The wealthy should pay a minimum 20 per cent tax rate and the tax-free status of artists should be ended, the Fianna Fáil chairman of an Oireachtas committee has said.
The Oireachtas Finance and Public Services Committee will today hear testimony from the chairman of the Revenue Commissioners, Mr Frank Daly.
Recent figures from the Commissioners showed that 11 people earned €1 million in the 2001 tax year yet paid no income tax. The same figures showed that 250 people each earned more than €100,000 a year and yet paid no tax by using legally available tax breaks.
Calling for changes last night, the chairman of the Oireachtas committee, FF Laois-Offaly TD, Mr Seán Fleming, said: "I believe in a low-tax economy, not a no- tax economy. This is a matter of tax equity and when the general public feel that a number of high-income earners are not paying income tax it can undermine the integrity and public confidence in the taxation system.
"It is necessary for the Oireachtas to ensure that public confidence is maintained in the system," Mr Fleming said.
It is understood he has already made his views known to the Minister for Finance, Mr Cowen, who is still preparing his Budget. The Department of Finance has long argued against a minimum tax rate on the grounds that large numbers of high earners would use it to bring down their tax bill.
However, Mr Fleming said abuses would not occur. "This would not automatically lead to a rush of taxpayers who are paying at a higher rate to reduce their tax to 20 per cent. They already have that option and only a minority are availing of it and approximately 250 people have over-used it to the extent already highlighted."
Meanwhile, the tax-free status on artists' earnings introduced by Mr Charles Haughey in the 1960s should be overhauled, Mr Fleming said.
"The tax exemption which artists can claim should be limited to the average industrial wage as this scheme was originally intended to help struggling artists," he said. "The scheme was never intended to facilitate very wealthy artists shield themselves from all tax from their artistic endeavours."
