FF Would Exempt the First 200 EUR in Deposit Interest from DIRT

Indo report here.

It's good to see somebody putting taxes on savings on the political agenda. The current DIRT rate really is larcenous, particularly for low income taxpayers and retirees on fixed incomes.

However, I would have thought a more equitable approach would be to reduce DIRT to the standard rate of income tax and to require all marginal rate taxpayers to make a return in respect of their deposit interest income. That would surely be of greater benefit to low income households.

Sarenco said:

However, I would have thought a more equitable approach would be to reduce DIRT to the standard rate of income tax and to require all marginal rate taxpayers to make a return in respect of their deposit interest income. That would surely be of greater benefit to low income households.

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Logical, sensible though ultimately denying them an easy source of tax revenue. After all it was the current government that punished savers so harshly for their prudence (in addition to the pension robbery via the pension levy). What new, theoretical government wouldn't take the opportunity to still partake of the lion's share of an easy tax while blaming the previous ruling, political body for making savers so miserable in the first place? By compromising somewhat and offering a €200 threshold they will win over the goodwill of savers (often an ignored voter segment) for the election and once in office will simply use incoherent, political bureaucracy to stall the issue of why they didn't go much further in been fair to savers until the issue is forgotten.

That said it would be great to know more about the specifics of this €200 threshold. If it requires some ridiculous, complicated, long drawn out paperwork to claim a refund from the government then probably a great many people won't engage with it (which could intentionally be set up with that objective in mind).

If it's automatically done at source at the banks (per account) then it's at least a step in the right direction. Savvy savers will spread their savings around to maximise the benefit.