Mary Hanafin (Dún Laoghaire, Fianna Fail)

The artists' exemption was introduced in 1969 to create an environment in which the arts could flourish. In 2007, a restriction was applied to the scheme which capped the relief at €250,000 per annum.

In 2009, the Commission on Taxation recommended the abolition of the exemption. As a result, the scheme was reviewed following which the Minister for Finance announced in last December's budget that, from the 2010 tax year, the restriction of reliefs applicable to the exemption would be changed by imposing a new entry level threshold to the restriction at adjusted income levels of €125,000, with the full restriction applying at €400,000. This change was effected in the Finance Act 2010.

On Second Stage of the Finance Bill 2010, the Minister for Finance announced the further review of the effectiveness of sectoral tax expenditures with the results feeding into the 2011 budget. This review required an assessment to be undertaken by Ministers into the effectiveness of tax expenditures within their sectors of responsibility that were examined by the Commission on Taxation. This review has been completed and was sent to the Minister for Finance earlier this year.

The artists' exemption scheme, which has been in place now for 40 years, marks Ireland out as unique in Europe in its support for its artists. The rationale behind the legislation was, inter alia, to create an environment in which the arts could flourish and to encourage Irish artists on modest incomes to remain here rather than go abroad to earn their living. The scheme has been of great benefit and provides encouragement for artists on modest incomes to practice their creative skills. In fact, most of those benefiting are on relatively low incomes. In 2007, 69% of those who benefited from the exemption had incomes of less than €20,000 per annum; 77% had an income of less than €30,000 and 82% had an income of less than €40,000. I have no plans to have any further review of the scheme carried out at this time.

See this speech in context