MILLIONARE MUSICIANS TO LOSE IRISH TAX FREE STATUS
The tax free status accorded to writers, artists and musicians in the Irish
Republic is to be reviewed, with a minimum tax rate or sliding scale of relief's
likely to be introduced for top earners.
The review has been announced by finance minister Brian Cowen in response to
widespread public anger that millionaires in the music business and other fields
have been using relief schemes that allow them, legitimately, to avoid paying
any tax on their earnings. Cowen has promised that the changes recommended by
the review will be put in place in his budget for 2006.
The tax free scheme for writers, artists and musicians was introduced more than
30 years ago by former Taoiseach Charles Haughey, an arts patron who was then
finance minister. The scheme, unique to Ireland, was intended to show how the
country valued artistic and creative talent, as well as being of practical help
to struggling artists.
At the time there were few high earners in the Irish arts. Today, music groups
like U2, The Corrs and Westlife, singers including Enya, Van Morrison and Chris
de Burgh and shows like Riverdance, are earning millions worldwide.
Under the scheme, according to figures from the Irish Revenue Commissioners for
2001, 28 artists and musicians earning between half a million and ten million
euros paid no tax. In total there were 1,323 claims for tax exemption involving
80 million euros in income, with just 446 of these from artists earning less
than 5,000 euros.
Green Party member of the Irish parliament Ciaran Cuffe called for the tax
benefits under the scheme to be capped or operated on a sliding scale.
He said: "This scheme was meant to assist struggling artists, not bolster those
on high incomes. When you realise that some of the people who now benefit are
earning an average of over a million euros, it's time to look at it again"
Taoiseach Bertie Ahern told parliament that with restrictions on the way, "the
game is up¨ for wealthy people who used relief schemes to avoid paying tax. His
deputy, Mary Harney, argued that, irrespective of relief's, high earners should
be subject to a minimum tax rate of 20%.
"I don't believe that anyone should be able to write off 100% of their income by
using relief schemes" she said.