Colleagues contradict Quinn on pension tax exemptions
EDUCATION Minister Ruairi Quinn was left red faced last night as Government colleagues ruled out any change to the controversial exemption of fat cats from the new pension tax.
The first chink in the coalition's defence of the exemption of some high earners from the pension fund levy appeared to emerge when the former finance minister said loopholes would be examined.
Mr Quinn was weaker than his government colleagues on the treatment of Approved Retirement Funds (ARFs), which are used by high earners.
While the rest of the Cabinet insisted there would be no change, Mr Quinn suggested a watering down of the rules applying to the pension tax.
But Public Expenditure Minister Brendan Howlin said there was no question of ARFs being subject to the levy.
"The ARFs will not be subject to this levy because they're already taxed. This levy is on monies that are not taxed, it is pension pots. ARFs are taxed already.
"If they're drawn down they're taxed at the full marginal rate of the person who draws them down. If they're not drawn down, a notional 5pc drawdown is given every year and it's charged at the marginal rate of the owner of the ARF and that is not just for four years -- that's a permanent tax. They are taxed already," the minister said.
Mr Quinn indicated Finance Minister Michael Noonan would deal with the controversy. "I think it will be. I have listened to Minister Noonan speaking in the Dail," he said.
The former finance minister said the Government would "do whatever they can to close those loopholes".
"If there are anomalies in it and those anomalies can be addressed, then Michael Noonan will do it," he said.
But the Department of Finance stuck to its argument that ARFs would not be subject to the new levy.
"The Minister for Education stated that that he was certain that the Minister for Finance would work to ensure that the application of the levy is fair and equitable," a spokesman said.