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Dáil Éireann Debate, Tuesday - 27 July 2021

Tuesday, 27 July 2021

Questions (359)

Gerald Nash

Question:

359. Deputy Ged Nash asked the Minister for Finance the estimated yield from increasing the bank levy rate to 100% or to 157% and 200% respectively in tabular form; and if he will make a statement on the matter. [39917/21]

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Written answers

Section 126AA of the Stamp Duties Consolidation Act 1999 imposes an annual levy on banks for each of the years 2017 to 2021. Since the levy was introduced in 2003, it has been extended on several occasions and currently applies until the end of 2021. The levy is calculated by reference to the amount of Deposit Interest Retention Tax (DIRT) paid by the bank in a specified year referred to as the “base year”. The levy is designed to produce a fixed annual yield of €150m, which means that whenever the base year (and the amount of DIRT paid) changes, the rate of charge must also be adjusted to maintain this constant yield.

For the years 2019 and 2020, the levy was charged at a rate of 170% of DIRT payable by the bank in 2017 (2017 being the base year for 2019 and 2020). For the year 2021, the levy is chargeable at a rate of 308% of DIRT payable by the bank in 2019 (2019 being the base year for 2021).

There is currently no statutory basis in place for charging a bank levy for 2022. However, were the levy to be extended to 2022, amending the rate to 100% or to 157% and 200%, respectively, would lead to a reduction in overall yield from the levy. This is illustrated in tabular form below, using both 2019 and 2020 as possible base years. Were the levy to be extended to 2022 and the year 2020 used as the base year, it is estimated that the rate would have to be increased to 639% to maintain the annual yield of €150m. However, if 2019 continued to be used as the base year, then no rate change would be required.

Year Bank Levy Due

Base year

Total DIRT in base year

DIRT subject to levy (approx.)*

*Levy as % of DIRT

Estimated yield (m)

2021

2019

€64m

€49m

308% of DIRT

€150.92

2022

2019

€64m

€49m

100% of DIRT

€49

2022

2019

€64m

€49m

157% of DIRT

€76.93

2022

2019

€64m

€49m

200% of DIRT

€98

2022

2019

€64m

€49m

308% of DIRT

€150.92

2022

2020

€37m

€23.5m

100% of DIRT

€23.5

2022

2020

€37m

€23.5m

157% of DIRT

€36.9

2022

2020

€37m

€23.5m

200% of DIRT

€47

2022

2020

€37m

€23.5m

639% of DIRT

€150.16

* Certain DIRT payments, such as those by Credit Unions, are not included when calculating the levy

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