Nine of the tax reliefs due to be examined by the Department of Finance and the Revenue Commissioners over coming months are already scheduled for abolition in July 2006, after being given a stay of execution in last December's budget. And full information due to the Revenue about the controversial stallion nomination tax exemption will only arrive a matter of weeks before next year's budget.
The Taoiseach, Mr Ahern, said in an RTÉ radio interview yesterday that the "game is up" for rich people using reliefs to avoid a significant amount of their tax liability, indicating that restrictions are on the way. The Minister for Finance, Mr Cowen, said the review of the reliefs would begin immediately.
The nine reliefs due for abolition in mid-2006 are property-based allowances. It is unclear how the review now under way will affect the future of many of these schemes although, given the decision to submit them to external examination, it appears possible that the Government could chose to continue some of them in a different form.
Revenue data have shown that these schemes, such as those set up to encourage investment in car parks, hotels and other property-related schemes, are among the key ones used by the super-rich to reduce tax liability. However, among the areas to be examined will be how this can be avoided.
The bulk of the property-related schemes had been due to end this month but, in last December's budget, the former Minister, Mr Charlie McCreevy, extended the termination date by a year and a half.
It is explicitly stated in this year's Budget documents that "the termination date for various schemes set down in the Finance Act 2004 will remain unchanged", indicating that the July 2006 deadline remains.
However, with a full examination of these and other reliefs now being planned, it remains to be seen what view the Minister takes of the future of property based schemes.
Four other tax reliefs also scheduled for external examination under the scheme are those for investment in nursing homes, private hospitals, sports clinics and childcare facilities.
The review is also to examine information due to become available next year on the amount of income earned by individuals in areas exempt from tax - including stallion nomination fees, greyhound stud fees and income from the use of woodlands. However, under a procedure put in place by Mr McCreevy, income earned in this area during the 2004 tax year is the first on which information must be returned to the Revenue.
This information will not all be available to the Revenue until mid-November 2005, just weeks before next year's budget. While the Revenue may be able to make reliable estimates in advance, the short timeframe may make it difficult to act in Budget 2006.
Artists' exemption is also due to be reconsidered in a move that could have major implications for high-earning authors and rock stars resident here.
