Call for retention of artists' tax exemption

Millionaire artists will come under great pressure to leave the country, other artists will be unable to continue their work, the Exchequer will lose money and a "crisis" will be engendered in the arts if the Artists' Tax Exemption (ATE) is abolished or capped, it was claimed yesterday.

An artist like U2 lead singer Bono is "priceless" and, if he left, Ireland would lose an extraordinary economic advantage, David Kavanagh of the Irish Playwrights and Screenwriters Guild said.

He told the Oireachtas Joint Committee on Arts that 86 per cent of the 1,300 artists who benefit from the ATE have average exempted income of under €50,000, with 50 per cent earning under €10,000.

By staying here, the small number of high-earning artists make an immense contribution to Ireland's enviable arts reputation internationally and to the domestic economy. He said it was also untrue to say millionaire artists paid no tax, as the ATE applied only to creative earnings.

An artist's taxable earnings typically came to twice their tax-free earnings.

The case for retention of the ATE, introduced in 1969, was made to the committee by Mr Kavanagh and representatives of other artist organisations. The ATE has been listed with 20 other schemes in a review of high earners and tax initiated by the Minister for Finance last June.

About 30 artists account for 58 per cent of tax theoretically forgone under the ATE. That theoretical tax loss fell from €37 million in 2001 to €24 million in 2002.

While committee members yesterday indicated support in principle for retention of the ATE, PD TD Fiona O'Malley favoured a cap on it. She said those who generated millions in creative income should be subject to tax.