McCreevy closes in on horse breeders
Bowing to years of public and political pressure, Mr McCreevy said those earning stallion, forestry and greyhound stud fees will now have to make income returns to the Revenue Commissioners.
The move will allow the Government profile the earnings of the industry, with a view to taxing them at a later date.
Horse breeders criticised the measure last night, claiming that slapping corporation tax of 12.5% on the sector would yield no more than 10 million extra to the Exchequer. However, they were unable to put a figure on the total level of fees earned annually by the sector.
The industry was exempted from paying tax on stud fees 30 years ago.
The Irish Thoroughbred Breeders’ Association said last night: “We are confident that any objective study will indicate a clear benefit to the Exchequer from the current tax exemption in the case of stallions.”
An industry spokesman said it had “nothing to fear” from the returns it will be obliged to make once the new law is in place.
But critics of the industry claim it has earned millions in profits that ought to be subjected to tax.
While Mr McCreevy signalled his willingness to at least examine the possibility of taxing stud fees when he published the Bill yesterday, he said it would be a number of years before any decision could be taken.
Industry sources said the real damage would be done to smaller players in the breeding industry who syndicate stallions in order to reduce the risk. “It is high risk and the odd success is required to counterbalance the losses involved,” one source said.
Mr McCreevy said the Finance Bill reflects his determination “to spread the burden of taxation in an economy that operates one of the lowest tax bases anywhere in the world.”
With personal taxes at low levels the Exchequer has to look at other means of increasing income, he said.
In keeping with that aim, the Finance Bill contains a series of measures to close off tax loopholes.
The Bill also extends capital gains exemption to all sporting bodies and any organisation set up to promote sporting activities.
