Weak Tax Revenues Pose Questions For Irish Government

by Jason Gorringe, Tax-News.com, London

04 September 2003

The latest figures published this week by the Irish Exchequer have revealed a tax revenue shortfall of 892 million euros for the first eight months of this year, a statistic that is certain to lead to a certain amount of belt-tightening amongst government departments finalising their spending plans for next year.

The country's tax revenues have undergone a dramatic slump in recent months, which looks even more drastic when measured against tax collections for the corresponding period last year which showed a surplus of revenue over spending of 951 million euros. However, the Finance Department is sticking to its projection of a 500 million euro tax shortfall for the year, predicting a late boost in the tax take when the self-employed pay their income tax returns in November.

Meanwhile, following an inquiry by the Revenue Commission it has been discovered that a number of wealthy taxpayers used the so-called Seaside Resort Scheme in the 1990s as a means to shelter income from tax, according to a recent report in the Irish Times.

The Revenue found instances of partnerships manipulating the scheme by renting properties in various seaside resorts in Ireland which were then subsequently sub-let on short term tenancies.

The Times said that the information came to light on the publication of a letter addressed to the Ministry of Finance in 1999 which was released under the Freedom of Information act of the same year.

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