The Government has intensified its efforts to reduce tax avoidance by closing nine more loopholes used by high earners and corporations to reduce their tax bills, writes Arthur Beesley
The moves, announced in the Finance Bill published yesterday, follow the shutting down of two exemption schemes in the Budget and the abolition of another one since then.
But Opposition parties seized on the initiative, saying the Government could have shut down many of the schemes years ago.
Introducing new measures in the bill, which gives effect to the Budget, Mr McCreevy said specialist taxation consultants had created an industry from the legitimate avoidance of tax.
He said: "Tax advisers can be very creative in exploiting opportunities in tax legislation to develop tax avoidance schemes or to use provisions in a way never intended when the legislation was introduced."
Exemptions linked to student accommodation, oil exploration, film development and the sale of rental income from buildings were closed, although Mr McCreevy said he was unable to quantify the likely benefit to the Exchequer.
There was no move to collect tax from stallion fees immediately,leading Opposition parties to claim Mr McCreevy was not serious about bringing the bloodstock industry into the tax net.
Stallion-owners will be obliged from next year to make a return of their exempt income to the Revenue for the first time.
But Mr McCreevy said an assessment of potential tax revenues from the sector would take "a few years" to complete.
The initiative was described by the Green Party finance spokesman, Mr Dan Boyle, as an "administrative cop-out".
His Labour counterpart, Ms Joan Burton, said: "Requiring this wealthy industry to declare its income in 2004 simply confirms that nothing will be done about imposing a reasonable tax regime on it until 2005 or later."
The Finance Bill copperfastens the Budget, which itself introduced a range of stealth taxes which will significantly increase the burden on middle and high earners.
While certain excises and VAT rates rise, a widening of the income-tax bands did not compensate for inflation.
With the public finances still under pressure from the economic downturn, Mr McCreevy introduced a range of new measures which will increase the potential tax liability on workers and their employers. Other measures included a general provision covering refunds on overpaid tax and interest on such refunds.
In addition, sporting bodies received exemption from capital gains tax. The Government also moved to make prosecuting oil- launderers and makers of counterfeit spirits easier.
Fine Gael's finance spokesman, Mr Richard Bruton, said: "The Minister would have us believe that tax loopholes have created the yawning gap in our public finances. But the real cause lies elsewhere."
Claiming that the Government had deliberately adopted tax measures that undermined revenue, he said its spending policies had only increased pressure in an overheating economy.
"Now as the realities of a tough competitive world reassert themselves, the Minister is determined to make ordinary people pay with their jobs and their living standards for his mistakes," Mr Bruton added.