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Dáil Éireann debate -
Wednesday, 10 Feb 1993

Vol. 425 No. 7

Written Answers. - Credit Union Accounts.

John Bruton

Question:

107 Mr. J. Bruton asked the Minister for Finance his proposals, if any, to adjust the interest payable on credit union accounts so as to enable the credit unions to compete on favourable terms with the commercial banks where savings account holders can now avail of the 10 per cent income tax on the interest from savings of up to £50,000.

The operations and role of the credit unions are essentially different from those of commercial deposit-taking institutions such as banks and building societies. The tax treatment of credit unions reflects the Government's acknowledgment of this difference. When the DIRT arrangements were introduced in 1986, the then Government agreed that DIRT would not apply to interest income from credit unions, and this remains the position.

Since the announcement of the new DIRT arrangements in April of last year, the Irish League of Credit Unions has not requested the facility to offer savings facilities with the same DIRT arrangements as will apply for other deposit-taking institutions. The League has indicated to me that it sets great store by the mutuality principle which underlies the credit unions, and which is distinct from the profit motivation of the banks. The League considers that the extension of the new arrangements for Special Savings Accounts to credit unions would put them in the same category as the banks, a category in which the credit unions are adamant that they do not belong.
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