TDs face big tax hit on lavish expenses
Saturday August 22 2009
TDs and senators face having their generous expenses taxed under a radical shake-up.
The report of the Commission on Taxation recommends that members of the Oireachtas should have their expenses taxed in the same way as ordinary workers.
Many TDs submit claims of up to €90,000 a year in largely untaxed expenses, according to recent revelations.
The commission's report, details of which were revealed in yesterday's Irish Independent, also recommends: l Tax relief for private healthcare should be restricted. l Tax relief for farmers and business people passing on their assets should be curtailed. l Reliefs used by fat cats to cut their tax bill should be scrapped.
It has also been established that the report's recommendation to tax child benefit will mean middle-income families losing half of the benefit.
TDs and senators are not spared in the commission's report, a copy of which has yet to be submitted to the Government.
The failure of politicians to share in the pain being experienced by ordinary families has contributed to a groundswell of anger among voters.
Now the Government-appointed commission has recommended that Oireachtas members should no longer automatically get expenses that are not subject to tax.
A TD can currently claim €5,482 in general expenses per year without paying tax on it. A sum of €34,484 is also provided to TDs to pay for a constituency secretary. This position is often occupied by a family member of the TD.
TDs who earn €100,000 a year in salaries can also boost their income with a tax-free daily allowance of €61.53 for attending the Dail if they live within 15 miles of the Oireachtas. Members of the Oireachtas who live more than 15 miles away can claim an overnight allowance of €139.67 tax free.
Critics have claimed that unlike ordinary workers, the existence of these daily allowances effectively means TDs and senators are being paid to turn up to work.
Politicians can also claim a tax-free allowance of €8,888 for running a constituency office and can claim up to €8,782 for "constituency travel". They can also get €6,348 to go towards their telephone expenses.
The commission, which is about to submit its report to Finance Minister Brian Lenihan, says TDs and senators should only be able to claim expenses tax free if they have provided receipts. All other non-taxable expenses and allowances should be taxed.
Taoiseach Brian Cowen said last night that all aspects of the Commission on Taxation report will be considered when the Government receives it.
"The Government will consider it, get a publication date, and put it into the public domain. I understand it's being made available to the Minister for Finance next week and obviously the Government will consider it then," he said.
Angry
Any move to tax expenses is likely to cause consternation among TDs, who have already reacted angrily to proposals from Mr Lenihan to make them use a swipe card to "clock in" to the Dail and Senate before they get daily and overnight allowances.
A spokesman for the Houses of the Oireachtas said it has produced a set of proposals that will result in an overall saving of up to €4m in members' expenses for 2009.
The spokesman confirmed as correct recent reports that shows some TDs are claiming up to €80,000 a year in largely untaxed expenses.
The commission has also recommended a cap on the amount of money ministers and ministers of state can claim for having an apartment or house in Dublin.
Some 16 ministers, mainly from far-flung constituencies, claimed a total of €88,335 in 2007 for accommodation in the capital.
- Charlie Weston Personal Finance Editor
