Thursday, 1 March 1990
Dáil Éireann Debate
56. Mr. Flood asked the Minister for Finance if he will provide details of the total number of PAYE taxpayers affected by the operation of section 138B of the Income Tax Act, 1967, as amended by the Finance Act, 1980, which precludes the granting of a PAYE allowance to the son or daughter of the owner or proprietary dirctor of a company; the total amount of income tax paid by PAYE taxpayers affected by the Income Tax Act, 1967, as amended; if the issue will be reviewed in light of current taxation legislation; and if he will make a statement on the matter.
Minister for Finance (Mr. A. Reynolds): The provisions of section 138B (2) of the Income Tax Act, 1967, preclude the granting of the employee (PAYE) allowance in respect of emoluments paid by a body corporate to a proprietary director or to the spouse or child of such director, by an individual to the spouse or child of the individual, or by a partnership to a partner's spouse or child.
I am informed by the Revenue Commissioners that it is estimated that the number of proprietary directors who are excluded from receiving the employee allowance is about 50,000 and that the relevant number of spouses and children of such directors is of the order of 62,000. The number of wives and children of other individuals — including individuals in partnerships — is estimated to be of the order of 84,000.
It is tentatively estimated that proprietary directors paid about £142 million in income tax in 1986-87, the latest year for which the relevant statistics are available. This represents approximately 7 per cent of the estimated total income tax paid under PAYE in that year.
 Income tax paid on emoluments by spouses and children who come within the scope of section 138B (2) of the Income Tax Act, 1967, is collected with tax paid under PAYE generally and statistics are not available which would enable the information requested to be given separately.
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