Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

SARP continues to be an important incentive. As the Deputy is aware, under the Finance Act 2018, there is no change in the level of income tax relief available in 2019 for existing beneficiaries of the programme and the new cap of €1 million is scheduled to apply to such taxpayers from 1 January 2020. In bringing forward such an approach, I was mindful of the need to proceed in a balanced way that, on the one hand and on the basis of the most up-to-date data, sought to curtail the extent to which tax relief would be available and, on the other, recognised the need to proceed in a measured and considered way in respect of those who have already taken decisions to relocate to Ireland on the basis of the programme as it applied up to the end of 2018.

It is not possible to accurately quantify the savings that will accrue to the Exchequer from the €1 million cap as this requires an estimation regarding the number of new applicants to SARP in the course of 2019 and their individual salary levels. However, curtailing the level of income tax relief was not only about prudent management, it was also about addressing the equity issues that arise from a small number of very high earners getting very significant levels of tax relief. The imposition of a cap at this level will have no effect for approximately 98% of SARP participants based on 2016 data. For example, in 2016, there were only 18 individuals out of a total of 793 with annual salaries in excess of €1 million; in 2015, there were such eight individuals out of a total of 586; and in 2014, there were such two individuals out of a total of 302.

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