Levies on tax exiles will take two years to apply - Gilmore

CHARGES ON tax exiles will take two years to come into effect while people on the lowest incomes have already been hit twice with cuts, Labour leader Eamon Gilmore has claimed.

During heated Dáil exchanges he accused Taoiseach Brian Cowen of “presiding over two laws – one for tax exiles and another for people dependent on social welfare payments”.

But Mr Cowen rejected the claim and said the Government had tightened the rules on tax exiles since Labour was in power. Whether a person was “resident or non-resident” they had to pay tax for any business they had in the State, he said.

Mr Cowen then accused the Opposition of not having a “credible or honest position” on social welfare.

“One crowd says there will be no increases in income tax while the other crowd says there will be no cuts in social welfare but they will implement the necessary adjustments and policies.”

During Leaders Questions Mr Gilmore said the Minister for Finance announced in last year’s budget that “tax exiles would pay a levy to the Irish State”, but “not a single cent has been collected from that levy” and “the first amount to be collected will not be due until October 31st, 2011”.

The fairly generous conditions of the levy included an annual income of more than €1 million and Irish property worth more than €5 million a year, he said.

“Meanwhile, carers in yesterday’s Budget have been cut for the second time by €8 a week” as had people on the blind pension and widows, and “people who have lost their jobs have been cut for the second time”. And “all of these cuts will come into effect in three weeks’ time”.

The Taoiseach said he did not have the details but “I’ll certainly follow it up and see what the position is. It’s obviously a detailed Finance Act matter”.

Mr Cowen said 38 per cent of total expenditure was on social welfare and they could not make the necessary “correction” in public finances without reducing welfare spending which he insisted “this year is €3 billion more than it was in 2008, when the crisis began”.

Mr Gilmore said the Taoiseach’s answer showed he had not given a second thought to the issue of tax exiles since this time last year.

Mr Cowen accused the Labour leader of making “superficially attractive contrasts” when Fine Gael and Labour policies “do not add up”.