The Arts Council welcomed the retention of the artists' tax exemption scheme tonight but expressed disappointment that it is to be capped at a level of €250,000 in any one tax year.
Chairperson Olive Braiden said any further restrictions on the scheme, which allows income arising from the creation of a work of art to be earned free of tax, were unwelcome.
"While we are pleased that the Government recognises that the majority of the scheme's beneficiaries struggle for financial viability year on year, and that these artists can still benefit from the exemption, we are disappointed that an upper limit cap has been put in place," she said.
"The scheme in itself is limited - as it applies to composers, visual artists and writers and their creative work - it does not apply to actors, musicians and choreographers.
"The news this afternoon that it is to be restricted even further is not welcome." Ms Braiden said only a small number of high earners benefited from the scheme. "This small number of beneficiaries - approximately 2% - who have enjoyed global commercial success, are still liable to pay tax on a significant share of their income," she said.
"The only part of their income that had been tax free is the income arising from their creative work. "These high earning artists are mostly working in popular music and writing. With this upper limit now introduced, commercially successful artists may be tempted to work elsewhere in more attractive and lucrative cultural markets in France, the States or the UK and may arrange to have their income taxed elsewhere.
"The Irish exchequer could therefore lose out on these artists non-exempt tax income, which would come in to the country from touring, box office sales receipts etc."
Ms Mary Cloake, Director of the Arts Council, said the introduction of the tax exemption was an acknowledgement that artists have a unique place in society. "Today's news that the scheme is to be capped suggests an incomplete understanding of the inconsistent nature of artists earnings, with even the most commercially successful of artists having very lean years when earnings are close to zero," she said.
"€250,000 earned in a very successful year may be the only income an artist has for five, eight or 10 years."