I move amendment No. 31:
In page 42, before section 20, but in Chapter 3, to insert the following new section:
"20.—The Minster shall by regulations determine the form of tax returns in such a way as to facilitate the compilation of statistics on the extent to which tax reliefs are availed of by taxpayers.".
The purpose of the amendment is to ensure tax returns are formatted in such a way as to facilitate the compilation of statistics on the extent to which tax reliefs are availed of by taxpayers. It is difficult to get information on two types of tax relief available to certain individuals. The Department continually informs me it is unable to supply the cost of the reliefs or indicate who are the beneficiaries.
During a recent discussion on the exemption from income tax for stallion owners, a distinction was drawn between two types of stallion owners, small operators with only a couple of stallions and large operators with an international dimension. Other exemptions apply to artists and woodlands. We do not have available to us information on which to make a judgment as to the effectiveness of the reliefs, the amount of tax foregone or their economic benefit, particularly as time passes. On what basis would a Government review of specific reliefs be carried out?
As I stated previously, there is a justifiable economic argument for incentivising certain types of economic investment or behaviour through the tax system and an examination of the range of tax exemptions available, particularly those introduced in recent years by the Minister's predecessor, would show this to be the case. I am on record as supporting, for example, reliefs available under the business expansion scheme, BES, and reliefs for the film industry and research and development because the latter is critical to the economy. Last year, the committee engaged in a useful debate on the film industry with various interested parties over a number of days. As a result, certain aspects of the relief package became more generous and defined, while others, including the area covered by one of the Government amendments, were tightened to ensure the country derives a real benefit from the relief.
The purpose of the amendment is to change the returns in order that we receive information on tax reliefs in a formatted manner. It is not acceptable that no information is available on what certain reliefs cost, whom they benefit and whether the tax foregone could be more usefully spent. Some reliefs are up to 40 years' old and the Minster and I may agree they are great but information is required.
When the former Minister for Finance, Mr. McCreevy, extended property based reliefs to the upper Shannon region, he stated the area would come to resemble the Klondike as a result. That may have happened but no tracking is in place to enable information to be captured so that rational decisions can be made on whether reliefs and benefits are well targeted and meaningful or have outlived their usefulness.
By and large, I do not have a problem with the proposition that the cost of a certain relief may be so small that the cost of administering a detailed tax regulation would be greater. We should be generous in this respect. To return to the Minister's friends, the stallions, if an argument can be made for distinguishing between small operators and the major players, that would be fair enough. Similarly, we all favour tax breaks for struggling artists whom we recognise may earn significant income for only short periods of their working lives. Tax breaks for artists are, therefore, reasonable and fair. Again, however, we have no information on which to make distinctions. In a recent reply to a parliamentary question, for example, the Department indicated that one artist may have benefited from a tax exemption of approximately €28 million. While this does not appear credible, it was reported in a newspaper.
A recent area of development, on which I tabled several parliamentary questions to the Department last year, is the tax breaks introduced by the Minister's predecessor, Mr. McCreevy, for professional sportsmen. I understand the main beneficiaries will probably be professional rugby players, possibly some professional soccer players, although most of these are based in England and pay tax in the United Kingdom, and possibly some jockeys. Again, no information is given on who benefits from the reliefs and what are their costs, which would allow us to make some rational decisions.
I requested information from the Minister regarding nursing homes. Apart from informing members on the number of available beds, he was unable to provide precise details. That is not the way to structure economic or taxation policy.
I have also asked the Department detailed questions on pensions, particularly small, self-administered funds. Most salaried employees are restricted in the amount of tax relief they can avail of for pensions. While this is correct, proprietary directors, who can set up small pension schemes and others introduced last year, do not have such limits. Last year the then Minister for Finance introduced the capacity to borrow to fund such schemes. The Minister for Social and Family Affairs wants to amend this provision. However, again there is no detailed information. I tabled many parliamentary questions on the cost of such reliefs. The replies I received state the Department of Finance has no information on these or on the relief for sportspeople. It is a crazy scenario when a single person earning just above the average industrial wage, at €32,000, will pay some of his or her income at the 42% rate.
There is a golden area in the tax structure where some people are completely or significantly exempt from making any contribution in taxes. Those people use our roads. If they have an accident, they use our hospitals. Their children use publicly-funded schools. Why can we not get the information on the reliefs? If it is decided to retain tax incentives, information will be available as to who will benefit, the broader benefits available for the community and the duration they should be in place. This amendment seeks to get that detailed information from the Department of Finance and the Revenue Commissioners. I accept that later in the year some information on exemptions will be available. The study undertaken by the consultants may also give some information about areas of activity. However, it is extraordinary that approximately 120 different schemes are available for some people to arrange their affairs to legitimately avoid significant amounts of tax or exempt significant amounts of their income from any form of taxation.
