HIGH earners are beginning to enter the normal tax system and are using fewer tax reliefs, according to new research issued by the Department of Finance yesterday.
The report showed that the State generated less in 2011 from the High Earners Restriction – which was imposed to prevent the abuse of tax reliefs by the wealthy – than it did in 2010.
High earners are defined as people earning €400,000 or more.
Discussing the report in his Budget 2014 speech, Finance Minister Michael Noonan said this was down to "the income of these individuals falling and the closure of tax reliefs, such as the abolition of the patent and stallion fees exemptions and the capping of the artist's exemption. This has resulted in many of these individuals moving into the regular income tax system".
A portion of artists' income is still exempt from incomes taxes, but a cap of €40,000 was controversially applied in 2011.
Universal Social Charge was also applied to artists' income in the same year.
The report also showed that the effective tax rate for high earners is now between 30 and 40pc, having risen in recent years.
Mr Noonan said this proved that the High Earners Restriction was "working to improve the balance between promoting tax equity in relation to those on high incomes, whilst maintaining the incentive effect of the various tax reliefs introduced to achieve a particular public good".