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Banking Sector

Dáil Éireann Debate, Tuesday - 5 October 2021

Tuesday, 5 October 2021

Questions (166, 167, 168)

Pearse Doherty

Question:

166. Deputy Pearse Doherty asked the Minister for Finance if he will extend the banking levy to 2022; if so, the rate at which he will extend it and its revenue target; and if he will make a statement on the matter. [47657/21]

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Pearse Doherty

Question:

167. Deputy Pearse Doherty asked the Minister for Finance the way any extension of the banking levy would interact with retail banks withdrawing from the Irish market; and if he will make a statement on the matter. [47658/21]

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Pearse Doherty

Question:

168. Deputy Pearse Doherty asked the Minister for Finance the credit and other institutions that are currently subject to the banking levy. [47659/21]

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Written answers

I propose to take Questions Nos. 166 to 168, inclusive, together.

The Financial Institutions ("Bank") Levy was introduced for the three-year period 2014 to 2016 with the purpose of enabling the banking sector to contribute to economic recovery. In the Finance Act 2016 the Levy was extended until 2021. That extension had been subject to a review being undertaken of the methodology used to calculate the levy, which included a public consultation with stakeholders in June 2016. That stakeholder exercise was inconclusive in terms of getting external agreement on a possible replacement to the DIRT-based methodology.

Ultimately the DIRT-based formula was retained but the then Minister for Finance took into account the suggestion that arose from the Public Consultation that the base year for calculating Levy liability should not be static, and announced in Budget 2017 the introduction of a rolling two-year series of base years.

In order to protect the annual €150 million yield based on the financial institutions' DIRT liability, the rate payable has increased from 35% in 2014 to 308% for 2021.

The Bank Levy is due to cease in 2021. I am currently considering whether to extend the levy beyond 2021, and if so the format it will take. In making my decision on this matter, the Deputy should note that I will be giving consideration to the significant changes taking place in the Irish banking sector, including the planned withdrawal of two retail banks from the market.

Finally you should note that the Levy applies to certain financial institutions operating in the State that are liable to pay DIRT. The names of those financial institutions, however, and the amounts paid by each one, is confidential taxpayer information in accordance with section 851A of the Taxes Consolidation Act 1997.

Question No. 167 answered with Question No. 166.
Question No. 168 answered with Question No. 166.
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