Vol. 548 No. 5
46 Mr. Durkan asked the Minister for Finance the various categories of sports person likely to qualify under his new sports person tax concessions; if the proposals are confined to sports professionals; and if he will make a statement on the matter. [5542/02]
Section 12 of the Finance Bill provides for the introduction of a new scheme of relief from income tax on the direct sports earnings for Irish resident sports persons involved in certain sports. The categories of sports persons that can avail of this relief are listed in Schedule 23A of the Taxes Consolidation Act, 1997, which provided higher contribution limits for retirement annuity purposes. These categories are an athlete, badminton player, boxer, cyclist, footballer, golfer, jockey, motor racing driver, rugby player, squash player, swimmer and tennis player.
Qualifying sports persons, whether in a professional or semi-professional capacity, will be entitled to a deduction from earnings from direct participation in their particular sport of the order of 40% for up to ten years of assessment back to and including the tax year 1990-91, provided the sports person was resident in the State in these years.
Eligible income under the scheme will arise from direct participation in the sport and will not include income accruing from sponsorship, advertising or endorsements. The relief can be claimed in the year in which the sports person ceases to be permanently engaged in that sport, provided the individual is resident for tax in that year, and will be provided by way of repayment of tax.
Will the Minister define "semi-professional"? Gaelic games are amateur sports, but it could be argued that they, and the GAA in particular, receive sponsorship which is beneficial to the sponsors. Would the Minister be willing to incorporate the various aspects of its work plan in the scheme, and could that be done at this stage? In regard to the definition of the term "semi-professional", would it be possible, in today's age of sponsorship of sports which are in fact amateur, to include amateur sports under that heading?
Whether a sports person is a professional or a semi-professional is not relevant to this tax rebate. This tax rebate will operate in the year in which a person retires. It will be paid by way of repayment of tax on gross earnings from direct participation in sport. If a Dáil Deputy is also a semi-professional soccer player with Shamrock Rovers, the tax rebate will not relate to his earnings from the job of Dáil Deputy. It will relate only to his gross earnings from playing league of Ireland football with Shamrock Rovers. In the year of his retirement tax will be recalculated and his entitlement to a rebate will be determined. He will pay tax each year on the same basis as everybody else, but the year in which he retires, he will be entitled to a rebate of 40% of his gross earnings from direct participation in the sport.
I know there are junior clubs in our county with players competing and training as hard as county players did 25 or 30 years ago. However, this is not a grant-type scheme. This is for people who are directly participating, whose earnings relate to a particular sport and who have short earning careers. I am aware of many people in my county who had a successful three or four years in a particular sport, made a living, paid a lot of tax and are now standing around street corners of certain towns. This has always struck me as ridiculous.
This measure will benefit the 98% of people who make a modest living from sport. If the GAA were to change its rules and pay players for direct participation, that could be incorporated. It is not a grant type relief, it is to recognise the short earning careers of people who get money directly from sport. It will not reimburse tax for other activities, such as endorsements, sponsorship or television appearances. It is similar to the artists' exemption relief.
What was the genesis of this proposal? Did the Minister receive representations to introduce the scheme or is it a "McCreevy special"? Was the Minister standing in the Curragh or Lansdowne Road when the idea struck him or did specific sporting bodies or individuals contact him to discuss such a scheme?
Like most of the brilliant ideas of various Finance Bills, from SSIAs to changes in the pensions regulations, no one made representations to me. I could outline a variety of changes I have made over the years and the geneses were always my own ideas. Many years ago when I was a member of the Opposition, greater contributions were allowed for self employed persons who made their living from sport. The Jockeys Association made the case that jockeys be allowed, as they are in Britain, to put more than 15% of net relevant earnings into pensions. The idea arose ten or 12 years ago and has been around for some time. The last Government considered doing something similar but the genesis of the idea did not involve representations made at Lansdowne Road, the Curragh, Cheltenham or the pitch and toss banks in Maynooth.
Does the Minister agree the real problem is dealing with elite amateur sports per sons who dedicate so much of their time to achieve the heights of amateur sport? Given that the Minister's Department is responsible for lottery funds, can these people not be compensated by sufficient grants through the lottery scheme to allow them to cover their costs and expenses while remaining amateurs, instead of expanding the discrepancy between semi-professionalism and elite amateurism? A person who reaches the heights of inter-county football must travel and train five days a week. County representation should be rewarded by an elite person's sports grant administered by the Department of Finance to cover costs.
Accepting the Minister's bona fides and the thrust of what he is doing, would it make more sense and provide greater incentives to badly paid sportspeople to continue to participate if there was a tax relief on income in the year it is earned rather than as a thank you gift when they stop earning?
When I was examining the matter, I considered the idea of having the relief in the year the money was earned. I decided against it because my personal experience is that people who make a successful career in sport when they are in their 20s are inclined to fritter away that money. Deputy Barrett and I have both known people in our non-political lives who earned a lot of money in their early 20s but then through accident or injury were unable to earn more. If they had their time back when they reached 30, they would do it differently. I came up with this proposal to do it in reverse – a person pays tax in the normal way and then, when he or she has more sense, he or she appreciates it more.
Is this the Curragh of Kildare school of economics?
There are people nationally and internationally who made a great deal of money but wound up with monstrous tax bills and had not a penny at the end of their sporting careers, in spite of giving many hours of enjoyment the length and breadth of Ireland.
There are grants available through the Minister for Tourism, Sport and Recreation to bodies to do what Deputy Barrett mentioned but they do not cover GAA players. The question of payments to GAA players must be answered by the Gaelic Athletic Association.
The Curragh of Kildare school of economics.
Question No. 47 withdrawn.
