Dáil Éireann Debate, Tuesday - 25 March 2014
221. Deputy Pearse Doherty asked the Minister for Finance the estimated tax loss to the State in the years 2014, 2015 and 2016 as a result of section 396C of the Finance Act 2013, which has been provided to his Department in tables by Bank of Ireland and AIB, the only two banks to benefit from the clause. [13125/14]
View answerIn terms of the impact for fiscal year 2014 we have not assumed any direct fiscal cost of this measure. The banks have yet to report a return to pre-tax profitability and while the latest market forecasts suggest one of the banks will indeed make a profit this year, these are projections. One also needs to remember that the banks earn profits from many sources, and it is the Irish profits that matter in this context.
The net effect of the measure in terms of tax receipts is largely one of timing and ultimately it should not impact on the State's total corporation tax take over the long-term. This will be offset by an improvement in the valuation of the State's equity stakes in the banks as well as its debt investments.
