Government plans to tax the Pandemic Unemployment Payment mark the first example of retrospective taxation in the history of the State, according to Sinn Féin.

The Oireachtas Finance Committee yesterday voted in favour of a measure that will ensure all payments made since March 13th are subject to income tax.

Sinn Féin voted against the measure, which it said could see some people facing tax bills of nearly €1,500.

The Government has argued that people who were paying tax on their earnings through the pandemic should not be left at a disadvantage to people earning sometimes similar amounts through the pandemic payment.

On Newstalk Breakfast this morning, Sinn Féin finance spokesperson Pearse Doherty said it is the first time in his career he has seen a Government push for “retrospective taxation.”

“There are loads of times where things are intended that they should be taxed,” he said. “For example, when property is sold but certain people use big accountancy firms to find loopholes in the law and are able to avoid paying millions of Euro in tax.

“The point is, never when that happens do you decide then to go into a Finance Bill and rewind the clock back to March and say, ‘actually since March that is actually taxable.’

“What you do is you close down loopholes or you change the law from there on.

“Never have I, as somebody who has been dealing with finance bills for over ten years, seen a situation where there is retrospective taxation – where you go back in time and say payments that were paid out, which were tax exempt under the law, are actually taxable – and that is the reality here.”

Pandemic Unemployment Payment

Revenue confirmed back in April that it believed the pandemic payment was subject to tax; however, last night’s measure seeks to enshrine that in law.

Deputy Doherty said that until the Finance Bill passes all stages in the Oireachtas, all pandemic payments made between March 13th and August remain tax-exempt.

“That is the law,” he said. “That is what exists and what I am saying is, you can’t go back and you can’t decide to change a principle, which is right across the world, which is that you do not go back in time and tax a payment that was paid.

“We have never, ever done it. We have never done it when banks exploited a loophole in our tax code. We have never done it when Vulture funds have done it. We have never done it when big accountancy firms have done it.

“But the Government decided for the first time ever that they are going to rewind back the clock and tax a payment that was untaxable for who? For people who lost their jobs during a pandemic.”

Tax bill

He said payment recipients will now face a tax bill of up to €1,470.

“The question is why would you do this?” he asked. “Why would you actually breach a principle that is enshrined in tax law right throughout the world?

“Deciding to go and tackle those who lost their jobs during the pandemic? And it has never been done when big businesses actually exploited tax loopholes not for hundreds of Euro but actually tens of millions of Euro.”

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