Tuesday, 15 September 2020

Questions (268)

Gerald Nash


268. Deputy Ged Nash asked the Minister for Finance the cost to Exchequer of removing stamp duty on credit cards; his views on removing stamp duty in view of safety concerns regarding the use of cash as a result of Covid-19; and if he will make a statement on the matter. [23732/20]

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Written answers (Question to Finance)

I am advised by Revenue that based on 2020 tax forecasts, the estimated cost of removing Stamp Duty on credit cards would be in the region of €38 million. This does not include the cost of removing Stamp Duty on other payment cards, which would increase this cost by a further €17 million.

The €30 stamp duty on credit cards is generally collected by the card issuing financial institutions on 1 April each year for the preceding year, i.e. one year in arrears. The tax year for this stamp duty normally begins on 2 April each year.

As part of a package of measures I introduced in response to the early phase of the Covid 19 pandemic, I determined that for 2020, the stamp duty on credit cards, which is normally charged to accounts on 1 April each year, would not be collected until 1 July. It is however anticipated that the collection dates will revert to normal in 2021. The stamp duty collected on 1 July 2020 was in respect of the period 2 April 2019 to 1 April 2020. I did this to help mitigate the sudden and significant reduction in income that was being experienced by many at the time.

I am not aware of any evidence that the €30 annual stamp duty acts as a significant disincentive to the use or issuance of credit cards, particularly as it is not usage based, but is rather a flat charge that is levied each year, irrespective of whether a credit card is used or not in the 12 month period. I have no plans at this time to remove or amend that stamp duty.