Written Answers - Special Savings Incentive Scheme.Tuesday, 9 November 2004 |
Dáil Eireann Debate
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204.
Mr. P. McGrath
asked the
Minister for Finance
if the 25% bonus paid to subscribers to the SSIA scheme is a tax refund, interest or some other payment; and if these bonus payments need to be included in income tax returns.
[28211/04]
Minister for Finance (Mr. Cowen):
The specific goal of the SSIA scheme is to encourage people to save over a period of at least five years. In order to provide an incentive to save for this period, the Exchequer makes a contribution of 25% of the amount that a person saves. This is equivalent to giving a tax credit at the standard rate of income tax in respect of the amount the person saves. This is the mechanism that is used in the legislation to provide for the Exchequer contribution. In effect, the saver is paid a tax credit in respect of an amount of tax that the saver is treated as having paid. Therefore, the Exchequer contribution is not income for tax purposes and is not required to be included in an income tax return.
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