Drumm’s tax bill under scrutiny

SHAMED ex-Anglo Irish Bank chief executive David Drumm’s financial affairs are again at the centre of controversy after claims were made over the amount of income tax he paid.

Widespread reports yesterday suggested the banker — who has left the country and now lives in Massachusetts in the US — paid an insignificant sum on his massive €12.47 million income while on the bank’s board.

However, it emerged last night that the failed banker in fact paid €6.3m in income tax during the 2004-2006 period.

Documents filed by the Revenue Collector General’s insolvency unit, as part of Mr Drumm’s bankruptcy application in Boston, show he received income tax rebates in 2004, 2005 and 2006, when he was one of Ireland’s most highly paid bankers.

Pay and file income tax returns for Mr Drumm show he declared an income of €276,749 from Anglo in 2004, with €103,245 of this figure spent on PAYE taxes.

The following year he declared €833,953 from the bank on which he paid PAYE of €336,612.

In 2006 he declared income from Anglo of €852,741 and paid PAYE of €344,382.

The Irish Times reported yesterday that Mr Drumm had paid a tiny sum of money in income tax during this period, leading to widespread speculation on the issue.

The situation occurred after what was described as “a misinterpretation of a Revenue document filed in a Boston court”.

The director of the economic think tank, TASC, Nat O’Connor, said the controversy indicates the lack of transparency on the actual tax payments of the most wealthy during the Celtic Tiger era.

Mr O’Connor said: “There is undue focus in Ireland on marginal tax rates rather than the effective tax rate or what people actually pay. Over the last number of years we had a whole lot of property-based exemption schemes and other methods for people to lower their tax liabilities. The property schemes were aimed at getting people to buy property to receive income tax reliefs. It is only someone with serious money that can avail of these schemes to the greatest extent.”

He added: “The light touch economic approach extended to the tax system. No one went along and said let’s sort this out, let’s get back to basics, although in fairness to Revenue, people inside may well have been questioning this.”

The problems in the Irish tax system are exacerbated by the lack of information released on payments by the Revenue Commissioners, he said.

“We don’t report on this stuff systematically and some major tax reliefs still exist. These include ones on pensions and it looks to be the case that in many incidences people are not using these for pensions but simply a legal way to amass money without paying their full tax,” he said.