Jim Mitchell
Question:89 Mr. J. Mitchell asked the Minister for Finance the yield that would be achieved in a full year if a 1% levy were imposed on all financial institutions on turnover or on profits. [25377/00]
Written Answers. - Tax Yield.
I am informed by the Revenue Commissioners that sufficient data is not available to estimate the possible yield of such a 1% levy on the turnover of financial institutions.
It is tentatively estimated by the Revenue Commissioners that a 1% levy on the taxable profits, before capital allowances of all financial institutions could yield of the order of £50 million if the levy were applied to all deposit-taking institutions, insurance companies and all IFSC institutions. This estimate of yield excludes the effect of any levy imposed on the funds of life assurance companies or collective investment undertakings as these are in effect the funds of policy holders and unit holders and not of the institutions. If the 1% levy were applied only to deposit-taking institutions, the yield would be of the order of £10 million.
It should be pointed out, however, that in the case of the IFSC financial institutions the imposition of such a levy would be in conflict with the assurances about tax on profits given by successive Irish Governments to these institutions when they were setting up here. Also, in the case of domestic financial institutions, such a levy on their profits could be in conflict with the single general rate of corporation tax on trading profits which accords with EU State aid rules and which it was agreed should be put in place by this and the preceding Government.