Tax exile rich ‘can’t be ignored’ in drive to encourage philanthropy
Frank Flannery says tax exile rich should be targeted in project to promote giving
Frank Flannery: said the Government would have to be innovative if targets for raising funding from philanthropy were going to be achieved
The chairman of the Government-backed Forum on Philanthropy, Frank Flannery, has said he acknowledges there is a “hold your nose” aspect to a proposal aimed at encouraging Irish tax exiles to invest in charities and small business.
However, he said the Government would have to be innovative if targets for raising funding from philanthropy were going to be achieved and he did not think it could be done while ignoring the 400 or so Irish tax exiles who had so much money.
The Minister for Finance, Michael Noonan, has asked the Oireachtas Committee on Finance, Public Expenditure and Reform to look at the proposal which, he said in a letter to the committee, he believed might be an attractive initiative.
Labour member of the committee, Kevin Humphreys TD, has said the introduction of the proposal, which involves changing the rules concerning the amount of time Irish tax exiles can spend here while still retaining their tax status, would turn his stomach.
Mr Flannery said he wouldn’t argue with Mr Humphreys or criticise him for his comments. “We would all prefer it if everyone paid the full whack, but we have to live with the law as it is.”
He said that if the forum’s initiative was going to achieve its targets, at a time when two of Ireland’s largest sources of philanthropic funding, Atlantic Philanthropies and the One Foundation, were drawing their activities to a close, “then we can’t leave these people out of it.”
He said that if the proposal succeeded in getting 400 Irish tax exiles to invest €5 million each in a business or philanthropic activity, creating a minimum of ten jobs within five years, as well as an additional tax payment of €1 million each year for 10 years, it would create a €2 billion fund for charities and SMEs, and an extra €400 million per annum in tax revenue.
Asked whether the scheme would allow for Irish tax relief on donations made from Irish business interests owned by the exiles, Mr Flannery said the idea was that the money would be “fresh money”, though he said the details would be a matter for the Government.
“I think Labour will go for it,” he said. “Ireland needs a bit of innovation. Why not try it for a few years and if you think it’s not worth the candle, you can stop it?”
An effort by the previous Government to extract more money from Irish tax exiles is generally viewed as having been a failure. Mr Flannery said there was still a strong case that these people should do more for their country at the present time.
In return for the investments and additional tax revenue, the tax exiles would be subject to amended rules. As matters stand, a person can only stay in Ireland for 182 days in a single year, or 282 in any two years. The scheme would be amended so it was only a one-year rule, with 182 days still applying for each year. This would mean a person taking part in the scheme could stay in Ireland for 364 days over a two-year period, as against 282.
Mr Noonan, in asking the committee to look at the proposal, said it could facilitate the airing of views by the various stakeholders, such as “business groups, civil society, and charities”. He did not mention inviting non-tax resident Irish business figures in to give evidence about the proposal.