SUPER RICH & DOMICILE LEVY
JP McManus, the Switzerland-based businessman, has told The Sunday Independent his decision to live abroad had nothing to do with tax avoidance.
“I didn’t leave this country for tax purposes; I left because I wanted to set up a business abroad. I paid my taxes before I left the country in full. I didn’t leave to avoid paying tax or any future tax or anything like that,” he said.
The Sindo’s chief reporter Daniel McConnell said McManus had reacted angrily when questioned about his tax affairs at an event held in his honour at the University of Limerick, which was also attended by the Taoiseach.
“Mr McManus made it clear he was not impressed with being asked questions about his tax status on a day when his contribution to education was being celebrated,” McConnell said. “Moments before, while he was standing beside Mr McManus, Mr Kenny was asked should tax exiles be forced to pay more, given that the country is on its knees. Mr Kenny said no government can dictate where people live and pay their taxes.”
The article reminds readers only ten of the so-called super-rich paid the Domicile Levy introduced last year as a “patriotic tax”. The total tax take from the initiative was €1.48m – an average of €147,000 each.
“Currently there are 5,800 Irish people who declare themselves non-resident for tax purposes, and the Revenue Commissioners estimate that 440 fit into the ‘super-rich bracket,” O’Connell notes.
The take from the tax was described to The Sunday Times as “derisory” by junior minister, Brian Hayes, who said changes would have to be made.
“It’s back to the drawing board for the government to find a more comprehensive system that will deliver the results that we want,” he said. “The issue is under active consideration at the moment.”
Meanwhile, The Sunday Times reports on the latest Revenue figures showing a 15% drop in the income of taxpayers resident here earning more than €100,000.
“Despite the squeeze, the rich paid 46% of all income tax collected in 2009 – even though they make up just 5% of the country’s 2.1m taxpayers,” the newspaper notes.
The figures also indicate the curbs on tax reliefs seem to be having the intended effect.
“These figures indicate that the high earners’ restriction has achieved its objective,” said Ciarán Medlar, head of personal taxes at BDO Simpson Xavier. “Their share of the total tax burden could climb from 25% to more than 30% from 2010 because the restriction has been tightened.
“Many people received a shock when filing their 2010 tax returns when they realised they came within the scope of the high earners’ restriction for the first time.”