Minister, Banking Levy Must Extend Beyond 2021
NB Please see PQ below.
On foot of Parliamentary Question responses from the Minister for Finance, Aontú Leader & Meath West TD Peadar Tóibín has called on the Minister to commit to extending the Banking Levy beyond 2021 and to consider making the Levy permanent.
An Teachta Tóibín:
“The last payment under the Banking Levy is scheduled for the 20th of October, 2021. The Banking Levy was introduced to ensure banks and financial institutions could repay at least some of what was paid out to them. The cost of bailing out Irish banks following the financial crisis stands at almost €64 billion. Their greed, their corruption and their illegal actions were bailed out with the hard-earned money of the Irish people. This levy generates a meagre €150 million per year, from a sector that has been making billion in profits. To repay the debt at this rate, it would take over 400 years of the Banking Levy”.
"This is a sector that has avoided up to €12 billion in taxes on profits due to existing legislation and regulation. In response to my Parliamentary Questions on extending the Levy, the Minister responded ‘The Bank Levy is due to cease in 2021 and as yet, I have made not made my decision as to whether the levy will cease or continue beyond 2021 or the format, if any, it may take.’ I implore the Minister to firstly extend the Levy beyond 2021, and consider making the Levy a permanent charge until the banks start to pay their full taxes.”
“The Levy first introduced in 2014, was extended to 2016 and now to 2021. There is nothing to stop it being extended further or made a permanent fixture of our fiscal policies. In 2019, an increase on the Banking Levy was voted down by Fine Gael and Fianna Fáil. The existing levy is the bare minimum the banking sector could be doing to repair the damage they wrought. This is a sector that has avoided up to €12 billion in taxes on profits due to existing legislation and regulation. I am calling on the government to review the existing rate of the levy particularly in light of increased profits in the sector, the recovery of the banking sector, and the ongoing economic crisis the country is in. We, the Irish people, bailed the banks out in 2010 – the government should be ensuring that amidst a global pandemic and economic crisis, banks earning billions are pulling even a fraction of their weight.”
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For Written Answer on : 31/03/2021
Question Number: 324 Question Reference: 16578/21
Department: Finance
Asked by: Peadar Tóibín T.D.
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QUESTION
To ask the Minister for Finance when the banking levy is set to expire in 2021; and when will the last payment be made under the levy.
REPLY
The Financial Institutions Levy was introduced for the three-year period 2014 to 2016 in Finance Act 2013 with the purpose of enabling the banking sector to contribute to economic recovery. The annual yield of this levy is approximately €150 million.
In Finance Act 2016 my predecessor, Minister Michael Noonan, extended the bank levy to 2021. The due date for the last payment of the bank levy under the current legislation is no later than 20 October 2021.
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For Written Answer on : 31/03/2021
Question Number: 325 Question Reference: 16579/21
Department: Finance
Asked by: Peadar Tóibín T.D.
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QUESTION
To ask the Minister for Finance his plans to extend the banking levy beyond 2021 and to replace the levy with a permanent charge on banks to repay bailout funds.
REPLY
As the Deputy is aware, the 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. The annual yield of the Bank Levy is €150 million.
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 and as yet, I have made not made my decision as to whether the levy will cease or continue beyond 2021 or the format, if any, it may take.
