Fianna Fáil Press Office~
Cllr Mary Hanafin
Dún Laoghaire

16 February 2016

Fianna Fáil is only party committed to reducing DIRT tax – Hanafin

Fine Gael and Labour have presided over punitive regime for savers

Fianna Fáil candidate for Dún Laoghaire Cllr Mary Hanafin has highlighted that her party is the only one committed to a reduction in DIRT tax on savings over the lifetime of the next Dáil.

The current government has increased the tax on deposit savings by a massive 14% (from 27% to 41%). In addition anyone with unearned income (deposit interest, rent, dividends etc) of greater than €5,000 has to pay an addition 4% PRSI on deposit interest bringing the total tax on savings up to 45%. Revenue report that there are 1.32 million deposit bearing accounts in Ireland.

Cllr Hanafin  commented “Michael Noonan has massively increased tax on interest from savings. This is a punitive tax on people who have prudently saved money which itself has already been taxed in full. Nearly €2bn has been collected in DIRT since 2011.

“The combination of tax and inflation means real returns for savers are now negative. There has been no respite for savers looking for a decent return on their money.

“It is very important to state that DIRT tax is applied in a discriminatory manner. Any single pensioner earning just over €18,000 (or €36,000 for a couple) is liable for DIRT at the full rate of 41% even if they are only subject to income tax at 20%. For low income families under 66 the situation is even worse. Low income earners who have put aside some savings pay the same rate of DIRT tax as millionaires.

“Savers have also been hit in other ways through the levy on their private pension funds, increased capital gains tax rates and the emasculation of the credit union sector. All in all the Minister for Finance has made it increasingly difficult for families to put money aside for their future wellbeing.

“It is noteworthy that Fianna Fáil is the only party that mentions this issue in its manifesto. Fianna Fáil is committed to reforming and reducing the tax on savings and making it more attractive for people to put money aside. We will commence this by reducing DIRT tax to 38%. This will cost €22m per annum and is provided for in our fully costed manifesto. As resources allow we would seek to further reduce DIRT tax and undo the damage that has been done to savers by Fine Gael and Labour, concluded,” said Cllr Hanafin.