Taxation institute finds tax shelters 'not inequitable'

The use of tax shelters by the very rich to avoid taxes is not necessarily inequitable, the Irish Taxation Institute told an Oireachtas Committee yesterday.

The institute, which was making a submission on the review of tax reliefs, also said "money would move abroad" if special tax reliefs incentives were removed.

It said the Revenue Commissioners were not overly interested in policing the amount of time tax exiles spent in Ireland on the basis that all income raised in Ireland is taxed in Ireland.

Responding to suggestions from Fianna Fáil Senator Mary White that there was "social unrest" in the country because of tax shelters for the very rich, president of the institute, Philip Brennan, said its role was not to engage in "a moral debate".

Mr Brennan said the institute was in favour of equity in the tax system and would like to see an assessment leading to "certification" of tax relief schemes.

He said the key purpose of the tax reliefs was not to reduce tax bills for the very rich, but to achieve a specific socio-economic need. He instanced the Irish Financial Services Centre, Temple Bar, the third-level sector and apartment accommodation as examples of where the policy had been successful.

But Senator Martin Mansergh said it was not true that all income raised in Ireland was subject to tax here and cited a case where a businessman told RTÉ's Pat Kenny he would have to pay €50 million in tax on the sale of his business, but he did not do so because he changed his domicile.

Labour deputy Joan Burton said "if you made €200 million- €300 million on the sale of a company", you can use schemes to limit tax on that income.

"The person earning €31,000 can do nothing, but the person with a few hundred million can choose not to pay tax," she said.