Thursday 29 September 2016

John Drennan: Tax is not only 'for the little people', says TD

Plan to get super-rich exiles to pay their fair share has drawn in a meagre €870,000 so far

Published 06/11/2011 | 05:00

The last government's drive to get super-rich Irish exiles to pay their fair share of tax has been a miserable failure.

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In the week where, mostly middle income, Irish taxpayers have been told by Finance Minister Michael Noonan that they face a swingeing further €1.6bn in taxes, VAT and levies, the Sunday Independent can reveal that a 'Domicile Levy' imposed by the late Finance Minister Brian Lenihan on so-called 'tax exiles' has raised a meagre €870,000 so far.

The data, secured by the Labour TD Gerald Nash, reveals that Mr Lenihan's much touted 'Domicile Levy' from his 2009 Budget is poised to raise less than €1m by year end.

The levy was introduced on those who are nominally tax exiles, but who earned an income of €1m or more and who had capital assets of more than €5m in Ireland.

It was contained within a section of the minister's speech titled 'High earners must pay their fair share' and was part of the minister's proposal to "stabilise the deficit in a fair way".

However, in its first operational year when it comes to coughing up their "patriotic duties", to date just five exiles have paid a total of €879,586.

Though the department noted hopefully the online filing system where the self-employed can file their tax returns by November 15, a less-than-impressed Mr Nash said that "it appears as though our tax exiles are as enthusiastic about their patriotic duties in the field of taxation as our judges were when it came to the judicial levy".

The Labour TD noted this looked like another classic case of "tax apparently is only for the little people'' and said "it has gone past time for those with the broadest shoulders to be forced, when it comes to national regeneration, to carry the biggest burden".

Mr Nash added that there were "surely more than five tax exiles who should qualify out there'' and warned that the scheme would "have to be improved if there is not a substantial increase in the monies secured".

However, any pressure from Labour on the issue of tax reform for tax exiles could increase tension with their FG partners.

Whilst Labour back-benchers such as Mr Nash and Kevin Humphries, and some ministers, have been tracking the progress of this levy closely, Fine Gael ministers are believed to be noticeably reticent on the issue.

Asked if the Coalition might face a serious dilemma if they had to reform the tax rules for exiles, one senior figure tartly observed: "A fair payments system for tax exiles is not a serious dilemma, it's called fulfilling your election promises."

And speaking to the Sunday Independent, Social Protection Minister Joan Burton warned that a failure by the Government to "secure a fair contribution from tax exiles would damage social cohesion".

In a response that might not be popular with her ministerial colleagues, Ms Burton warned: "If I am expected to make extremely painful cutbacks as part of the reform of the social welfare system, I would find it extraordinary that tax exiles, persons earning over €100,000 or top ministers and public servants would escape with no further cuts on their own earnings."

Sunday Independent

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