The percentage of PAYE and self-employed taxpayers earning over €100,000 a year has more than doubled in less than three years, the Minister for Finance, Mr McCreevy, has revealed.
In a preliminary report, the Revenue Commissioners have said that 53,600 people will declare six-figure incomes when the tax year ends on December 31st, the Minister told the Dáil.
Last night, the Revenue Commissioners credited the use of the self-assessment tax system, higher salaries and tougher audits by Revenue inspectors for the dramatic rise in the number of high-income earners.
Sixteen thousand tax audits were carried out by the Revenue during 2001, yielding €208m. "Most cases are chosen for audit following a risk analysis which may suggest the possibility of incorrect returns for any of the taxes.
"Selection of cases on this basis has proved to be very successful. There is also a small random element which is regularly reviewed," the Minister declared.
Over 30,000 of the 53,600 run their own businesses, Mr McCreevy told Labour's finance spokeswoman Ms Joan Burton TD. In 2000, just 14,609 self-employed admitted that they earned as much. In the year to April 6th, 2000, just 22,470 declared income of above €100,000, according to the Revenue's Annual Statistical Bulletin 2000.
Though unable to fully explain the major increase, the Minister told Ms Burton that tax shelters had been tightened in recent years, and again in Budget 2003.
The improvement highlighted problems about the accuracy of the 2000 figures, said Ms Burton. "Does the Minister not find this figure to be truly astonishing for the years when the Celtic Tiger was roaring away. In the same year, sales of top of the range Mercedes and other expensive cars averaged around 14,000," she said.
High earners now include 3 per cent of the workforce - up from 1.4 per cent in 1999/2000. Then, high earners paid 20 per cent of the total income tax take.
Last night, the Revenue Commissioners said the tax take from the self-employed had increased by 300 per cent since 1991, while the take from PAYE workers has increased by 115 per cent.
"There is no doubt but that the self-employed's contribution has gone up. During that time, the number of self-employed people increased by 26 per cent, while the number of PAYE workers increased by 40 per cent," said a Revenue spokesperson.
