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Pension Levy

Dáil Éireann Debate, Tuesday - 19 October 2021

Tuesday, 19 October 2021

Questions (360)

Richard Bruton

Question:

360. Deputy Richard Bruton asked the Minister for Finance the total revenue collected by the pension levy on pensions funds; the way in which the money was used; if private pension funds have recovered in value since the levy was collected; and if there are plans to restore any of the moneys collected. [50430/21]

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Written answers (Question to Finance)

I assume the Deputy is referring to the Stamp Duty levy on pension schemes. I am advised by Revenue that amounts of levy collected, for the years 2011 to 2015, are published on the Revenue website at www.revenue.ie/en/corporate/information-about-revenue/statistics/receipts/receipts-stamp-duty.aspx.

For the convenience of the Deputy, the amounts of the levy collected are as follows:

-

Stamp Duty Receipts

 

2011

2012

2013

2014

2015

Pension Levy

€463.23m

€482.88m

€535.31m

€742.88m

€169.31m

The pension fund levy was introduced in 2011 in the wake of the financial crash and at a time when the economy was in serious difficulties. Something had to be done to preserve and boost jobs and it is an unavoidable fact that difficult economic situations require hard and very often unpopular decisions. All sectors of the economy had to contribute to the recovery plan and the levy was designed to claw back a small amount of the very generous tax reliefs that those contributing to pension arrangements had benefitted from over many years.

For the years 2011, 2012 and 2013, the rate was 0.60% of the pension scheme assets. For the year 2014, the rate was 0.75% of the assets and for the year 2015, the final year of the levy, the rate was 0.15%.

The levy went to fund the tax reductions and expenditure measures introduced in the Jobs Initiative, including lowering the VAT rate for the tourism sector to 9%. The levy was successful and did its job as reflected in the increased activity and employment in that sector.

The performance of private pension funds is primarily a commercial matter and contingent on market circumstances and external factors. The pension fund levy was introduced to support the recovery of the wider economy and was time bound in duration. 

I have no plans to repay the levies paid on private pension funds. I do not consider it financially viable or appropriate that the savings achieved over the period of the financial emergency would be annulled, in whole or in part, by making retrospective payments.

The value of the funds raised by way of the levies have been used to protect and create jobs and this has helped to support the improving financial and economic position of the State. Taxpayers who may have ultimately borne the impact of the levy will have since benefited from tax reductions in the last number of Budgets, including the substantial income tax package announced as part of last week Budget. 

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