‘Unfair’ artistic legacy to be scrapped

IT was an idea of the late Charles Haughey, but came into its own during the Celtic Tiger boom with Hollywood stars and Spice Girls relocating to Ireland to avail off it, but among Brian Cowen’s final acts will be the practical ending of the artists’ tax exemption scheme.

On page 97 of the Government’s four-year plan, the scheme which was set to encourage a flourishing of the arts in Ireland not seen since the Celtic Twilight is ended with tax-free earnings from artistic endeavours being capped at €40,000.

Until 2006 when a €250,000 cap was placed on the level of tax-free earnings, all income through artistic endeavour was completely tax free.

Over the years, writers such as Irvine Welsh, DBC Pierre and Frederick Forsyth moved to Ireland partially to avail of the generous tax arrangements.

All these writers have since left, Mr Welsh particularly despondent about the recent turn in Irish economic and cultural fortunes.

The policy was also seen as crucial in encouraging local artists such as U2, Enya and Seamus Heaney to remain.

The tax exemption was introduced by Charles Haughey when he was minister for finance in 1969. Intended to help struggling artists, although many saw it as an attempt by Mr Haughey to curry favour with those who otherwise might have been more critical of his materialistic passions, it has been criticised in the past for allowing high-earners to escape paying their fair share.

The scheme was highly criticised in last year’s Commission on Taxation report which labelled it unfair and recommended that it should be scrapped.

The 2006 capping of the exempt income has resulted in some high-earning individuals moving their tax residency abroad. The most infamous case being U2, who moved their tax residency to The Netherlands.

Perhaps the final nail in the coffin for the exemption scheme among the public was news earlier this year that former taoiseach Bertie Ahern actively sought the exemption on a book ghost-written by historian Richard Aldous for which Ahern received more than €400,000 as a publisher’s advance .

It is unknown whether Mr Ahern had to pay back any of his advance due to the spectacularly poor sales of his much publicised biography, or if he may consider joining the “artistic” flight out of the country.