Some of the country's highest earners have avoided paying €453 million in tax by investing in property-based relief schemes.
An extensive review of tax exemption and avoidance by consulting firm Indecon has found nine schemes that are being used and abused by the super-rich to cut their tax bills.
It noted that the special exemption incentive for artists living in Ireland took almost €24 million out of Government coffers in 2002.
Consultants Indecon noted the importance of the construction sector, where many of the tax relief initiatives are focused, and warned against a sudden end to the schemes.
Consultants for the first time offered a breakdown of investments and how much each scheme had cost the Exchequer:
- Hotels and holiday camps €125 million.
- Holiday homes €27 million.
- Private hospitals €23 million.
- Nursing homes €38 million.
- Third level education buildings €54 million.
- Section 23 student accommodation €159 million.
- Childcare facilities €6 million.
- Park and ride €4 million.
- Multi-storey car parks €17 million.
The tax review also revealed that many high earners were taking out pensions they would not use, or need, to avoid or delay paying money to the Exchequer. One individual set up a €100 million nest egg and was able to pay in €25 million tax-free.
In the Budget the Minister for Finance Brian Cowen stopped short of scrapping tax relief for artists but said it would be capped. In 2002, the top 26 claimants claimed the exemption on a total income of around €39 million, with an estimated tax forgone of €12.93 million.