The Revenue Commissioners last night confirmed it was actively pursuing taxpayers for €17 million lost to the Exchequer through abuses of the tax relief scheme for investment in film-making. Barry O'Halloran reports.
A Revenue spokesman told The Irish Times that the money was "being pursued using the appropriate means".
He would not say if any of the cash had been recovered, or if the tax authorities were planning to prosecute anybody in connection with the abuses.
This week, Ms Muriel Hinchy, principal officer of the Revenue's direct taxes branch, told an Oireachtas committee that audits of the tax relief for film investments scheme had uncovered 30 projects that had abused the relief. The cases involved €17 million in uncollected tax. The abuses occurred between 1994 and 2001.
The Revenue's spokesman said there was still a risk the existing tax relief regime, governed by section 481 of the Taxes Consolidation Act, would allow abuses to take place.
"Tackling abuse would require changes in the primary legislation and that would be a matter for the Minister for Finance to consider in the context of the Finance Acts," he said.
A number of audits carried out since 1994 uncovered the 30 cases. In last year's budget speech, Minister for Finance, Mr McCreevy, announced that he intended to abolish section 481 along with 11 other reliefs.
Department of Finance and Revenue officials have warned that the scheme is open to abuse.
However, film industry body, Screen Producers Ireland (SPI) is campaigning to save the tax break. It argues that only a minority of investors have abused the scheme.
Its chairman, Mr Andrew Lowe, last night said the group would be meeting the Revenue Commissioners early next week to discuss the issue.
He pointed out that the organisation had worked with the Revenue, and Departments of Finance and Arts, Sport and Tourism, on drafting new guidelines governing the certification of projects for eligibility for the relief. Mr McCreevy recently approved these guidelines. Mr Lowe stressed that the SPI does not condone abuse of section 481.
This week, he told the Oireachtas Joint Committee on Finance and the Public Service that the relief cost the Exchequer €25 million a year, but that the film-making activity it supports generates €32 million in taxes.
