Irish opposition hits out over tax-free status of stallion fees.

Byline: Michael Clower

THE thriving Irish bloodstock industry could face a massive setback after Taoiseach Bertie Ahern revealed the tax exemption enjoyed by stallion owners is to be reviewed.

And fears were immediately voiced of a mass exodus of top sires from Ireland - with serious emplyment consequences - if stallion fees were taxed.

The Irish government is to review the exemption as part of a number of tax changes being considered in the build-up to next month's budget.

The exemptions have played a major part in attracting the world's best bloodstock to Ireland, and have helped operations such as Coolmore rival the world's best.

Former Taoiseach Charles Haughey made income from stallions

exempt from tax in the late 1960s, when he was Minister for Finance, and the tax break has remained in place ever since.

However, it is being increasingly criticised by opposition politicians at a time when Ireland has gone from several years of substantial budget surplus to a huge deficit, with consequent government cutbacks and increased borrowing.

The new Labour leader Pat Rabbitte is the biggest critic of the scheme and he attacked it again in a Dail debate on Tuesday.

Rabbitte referred to the country's stallion owners as "the mega-rich" and asked: "Why should an incentive considered necessary for a fledgling industry back in the 1960s be continued when such huge profits are being made?

"I must put it to the Taoiseach that he doesn't know what tax savings are being made because he doesn't want to know.

"The facts of the matter are that the figure is hundreds of millions at a time when you are imposing charges for various services, when registration fees for students are

going up by 69 per cent and when meals-on-wheels can't be run."

Ahern revealed that the tax exemption is to be reviewed when replying to Rabbitte's arguments.

He said: "I genuinely don't know the amount of tax that is forgone but I do know this - that there is a review of all these shelters and tax allowances in the Department of Finance and in the order of things they will clearly look at this one."

Stallion owners and others in the Irish bloodstock industry believe that there would be a mass exodus of top sires if stallion fees were taxed, and that this would have a serious effect on employment.

Horse Racing Ireland chief executive Brian Kavanagh put the case for the industry in an interview on RTE radio yesterday.

He said: "I think everybody agrees that the tax exemption on stallion fees has been an outstanding success. Ireland is a world leader in racing and bloodstock and there are 25,000 people currently working in the industry.

"As a result of the exemption a large number of foreign investors have bought land in Ireland and based their bloodstock here. They then have access to the best stallions in the world and that gives rise to employment."

He was specifically quizzed about the tax-free income of Rock Of Gibraltar in his first season at Coolmore next year.

Kavanagh said: "There was a very clear decision to be made with Rock Of Gibraltar - would he stand in Ireland or in America? It was decided that he should stand in Ireland and that brings consequent benefits.

"If these horses stand outside Ireland, the mares move to that location and so do the stud farms."

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Brian Kavanagh Current system creates jobs