Joan Burton (Dublin West, Labour)

I advise the Minister to read his legislation. In the case of a restriction on losses, they can be carried forward indefinitely but there is a cap on the amount which can be utilised in any one year. That is the form of restriction which the Minister has introduced. It is not the loss, ultimately, of any losses for tax purposes which will arise. It is a restriction on the amount of the loss and this is also so in regard to the requirement that people with very high incomes would pay a minimal rate of tax. This follows the revelations I brought to the floor of the Dáil in regard to millionaires who were paying no tax because Fianna Fáil had set up an incredible structure of property-based tax breaks that they could particularly enjoy.

When the Minister talks about taxation, I wish he would take the opportunity to read his own legislation and understand what exactly Fianna Fáil has done in terms of that legislation. As the Minister's officials will confirm for him, losses at present for companies can, broadly, be carried back for one year against tax paid one year ago. Last year, according to information from the Department of Finance, hundreds of millions of euros were paid in refunds in respect of developers, banks and financial institutions. While we do not yet have a full figure for all of the refunds paid last year, the belief is that between last year and the hangover into this year, the totality of refunds in regard to banks and developers is likely to be well over €1 billion when they are all processed. In addition, if there are losses which have not been used, they can then be carried forward indefinitely while the institution continues. It may be that the only reason some institutions are sold on is to take advantage of their tax losses.

The legislation the Minister introduced was to ensure banks are required to pay a minimum contribution of corporation tax, even where they have very large tax losses brought forward. Despite this, unused losses continue to be allowed to be brought forward indefinitely. It would be interesting if the Minister or his officials have a calculation of the total amount of tax losses which will be carried forward in the tax system in respect of banking, financial institutions, developers and builders for the indefinite future. My view is that the overhang in regard to these amounts is extremely significant.

This is disappointing at a time when taxpayers have been asked by the Minister to make sacrifices. Last year, the total adjustment in the Minister's December budget cuts was €4 billion, which is exactly the same figure he put into Anglo Irish Bank from current resources. The Minister does not like the €4 billion bailout of Anglo Irish Bank last year to be compared with the €4 billion sacrifice that people throughout Ireland, but particularly in the public service, contributed through significant cuts in their wages and restrictions in regard to their entitlements. The fact is that those two sums of €4 billion are related. Some €4 billion went into Anglo Irish Bank and I understand the Minister is planning to come back to the House shortly to ask for untold further billions to put into that bank.

Even after those billions go into that bank and the other banks, there will be no requirement for the banks to pay tax for a very long time, except at 50% of the 12.5% corporation rate, or 6.25%, which will be roughly the rate of tax they will pay because of their accumulated losses. While we do not know this for certain because we do not yet have the work-outs for any of the banks, when they return to profitability, their likely rate of tax, where they are likely to pay any tax at all, will be at a maximum of 6.25%.

I am surprised the Minister made outlandish claims in regard to the taxation burden the banks are bearing. He is entirely wrong. I invite the Minister to read his own legislation so he can check the actual situation.

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