Exchequer needs a level playing field

IN a nation where golden circles flourish, Ireland's compliant taxpayers will turn a jaundiced eye on revelations that the exchequer annually loses €100m in revenue due to tax breaks for the millionaires behind Ireland's horseracing industry.

In the aftermath of the Ansbacher tax evasion expose, the murky world of tax exemptions is increasingly coming under the spotlight.

Today, for the first time, we get a glimpse of the massive scale of the financial benefits accruing to members of the super-rich club who enjoy a tax-free status on horse breeding fees.

Creating the most generous tax regime in the world for breeders, the legislation, of which they are the beneficiaries, was framed in 1969 when disgraced ex-Taoiseach Charles Haughey was Finance Minister.

Significantly, the difference between Ansbacher and the bloodstock tax scenario is that the latter is perfectly legal. But while the exemption undoubtedly helped Irish breeders play a leading role in the international bloodstock business, it is patently obvious the primary beneficiaries are no longer in need of such a leg-up.

Put in a wider context, it is estimated that if the revenue flowing into the pockets of multi-millionaires went instead to the health service, it would be enough to create almost 1,000 extra hospital beds.

What hard-pressed taxpayers will find outrageous, if somewhat familiar, is the secretive way the tax breaks work. In a labyrinthine maze worthy of Ansbacher, the Revenue Commissioners have no records of how much money is being made through this system as the beneficiaries do not have to declare their income. So much for transparency and accountability in the tax system.

Few will quibble with the call by Labour’s Pat Rabbitte for the existing scheme to be scrapped and a modest tax rate placed on the industry.

But with some of the more powerful denizens of the equine world operating in the political backyard of

Finance Minister and well-known punter Charlie McCreevy, it was perhaps predictable he would oppose any move to change the present regime.

Under the exemption, huge benefits have been conferred on relatively few people in the industry. Claims that these tax measures are vital to prevent a flight of capital out of the country have a familiar ring.

Similar reasoning was invoked when a blind eye was turned to bogus non-resident accounts, the poor man’s Ansbacher.

At a time when tax receipts are dwindling, there is an onus on Government to review the special position of the bloodstock industry. The case for overhauling the system is all the more pressing given the dwindling flow of revenue into exchequer coffers amid swingeing spending cuts across the public service.

As the ever-widening ripples of golden circles spread, there are powerful arguments in favour of creating a level playing field with a more just system of taxation.

Even more compelling, is the glaring need to root out a culture where special deals, shrouded in secrecy, are forged by politicians for wealthy individuals who are laughing all the way to the bank.