Eliminating the tax exemption for artists would have a negative impact on Irish society, Minister for the Arts John O'Donoghue said today.
Minister for the Arts John O'Donoghue: The exemption is enormously encouraging to artists
In a strong defence of the scheme, Mr O'Donoghue said there would be a fall-off in the level of "arts activity . . . as professional artists are forced to turn to alternative occupations.
"The exemption is enormously encouraging to artists, it increases the level of arts activity in the State, and it makes the difference for many artists when they reach the stage in their lives of having to consider whether to stay with an artistic career or to leave it for something more economically mainstream," he said.
Addressing a conference on the economic and social significance of the performing arts in Ireland this morning, the Kerry TD said the scheme showed "the special position that Ireland affords to its artists and to the arts in general".
It was good for Ireland's international profile and was well regarded abroad, he said.
He cited Revenue Commissioners' figures for 2001 showing that over 50 per cent of beneficiaries had earnings of less than €10,000 and 90 per cent had less than €50,000.
Although 2 per cent of beneficiaries accounted for 58 per cent of the exempted income, much of the money is earned abroad and repatriated, Mr O'Donoghue said.
Capping the level of exempt income would probably lead to less money for the Exchequer as high earners would either restructure their tax affairs or simply leave the State, he maintained. This could ultimately mean a loss of revenue to the exchequer, he added.
"There is little point in taking a principled position if the net effect is to make us worse-off as a nation and as a society.
"The absence of a cap means that major international figures live here, who might otherwise live abroad. This has a positive impact on the vibrancy of the Irish arts scene, it facilitates mentoring, and it provides role models for aspiring young artists," the Minster claimed.
As ministers and lobby groups begin jockeying for position ahead of the Budget in December, Mr O'Donoghue said he would strongly urge Minister for Finance Brian Cowen not to make amendments to the scheme despite pressure from some quarters.