Annex B

Ireland and UK Comparison

The following graphs compare the average tax rates for different taxpayers on various incomes, for Ireland in 2000/01, Ireland in 2001 and the United Kingdom in 2000/01.  For comparison purposes the 2001 tax year is taken as twelve months instead of nine.  The figures for Ireland take account of income tax, the health contribution and employee PRSI, while figures for the UK take account of income tax and employee NIC (National Insurance Contribution - PRSI equivalent.)  The figures do not take account of the UK Working Family Tax Credit or the Irish Family Income Supplement.

An exchange rate of 0.7677 was calculated into the UK gross income figures.  This was the exchange rate at the end of November.

As can be seen, the Irish tax system is more favourable for taxpayers on low incomes and for one-income married couples.