asked the Minister for Finance if he will define the terms net income and gross income as assessed for income tax purposes in respect of self-employed persons and farmers; the number of such persons; the number currently liable for income tax; the estimated amount to be paid by them in 1987; and if he will make a statement on the matter.

The terms "net income" and "gross income" are not used in the Income Tax Acts and are not legal tax terms. The terms "total income" and "taxable income" are, however, used in this context. These are technical terms relating to certain steps in the process of determining a person's tax liability. In relation to the self-employed, which term includes farmers, "total income" broadly means an individual's income from all sources reduced by such items as capital allowances, interest, losses, pension contributions, etc. "Taxable income" is the income on which the individual's charge to tax at the prevailing tax rates is actually calculated. It is total income further reduced by the various personal allowances and reliefs.

As regards the figures requested by the Deputy, the relevant statistics available are in respect of the income tax year 1986-87. From figures contained in Table 14 of the results of the 1985 Labour Force Survey, published in September 1986, it is estimated that 129,500 farmers were chargeable to income tax in respect of the tax year 1986-87. This comprises some 119,000 full time farmers together with a further 10,500 farmers, who, or whose spouses, carry on another trade or profession.

It is estimated that some 81,400 self-employed persons other than farmers were chargeable to income tax in 1986-87. The number of self employed persons including farmers who are ultimately expected to make tax payments in respect of 1987-88 is provisionally estimated at 110,000, of which the number of farmers is tentatively estimated to be of the order of 27,000.

The post-budget estimate of income tax to be paid by farmers and other non-PAYE taxpayers in 1987 is £35.5 million and £226.1 million respectively.

Can the Minister tell us why the terms "net income" and "gross income" were used in the Programme for National Recovery and why these terms were particularly impressed on both the trade union and farmer leaders when, as he correctly concedes now, the Income Tax Act states that the phrases “total income” and “taxable income” should be used?

I would like to say that neither of those phrases were used in the Programme for National Recovery. The programme stated that the Government have decided to introduce PRSI for farmers and the self-employed in 1988 on the basis of income as assessed for income tax purposes.

Would the Minister not agree that the Taoiseach in contacting the Irish Congress of Trade Unions assured them that farmers would pay a higher rate of PRSI on their net income and on that basis the Irish Congress of Trade Unions finally signed this so-called Programme for National Recovery? The Minister went on radio and spoke about taxable income and the IFA deliberately used the phrase “gross income” to suit their own purposes. A very serious deception was deliberately perpetrated by the Taoiseach to the Trade Unions and the farmers in order to get them to sign the programme. As a result, there were many different interpretations put on what this scheme is going to cost the Exchequer. Would the Minister concede that the Taoiseach put him in an unsustainable position?

May I answer the question now?

You may.

The Deputy must think that the trade unions and the farmers are very naive if he thinks that they have been misled in the way he has outlined. Quite clearly, what the programme said, what the Taoiseach and I also said and what the people fully understand is that we will introduce PRSI for farmers and the self-employed on the basis of income assessed for income tax purposes. I have been very careful when speaking about this to use exactly those terms. What should be understood is that the precise details of the arrangements that will be worked out regarding PRSI for the self-employed, which includes farmers, are still under consideration and that what must be accepted and realised is that we are now extending the payment of pay-related social insurance to these categories.

May I make a final observation?

Certainly, not an observation. A question, please.

Would the Minister not agree that the IFA have persistently said that the Government and the Taoiseach agreed that PRSI would be paid on the basis of net income. Both the Taoiseach and Mr. Rea are on the record in that regard. Would the Minister not agree that a deception was perpetrated on that occasion?

The Deputy should realise that he is enlarging on the question——

I am trying to get the truth.

——to the extent that dúirt bean liom go ndúirt bean léi and this is not provided for in Question Time. Deputy McDowell.

Dúirt An Taoiseach go ndúirt Mr. Rea.

A Leas-Cheann Comhairle, I think you will have to apply the hearsay rule here. Can the Minister tell us whether it is proposed to charge PRSI on income inclusive or exclusive of deductions, say, for pensions? In other words, would it be open to a farmer or another self-employed person to make his deductions for his pension contributions and then pay PRSI on the balance or will he have to pay it on his gross income before making those arrangements for his retirement?

As I said earlier in reply to another supplementary question, the precise details of these arrangements are still under consideration and until they are finalised I am not in a position to answer any of those detailed questions.

(Limerick East): When the Minister eventually organises this scheme will it be his intention that the contributions would finance the subsequent eligibility?

That is what will be intended in any pay-related social insurance scheme.

(Limerick East): That is not the way the current scheme operates.

That is what will be intended when the scheme is introduced.

(Limerick East): Therefore, is the Minister saying that he is going to take sufficient funds from both the farmers and the self-employed to fund in-toto any subsequent benefits which they might achieve?

That will be the intention and was the intention——

(Limerick East): That is the intention but it is not the reality.

——when the pay-related social insurance scheme was introduced.

The farming community hold a different view.

I know the Deputy is very disappointed that we have done something that he wanted to do for four and a half years but never did.

I am not disappointed.

The Deputy should stop acting like a little baby who has lost his little toy. That is his problem. In relation to the question which was asked by Deputy Noonan, the intention is as I have said, that it would pay for itself. The final details are still under consideration and have yet to be concluded.

It is the Chair's intention to now move on to the next question. We are not going to spend the whole day on one question.

(Limerick East): May I ask a supplementary question? Can I take if from the information which the Minister has given the House that the Government are thinking in terms of getting a 15 per cent contribution?

The Minister is nodding his head.

Question No. 4.

The precise details have not yet been worked out but when they are I will publicise them.