, clarify a few points?
IMPACT is seeking that personal tax exemption limits, and not personal tax allowances, be increased to at least £100 pw for a single person. The cost of increasing the tax exemption limits to the figures proposed would not be significant, whereas the cost of increasing personal tax allowances to this level could be.
IMPACT did not specify any particular figure for the tax credit system which we proposed as a replacement for the existing tax allowances. The amount of the tax credits would depend on a number of factors. The value of a tax credit would be the same for all taxpayers irrespective of their rate of tax. The value of the single personal tax allowance (£2,650 a year) is £1,272 for a 48 per cent rate taxpayer, whereas it is only £715.50 for a 27 per cent rate taxpayer - a difference of £556.50 or £10.70a week.
Finally, IMPACT has not attempted, and will not attempt, to defend the current Government policy in relation to the taxation of short term social welfare benefits. We have proposed that PRSI contributions should be allowable for tax purposes on the same basis as superannuation contributions and in that context. In that context only, did we propose that all of the consequential benefits be liable to tax (assuming that the individual has other taxable income). - Yours, etc.,
National Secretary, Civil Service Division,
IMPACT,
(Irish Municipal, Public and Civil Trade Union),
Nerney's Court, Dublin 1.