Joan Burton (Dublin West, Labour)
Link to this: Individually | In context

Question 150: To ask the Tánaiste and Minister for Finance the number of artists who have submitted returns in respect of income tax payable in relation to qualifying artistic work; the average and highest amounts of gross income and tax payable; and the number of artists who have reported income above the taxable amounts and in bands or amounts of €50,000 above the threshold. [35952/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

I assume that the Deputy is referring to the threshold relating to the restriction on the use of tax reliefs by high income individuals, which I announced in Budget 2006 and which took effect on 1 January 2007.

While preliminary tax payments will have been received for 2007, income tax returns, which will demonstrate the effect of the restriction, are not due to be made until late 2008. It will be some time after that before the statistics the Deputy has asked for will be available.

The restriction on the use of tax reliefs is designed to address the issue of a small number of individuals with high incomes who, mainly by means of the cumulative use of various tax incentive reliefs, have been able to reduce their income tax liability to a very low level or to zero. Such individuals are no longer able to do so. The aim of the restriction is to raise the effective income tax rate of high income individual affected by the measure towards 20 per cent. This is achieved because the total amount of relief an individual can obtain from the specified reliefs is limited to 50 per cent of his or her adjusted income. This means that a minimum of one half of the individual's income will be taxed, mostly at the 41 per cent rate. Allowing for the standard rate band, this is equivalent to a 20 per cent tax charge on the individual's full income.

The method used to increase the tax rates at which these high income individuals pay tax effectively addresses the equity concerns raised over the past number of years while, at the same time, ensuring that the intended incentive effects of tax schemes will continue to deliver.