Harney ‘not aware’ of tax loophole

TÁNAISTE Mary Harney denied yesterday that Government ministers were aware of a VAT loophole which builders used to evade paying up to 1 billion in tax.

The loophole on building land was closed off by the Finance Minister Charlie McCreevy in Budget 2004 last week and the Taoiseach admitted that just one scheme cost the exchequer 18 million.

Under the loophole, development land was let out to builders on a short-term basis, allowing the transactions involving the sale of the site and the building to be separated, thereby dodging VAT.