Tough at the top but no pain for tax exiles
THE super-rich have been hit with a raft of increased taxes in the new Budget -- but tax exiles have escaped for now.
It follows Finance Minister Brian Lenihan's promise to ensure that those with high incomes would pay the most.
The "super" income levy has been increased from 3pc to 6pc for those earning over €175,000 and they will also lose out on a variety of lucrative tax relief schemes.
But Mr Lenihan made no move to clamp down on the country's 5,800 tax exiles or to increase taxes on multi-million euro directors' pensions.
Labour finance spokeswoman Joan Burton said that tax exiles and people with €20m pension pots would "sleep easy" after this budget because they were not affected by it
"But a lot of ordinary families are counting the cost of this budget to them. It's a shame on Government," she said.
There had been speculation that Mr Lenihan might reduce the number of days (183) a tax exile is allowed to spend in Ireland each year before becoming liable to pay tax. Around 440 of the 5,800 tax exiles are thought by Revenue to be "extremely wealthy", with an estimated €91m lost in tax in 2006.
Removal
Mr Lenihan said that while it was not possible to restrict further tax reliefs at this stage of the tax year "for technical reasons", he would be removing them in successive budgets.
He announced that he was cutting a series of other schemes, which wealthy investors had previously used to write off their tax bills. These include the abolition of a special 20pc tax rate on profits from dealing in or developing residential development land. The scheme had benefited property developers since it was introduced by former Finance Minister Charlie McCreevy in 1999.
Mr Lenihan also said that he was terminating tax relief schemes in the health sector, which covered private hospitals and nursing homes. The Labour Party said this appeared to have dealt a death blow to Health Minister Mary Harney's co-location scheme, which was expected to allow investors to claim up to €1bn in tax relief for building private hospitals on the grounds of public hospitals. But a spokesman for Ms Harney said arrangements were being put in place to allow co-located hospitals in the pipeline to still qualify for the tax relief.
- MICHAEL BRENNAN
