Page last updated at 06:37 GMT, Wednesday, 9 July 2008 07:37 UK

From the Caymans to Tory Island

Tory Island
Only 152 people live on Tory Island off the Donegal coast

Forget the Bahamas, Monaco, or the Cayman Islands... the windswept islands off the Donegal coast could soon become the world's newest tax haven.

Údarás na Gaeltachta - the body which oversees economic development in Irish-speaking areas - has proposed tax-free status for Tory and Arranmore as a way of protecting the islands' declining population.

The idea is now being considered by the Republic's Commission on Taxation.

Clare Island off County Mayo and the Aran Islands off County Galway would also be included in the scheme.

Residents would be allowed to earn up to 100,000 euros before paying income tax.

The self-styled "king" of Tory Island, Patsy Dan Rodgers, said it would be a boost for island communities.

"There are only 152 people on the island, and it would be lovely if a number of people came to live here, but they would have to fit in with the culture of the island, and with the Gaelic language above all."

So many young people are pushed into emigrating because there's very little employment on the island
Patsy Dan Rodgers, the 'King' of Tory Island

He said that economic conditions on the island were difficult.

"So many young people are pushed into emigrating because there's very little employment on the island, and no authority seems to take responsibility to give them jobs or employment.

"It's like a cruising ship in many ways. If not all facilities on the boat are working well for the Atlantic then no passengers are going to travel on it, or no new passengers anyway.

"If everything isn't up to date and working well then they're not going to come," he said.

Mr Rodgers said the 100,000 euros upper limit won't worry the islanders too much.

"Under 100,000? My goodness, that gets us shaking right enough," he said.

'Future viability'

The chief executive of Údarás na Gaeltachta, Pádraig Ó hAoláin, said it was important to think creatively in order to secure the islands' futures.

"The most challenging task for us is to create new employment and income-enhancement opportunities for island residents and especially for young islanders and islanders wishing to return to reside on the islands.

"We feel this is what holds the key to the future viability of the island communities," he said.

"The fishing industry, which was traditionally a major employer and source of income, has been in decline for quite a number of years.

"While tourism is a major source of employment and income for many people on the larger islands, a radical approach is required if the island communities are to be sustained into the future and provided with a platform for organic growth."

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