Several parties are angry the scheme allows millionaire artists to avoid paying tax on significant portions of their income, and have demanded that Finance Minister Brian Cowen amend it.
The scheme is one of 20 similar tax relief mechanisms currently being reviewed by the minister.
But groups representing a range of artists yesterday told the Oireachtas arts committee that there would be little gained from tampering with the scheme.
The main advantage of the initiative was that it allowed artists more money "without calling directly on the Exchequer", said David Kavanagh of the Irish Playwrights and Screenwriters Guild.
Working artists' income, he added, could be defined in two ways: "First of all, there's very little of it, and (secondly), it comes in very irregularly. But that income is improved by the artists' tax exemption scheme."
Ending the exemption would mean the State simply having to subsidise artists directly instead, and therefore the Exchequer would not benefit, Mr Kavanagh said.
Capping the scheme introducing an income ceiling over which artists could not claim exemption could be counter-productive too, he warned. This was because wealthier artists might leave the country if a harsher tax environment prevailed.
The committee heard similar warnings from the Sculptors' Society of Ireland and the Association of Irish Composers.
Between them, the three organisations represent more than 50% of the artists covered by the scheme, Mr Kavanagh said.
The most recent figures, for the nine-month short tax year in 2001, showed that 1,323 artists claimed exemption at an estimated cost to the Exchequer of €23.5 million.
About one-in-two of these earned less than €10,001 that year.
But TDs' anger has focused mainly on those earning vast sums and qualifying for exemption. In 2001, 31 artists earned between €200,001 and €500,000, and another 28 pulled in between €500,001 and €10m.
Committee member Fiona O'Malley TD said a cap on the scheme was necessary to "protect the public purse", adding: "An awful lot of people would feel slightly uncomfortable about millionaires not paying tax."
Mr Kavanagh, however, said it was "not true" to say that millionaire artists did not pay tax. A study by PricewaterhouseCoopers of the 2% of highest earners had shown only 35% of their income related to creative work and was exempt, while the remaining 65% was taxable.
In addition, those 2% directly employed an estimated 250 to 300 people, Mr Kavagh said, all of whom were paying tax.