Wednesday, 18 April 2012
Dáil Éireann Debate
205. Deputy Kevin Humphreys asked the Minister for Finance the reasons for the reclassification of approximately €207 million from PRSI to income tax in the end of March Exchequer returns; if this was an issue in last year’s Exchequer figures; and if he will make a statement on the matter. [19088/12]
Minister for Finance (Deputy Michael Noonan): Based on information my Department has received from the Revenue Commissioners, some €207 million of receipts previously returned as PRSI income have been reclassified as income tax in the first quarter of the year. The basis of the income tax/USC/PRSI collection system is that employers make a payment on account, usually every month, to the Revenue Commissioners. A full reconciliation of the split between income tax/USC/PRSI is made when the statutory P35 return is made by employers the following year (return due in February).
The reclassification was carried out by Revenue on the basis of the 2011 P35 returns from employers. Such adjustments are a normal feature of Revenue’s reconciliation process following the end of the year. The scale of the adjustments for 2011 was greater than for previous years however because of the impact of the USC on the overall split between income tax and PRSI.
This reclassification is largely responsible for the surplus in Exchequer income tax receipts compared to profile in the first quarter of the year. However the subsidy which the Exchequer makes to the Social Insurance Fund (SIF) is also higher than expected, because PRSI income is behind target, largely as a result of the reclassification. As a consequence, the net voted current expenditure of the Department of Social Protection (D/SP), which includes the subsidy to the SIF, is also ahead of profile.
|Last Updated: 08/03/2013 13:27:58||Page of 1006|