Section 126AA of the Stamp Duties Consolidation Act 1999 imposes an annual levy on certain financial institutions on the basis of the amount of deposit interest retention tax (DIRT) payable by them in a specified ‘base’ year. The levy is intended to raise a fixed annual yield of €150M. In relation to the years 2017 and 2018, a rate of 59% was required to yield €150M based on the financial institutions’ DIRT liability for the base year 2015. The year 2017 will be used as the base year to determine the levy for the years 2019 and 2020. As there has been a substantial fall in DIRT payable by financial institutions since 2015 the rate will have to be increased from 59% to maintain the €150M yield.
I recently announced that I intend to bring forward a Financial Resolution on Budget night 2019 increasing the rate of the levy from 59% to 170%, which, when applied to the DIRT payable in 2017, will continue to yield €150M.
Without an increase in the current rate of 59% the levy would yield €52.2M in 2019. Increasing the current rate by 10% would bring the rate to 65% which would yield approximately €5.2M in additional revenue. An increase of 10 percentage points from 59% to 69% would yield approximately €8.8M in additional revenue.