Loopholes leave millionaires with zero tax bill

ELEVEN people who earned over €1 million in 2001 paid no taxes, the Department of Finance (DOF) admitted yesterday.

In an embarrassing blow to the Government’s tax policies, the department was forced to admit that a total of 242 high earners had a zero tax rate on their incomes in 2001.

This group, with incomes over €100,000, took advantage of generous Government tax breaks for pensions investment and property schemes, which reduced their tax liabilities to zero.

The information, obtained by the Labour Party’s finance spokesperson Joan Burton, prompted widespread condemnation from all opposition parties.

Ms Burton submitted a parliamentary question earlier this week seeking details of the tax take from the country’s highest earners.

In addition to those who paid no tax, DOF also said that 149 single people and married couples with incomes over €100,000 paid tax at a rate of 20% or less.

In light of the findings, Ms Burton criticised the Government. “The figures are a truly astonishing indictment of the range of tax loopholes and avoidance measures which had been built up during the McCreevy years and which allow many of the most wealthy in Irish society to avoid tax,” she said.

In response, the department said yesterday that the Revenue is analysing data for the top 400 income earners and its report will help explain why top earners paid little or no income tax in 2001.

According to the department, the situation in 2001 was not exceptional: “There are several reasons why some persons can have a nil liability - tax relief for pension contributions, losses due to capital allowances on business investment and tax breaks like BES, film relief, urban and rural renewal reliefs.”

It added that there were arguments for and against a minimum tax rate. “Many wealthy taxpayers pay well over 20% in tax and that the effect of a minimum tax for them, perversely, might actually be a tax cut.”

Dan Boyle of the Green Party said the figures confirmed that in Irish society, the rule is “that those who have more should pay less”.