Dáil Éireann debate -
Tuesday, 10 Jun 2003

Vol. 568 No. 1

Written Answers. - Stamp Duty.

Phil Hogan

Question:

282 Mr. Hogan asked the Minister for Finance his views on whether the recent changes in stamp duty levies on plastic cards are a disincentive to progressing Ireland's adoption of electronic payments systems; if he has proposals to pay all the State payments by electronic payment only; and if he will make a statement on the matter. [15679/03]

Minister for Finance (Mr. McCreevy)

In my budget speech last December I announced a number of increases in the stamp-duty charges on various financial products such as ATM cards, Laser cards, credit cards, cash cards and cheques. The stamp duty on ATM cards was increased from €6.25 to €10 per annum, and a duty of €10 per annum was introduced for Laser cards. The stamp duty on a combined ATM/Laser card was increased to €20, and the stamp duty on credit card accounts was increased from €19 to €40 per annum. There have been no increases in those charges for many years. ATM cards were last increased in 1996, and credit card accounts and charge cards have not seen an increase in their levy since 1992.

I believe those products are well established, and are very valued by their users for their various advantages. When stamp duty was first introduced on those cards, it was claimed that it would stop people using them. However, there was a big increase in the numbers of such cards over the years and, since 1991, the combined number of ATM, credit, charge and Laser cards has trebled.

I do not see such increases in stamp duty as preventing Ireland's adoption of electronic payment systems. Neither do I believe that something should not be subject to increases in tax over time simply because it is new technology. It is not anti-technology to tax products with a technological aspect, anymore than it is anti-work to tax wages or anti-industry to tax profits. I am satisfied that those increases will not have a significant effect on use of those products, but that they will raise substantial revenue. It makes sense that, at a time when we need to increase tax yield, we increase such charges to broaden the tax base.

Stamp duty is a significant contributor to the Exchequer and helps fund public services while keeping the direct tax burden low, thereby facilitating continued economic success. The changes are estimated to yield a total of about €52 million in a full year.

I do not have proposals to pay all State payments by electronic means only: the State sector consists of a wide variety of public bodies, which issue payments for many different purposes to large numbers of people and organisations. However, I support greater use of electronic payment methods by the State sector: there is already significant use of such methods, and developments are in train to increase it.