Martin criticises hiring of advisers that avoids payment of income tax

IT IS unacceptable for the Government to hire advisers or consultants in a manner that avoids payment of income tax in Ireland, Taoiseach Enda Kenny has said.

Mr Kenny added that he would talk to Cabinet colleagues about the issue following accusations by Fianna Fáil leader Micheál Martin about the appointment of advisers to the Department of Health through consultancy companies.

Mr Martin said consultancies had been procured through arrangements in the UK to legally avoid paying tax in Ireland. “This has serious implications for social solidarity when we are asking everybody in the health service and across the public and private sectors to bear the burden of taxation and additional charges.”

Mr Martin added: “It adds to cynicism and scepticism if this means of procurement and utilisation of consultancies by the Minister for Health in particular and the Government in general is to be used.”

He asked Mr Kenny to consider the issue seriously as it had the capacity to undermine public confidence in administration and the manner in which the Government procures advisory services.

The Taoiseach said Minister for Health James Reilly had employed several specialists on specific contracts because of their expertise. Deputy Martin, he added, should raise the point with him about consultants being involved in tax evasion or making recommendations. And he added that the subject required a more detailed response.

When the Fianna Fáil leader said “it was tax avoidance”, Mr Kenny replied: “I imagine he would be happy to respond in detail.”

Mr Martin said it was unacceptable for the Government to hire consultancies through such an arrangement. Raising the issue a second time, he said, “with regard to my question on the utilisation of consultancies to avoid paying tax, which avoidance is illegal in this country, I suggest that the matter be a broad Government policy issue”.

Criticising the use of consultancy companies to legally evade taxation obligations in this country, he said “apparently, this is now the case in the Department of Health, where two of the senior advisers on the team of the Minister for Health are in essence, consultancies procured . . . in the United Kingdom to evade legally any obligation to pay taxes in this jurisdiction”.

Mr Kenny said: “I will take it up with the members of the Government”. He agreed it was unacceptable “to have consultants involved in work if it has the effect described . . . I will certainly raise the issue with the Minister for Finance. There may be technical reasons requiring a response and I will revert to the deputy.”

The Fianna Fáil leader raised the issue during a question on the cost of consultancies to Mr Kenny’s department. The Taoiseach said consultants were engaged only when necessary.

The cost of consultancy to the Taoiseach’s department to date in 2012 was €21,074.