asked the Minister for Finance if he plans to increase the tax take from the banks, in view of the huge profits being made by the main banks and the relatively small contribution they make to the Exchequer; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Tax Take from Banks.
15.
Changes in taxation, in relation to the banks or any other group, are a budgetary matter and I do not propose to comment at this stage.
As regards the tax contribution made by the banks, I should point out that under the principle of confidentiality in relation to taxation affairs it is not the practice to give information concerning payments by individual taxpayers or by small groups of taxpayers. I would, however, draw the attention of the Deputy to the latest published accounts of the two principal banking groups. According to their published accounts, the total pre-tax profits of these two groups for the year ended 31 March 1989 were £315.2 million. The accounts make provision for £36.6 million in total Irish corporation tax, and £44.2 million in overseas taxation. These corporation tax provisions are not precise final payment figures, since adjustments are normally made in the course of finalising the actual tax liability with the various Revenue authorities. However, they can be taken as giving a broad indication of the magnitudes involved. In addition, the two groups concerned have also made provision in these accounts for payments under the bank levy of £30.3 million.
Financial institutions, of which the banking sector is a major part, have contributed in recent years an estimated 20 per cent of the total yield from corporation tax.
The Deputy will be aware that the bank levy was specifically introduced in 1981 as a direct response to the low level of corporation tax paid by the banks. The total levy now stands at a level of £36 million and is paid by all the licensed banks.
I expect that the measures which I introduced this year in the Finance Act to curtail the growth of section 84 lending will result in increased corporation tax payments by the banks.
Finally, as stated in the Programme for Government, it is intended to continue to widen the tax base, and this will include the obtaining of an increased tax yield from the corporate sector as a whole.
Allied Irish Banks indicated on returns made up until the end of September that they were setting aside 32 per cent of declared profits while Bank of Ireland were setting aside 26 per cent of declared profits. Can the Minister explain the discrepancy between the rates being paid by both groups? Can he also indicate, as perhaps he has the information available, the amount of tax outstanding by both groups? The Minister indicated in his reply that the figures in mation available, the amount of tax outstanding by both groups? The Minister indicated in his reply that the figures in the accounts do not always represent the tax actually paid, so can he indicate what tax had been paid, what tax is still out standing, and the years for which the tax is outstanding?
A Cheann Comhairle, I have to tell the Deputy that it is not the practice to give out information concerning tax payments by individuals or individual firms. The Deputy has asked me to explain the reason for the differences but that is a matter for the Revenue Commissioners.
That is hardly a satisfactory reply. The Minister has taken responsibility for the question I had put down which asked that he ensure that there would be a better tax take from the banks. The Minister has to some extent dodged the question although he has indicated that a greater tax take will be taken from the corporate sector. The banks are generally under the control of the Central Bank, which is responsible to the Government. Surely the Minister has a responsibility to tell us the way in which the banking institutes are meeting their obligations to the citizens of the State? After all 50 per cent of the banks' profits are made in the State so the Minister has a responsibility to tell us whether they are meeting their responsibilities to the citizens of this State?
I did no more in my reply than refer the Deputy to the published accounts of the banks. I repeat that it is not the practice to give information on any personal or corporate taxpayers' situation. The question the Deputy tabled has no relevance to the detail that is in the possession only of the Revenue Commissioners.