Six top earners escape tax payment
Six of the country’s top 400 earners paid no tax at all in 2002, it emerged today.
The Revenue Commissioners also found that the number of people paying less than 5% tax jumped by over a third in 2002, it emerged today.
Only 43 of the highest earners paid between zero and 5% tax, up from from 30 in 2001.
A total of six in the top wealth bracket paid no tax at all in 2002, up from five the previous year, according to the figures.
The number of taxpayers who paid less than 15% increased from 55 to 79 during the same period and earners who stumped up 20% increased from 75 to 95.
Minister for Finance Brian Cowen said the findings justified his decision in the Budget to restrict relief for high earners.
“The measures I took in the 2006 Budget will mean more and more that the tax-take rises from the better off.
“The new restriction on the use of tax reliefs will ensure that such individuals who use tax incentive schemes will have an effective rate of income tax for each year of not less than about 20%,” he said.
The minister pointed out that the top 1% of earners paid 18.6% of all income tax in 2002. The figure is expected to top 20% this year, he estimated.
Workers on the average industrial wage of around 32,000 euro paid 6% of all income tax.
Mr Cowen added that in 1997, those earning at or under a far lower average industrial wage paid over 14% of all income tax.
The ’Effective Tax Rates of the Top 400 Earners: Report for the tax year 2002’ study will be published by the Finance Department shortly.
A number of tax-free schemes will be phased out completely by the Government by July 31, 2008.
These include: the urban renewal scheme, the rural renewal scheme, town renewal scheme, relief for hotels and holiday cottages, relief for third-level educational buildings, relief for park-and-ride facilities and associated developments and relief for multi-storey car parks.
“This winding down of property-based reliefs is consistent with the greater capacity of particular economic sectors nowadays to fund such investment from their own resources, and the sizeable capital investment which the Government is itself making through major new investments,” he added.
