Almost one-fifth of the Republic's top 400 earners paid tax at less than 15 per cent in 1999 and 2000, a new report reveals.

The study, compiled by the Revenue Commissioners, shows that property-based capital allowances such as car-parks were the most popular means used by high earners to reduce their tax bills.

The Revenue found that 18 per cent of the 400 top earners in 1999/2000 were paying tax at less than 15 per cent. Just more than one-tenth were paying between 15 and 30 per cent, while 71 per cent were taxed at between 30 and 46 per cent. About 12 per cent were paying less than 5 per cent.

Those whose tax returns were investigated for the survey earned more than £150,000 (€190,000).

At the time under review, the lower rate of tax for most PAYE workers was 26 per cent, with this rising to 44 per cent as soon as a single worker earned more than £17,000.

The study, the second of its kind to be conducted during the tenure of the Minister for Finance, Mr McCreevy, considers in particular those 117 top earners who paid less than 30 per cent in tax.

The analysis showed that "a substantial number" of these 117 were partners in "a relatively small number" of partnerships established to avail of specific incentives. Of the partnerships examined, the most damaging for the Exchequer were property-related.

Relief of more than €46 million was claimed through miscellaneous property-based capital allowances. About €12 million was claimed in relation to hotels, while multistorey car-parks accounted for relief claims of €9.7 million.

Smaller relief claims were made in respect of heritage homes, loan interest and film relief.

In total, the Republic's top 400 earners took advantage of tax allowances worth more than €74 million in the year under review. In 2000, the Revenue collected a total of €7.9 billion in income tax.

On Budget day last week, Mr McCreevy said he was using the research to close "a number of loopholes" in the tax system.

He went on to stem reliefs on areas such as car-parks, student accommodation and urban renewal, announcing that the schemes would terminate at the end of 2004.

"I have no doubt that one effect of terminating existing tax reliefs will be to sharpen the creative wits of tax-avoidance experts," Mr McCreevy told the Dáil during his Budget speech.

The Minister took similar action in 1998 when he capped the amount of capital allowances on buildings that could be offset against non-rental income.

The research concludes that the slight improvement in the effective tax rate paid by the top 400 earners in the period between 1993/1994 (the period reviewed by the first study) and 1999/2000 "may be attributable to the 1998 restrictions". It goes on to recommend that a repeat study be conducted in two or three years' time when pre-1998 entitlements will have expired.

The full report has been placed in the Dáil Library.