Pearse Doherty TD has questioned why, despite the Department of Finance being aware of issues for some time, that the Tax Strategy Papers contain no recommendation or analysis of the use of tax avoidance schemes as highlighted by him and others for months.
The Donegal TD called for the government to get real on the issue and to commit to a comprehensive plan to tackle not only the Section 110 issue but also the abuse of ICAVs (Collective Asset-management Vehicles) and Qualifying Investment Funds too.
The Minister for Finance had committed to such action in April in a parliamentary reply to Deputy Doherty.
Deputy Doherty said it is time for a clear commitment from government that they intend to tackle tax avoidance schemes in Budget 2017.
“This issue goes far beyond the well-known Section 110 loopholes but must also look at the wider picture including the use of ICAVs and Qualifying Investment Funds to avoid tax, including on property transactions. Over three months ago in April, the Minister confirmed to me that he was looking at these issues and that if a problem was identified ‘appropriate action will be taken and any necessary legislative changes that may be required will be put forward for my consideration’.
“The fact that there is not even a passing reference in the Tax Strategy Papers means there is no government priority attached to these schemes. That must change with a commitment from Minister Noonan that Budget 2017 will include a comprehensive plan to end these schemes.
“I welcome the recent media attention on one issue- the Section 110 status, but as far back as April, I was seeking a review with a focus on vulture funds’ arrangements. Following a Freedom of Information paper, I called upon the Charities Regulator to investigate the role of companies designated as charities within this infrastructure. He confirmed to me that he would work with Revenue to look into the issue of abuse of charity status by some schemes. A wider exercise looking at the whole avoidance infrastructure is now needed.
“It comes as no shock to me that Revenue and the Department of Finance are fire-fighting on this issue. It is clear they have been aware of major tax avoidance schemes since at least March of this year. There can be no surprise from government about this issue either; they, and Fianna Fail before them, have created a culture and laws which not only facilitate but encourage the avoidance of tax by those with the ability to access the legal expertise to do so.
“Even now, despite the current focus, Irish companies are openly offering their services to companies that want to avail of these schemes. The tax avoidance industry carries on and has no fear of this government stopping it in its tracks. A cursory look at the website of Davy’s stockbrokers brings you to a scheme to use Qualifying Investment Funds to buy Irish Real Estate to ‘mitigate tax liabilities’ to this State.
“Budget 2017 must be the one where we finally get to grips with this issue. No amount of spin or lobbying should allow us to minimise the damage this industry is causing. It’s an industry that does not fear a Fine Gael or Fianna Fail government because these parties set up and still support these schemes.”
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