Not a good news for those who slogged and earned but have to pay a hefty 42% tax!!!.
This is on top of the 21% Value Added Tax (VAT) for most of the thing one buy!
One in eight top earners paying less than 5pc tax
The figures were revealed yesterday by Finance Minister Brian Cowen, resulting from a Revenue Commissioners’ study of the effective tax rates of the “Top 400″.The three who paid no tax represented a reduction from six in the previous year but the 45 paying from 0 to 5pc showed an increase from 37 in 2002.
The highest proportion of the 400 top earners — 119 — were in the 35 to 40pc tax bracket while 80 were in the 40 to 45pc range.
Comparing the years 2002 and 2003 — the latest date for which figures are available — the number of taxpayers with an effective rate of less than 15pc increased from 79 to 80 while the number with an effective rate of less than 20pc increased from 95 to 104.
In both 2002 and 2003, about three quarters of the taxpayers concerned had effective tax rates of 20pc or more and about half had effective rates of 35pc or more. Fine Gael Finance spokesman Richard Burton said the figures revealed how “this Government lets millionaires pay no tax.”
He said: “It has failed to move to introduce a fairer system of tax that ensures that everyone pays their fair share, not just middle-income PAYE workers.”
The study showed once again “how some high-earning taxpayers can manage to entirely avoid paying tax by astute use of tax-avoidance measures.”
“The study also shows that the number of top earners paying less than 20pc has increased by one-third,” he said.
The figures were seized upon last night by Labour’s Finance spokesperson Joan Burton as “a shocking indictment” of Fianna Fail’s tax record over the past 10 years.
“Fianna Fail has presided over a tax regime that has allowed super earners to use a range of tax loopholes and avoidance measures to minimise their tax liabilities — and some millionaires to avoid tax liability altogether — while workers earning at or just over the average industrial wage have had to endure tax rates of 40pc and more,” she said.
Ms Burton added: “The vast majority of workers accept that they have to pay taxes in order to provide for the range of vital public services on which our society depends. It is now time the government took steps to ensure that super earners do likewise.”
Mr Cowen said that the vast majority of those with high incomes pay tax at or close to the top rate (42pc in 2003) and the top 1.5pc of income earners pay more than a quarter of all income tax in the State.
After Budget 2007, he said, nearly 40pc of income earners at the lower end of the income scale pay no income tax.
But he said that yesterday’s figures showed that, “historically, there have been some individuals with high incomes who pay a very low level of tax.”
Legitimate
He added: “While their use of legitimate reliefs is entirely legal, it did give rise to questions of equity and further justifies and reinforces the valid reasons for his decision in Budget 2006 to restrict income tax relief for high earners.”
Mr Cowen claimed the measures introduced in Budget 2006, to take effect from this year, will both “greatly restrict the availability of special tax incentives — especially in the property sector — and reduce the ability of high earners to offset these reliefs against annual income.
“The restriction of relief measures which took effect from the 1st of January this year will mean that the tax take from the better off will rise and the tax system will be more equitable as a result,” he said.
Mr Cowen also reiterated the intention of the Government to further examine tax reliefs and incentives in Ireland.
- Source