6 July 2006 Edition
Millionaires pay 5% income tax
BY ROBBIE SMYTH
What a week for the Irish tax system, first was the record €109.6 million garnered from tax defaulters in the first three months of 2006 while 43 people who earned over €1million in 2002 paid less than 5% tax on their income.
The stats released on tax defaulters showed a lot of people who chose tax evasion rather than bother with the uniquely generous tax avoidance schemes created by successive governments.
The €109.6 million included €22 million from Bovale the property developers that were central to allegations of planning corruption uncovered by the Flood Tribunal. The list of defaulters included 59 bogus non resident account holders and 30 holders of offshore bank accounts.
To date investigations into insurance polices used to avoid tax have taken in €396 million. The Revenue Commissioners estimate that this investigation begun in 2004 will eventually net the state €1 billion plus.
€841 million has been garnered from bogus non resident account holders, just slightly more than the €823 million in illegal offshore funds.
In terms of the data on the top 400 earners who paid an effective tax rate of 24.4% despite earning the vast majority of their income at what should be the 42% tax rate. The figures showed that the top earners paid on average less tax in 2002 than 2001. All of the top 400 had incomes greater than a million euro annually. The figures do not included artists availing of tax exemptions and allowances on music royalties.