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Government’s tax break for high earners not working: Doherty

10 May, 2013 - by Pearse Doherty TD


Sinn Féin Finance Spokesperson Pearse Doherty TD has said that the government’s Special Assignee Relief Programme (SARP) is “not working” and the money would be better spent on struggling, indigenous SMEs.

Deputy Doherty was reacting after the government confirmed, in response to a Parliamentary Question this week, that only six people have availed of the scheme.

Deputy Doherty said:

“The SARP programme was a key part of the 2012 budget and was supposed to be a job creation measure.

“It is now clear that only six people have availed of the scheme and outside of these six only 20 additional jobs have been credited to the programme.

“The figure of 20 extra jobs is provided by the companies and is completely unverifiable. It is impossible to say whether the scheme played any part in their creation.

“Only large companies can avail of this scheme and it only applies to high earners who are not from the state. The scheme has been in operation for a year and a half and this is the first time we have seen any indication of its take-up.

“On average beneficiaries are given an additional €20,000 income tax free. They earn on average over €130,000.

“That €20,000 would be of far more benefit going to struggling, indigenous Irish SMEs. I am calling on the government now to scrap this tax break for high earners and instead support Irish SMEs who provide local jobs in the real economy.”

DÁIL QUESTION

NO 65

To ask the Minister for Finance when SARP became operational; if any returns were made retrospectively for SARP in respect of 2011; if so, the number of people and the amounts involved; the instructions that have been given to persons availing of SARP in terms of conditions applicable; the number of jobs filled by Irish residents that have been created as a result of SARP; and if he will estimate the amount that will be saved for the Exchequer if SARP was abolished in 2014..

- Pearse Doherty.
* For WRITTEN answer on Thursday, 9th May, 2013.
Ref No: 21997/13

REPLY

Minister for Finance ( Mr Noonan) : Section 14 of Finance Act 2012 introduced the Special Assignee Relief Programme which is designed to reduce the cost to employers of assigning key individuals in their companies from abroad to take up positions in the Irish based operations of their employer. By way of eBrief No. 29/12 (dated 29/6/2012) Revenue advised that they had updated their Tax and Duty manuals to reflect matters relating to the new SARP. Details of the relief are also included in Revenue’s Guide “Supporting Job Creation and other Enterprise Supports”. Details of these and other documentation in relation to SARP, including the claim form, are available on Revenue’s website at www.revenue.ie.

Paragraph 10 of Section 14 provides that relevant employers must submit an annual return to the Revenue Commissioners detailing, inter alia, the number of employees and the amounts of exempt income claimed under the programme. As 2012 was the first year of the programme, this return was not sought until after the end of the tax year 2012 in order to ensure that an accurate picture as possible of take up levels over a full tax year could be provided.

Employer returns received to date for 2012 indicate that there were 6 individuals who qualified for the relief with 2 of them receiving an aggregate total tax-free remuneration of €39,767. Job increases were reported as numbering 26 with 2 jobs also reported as retained because of the relief. It is expected that the 4 individuals who are not reported in the employer returns as receiving tax-free remuneration are expected to claim it when they submit Form 11 tax returns for 2012 in late 2013. Until the details from these returns are available it would be premature to attempt an estimate of the amount of tax that would be saved for the Exchequer if SARP was abolished in 2014.

It is possible that not all employers have submitted a SARP return yet. Also, the figures provided do not include the details for claims that are not included in employer returns received to date but will be made in the Form 11 tax returns for 2012 to be filed under the self-assessment system in October/November of 2013.

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