Vol. 424 No. 10
17 Mr. R. Bruton asked the Minister for Finance if he has considered the competitive position of credit unions in attracting deposits, on the new special accounts attracting 10 per cent tax has been brought into force; and if he will make a statement on the matter.
The operations and role of the credit unions are essentially different from those of commercial deposit-taking institutions such as banks and building societies. Accordingly, the tax treatment of credit unions reflects the Government's acknowledgement of this difference. When the DIRT arrangements were first introduced in 1986, the then Government agreed that DIRT would not apply to interest income from credit unions, and this has continued to be the position.
Since the announcement of the new DIRT arrangements in April last, the Irish League of Credit Unions has not requested the facility to offer savings facilities with the same DIRT arrangements that will apply for other deposit-taking institutions. The Irish League of Credit Unions itself has indicated to me that it sets great store by the mutuality principle which underlies the credit unions, which is totally distinct from the profit motivation of the banks. It considers that the extension of the new arrangements for special savings accounts to credit unions would put them in the same category as the banks, which the credit unions are adamant they are not.
