Pearse Doherty (Donegal, Sinn Fein)

I move amendment No. 26:

In page 86, between lines 35 and 36, to insert the following:

“Report on taxation of bailed-out banks

50. The Minister shall, within 3 months of the passing of this Act, prepare and lay before Dáil Éireann a report on the amount of tax revenue lost as a result of bailed-out banks facing no restriction on their ability to off-set corporation taxes using historic losses related to the crash and making specific reference to the number of years the bailed-out banks will be able to avoid tax into the future as a result of these deferred tax assets.”.

This amendment relates to the fact that the banks in the State pay little or no tax as a result of a measure introduced by Fine Gael a number of years ago. As the Minister may recall, during the financial crisis, the Minister for Finance at the time, Brian Lenihan, introduced, through the NAMA Act, a measure that would ensure that banks would only be allowed to carry forward 50% of their losses, recognising, as he did at that time, that despite the fact the banks were about to incur tens of billions of euro in losses they would some day be profitable. I think it was in the Seanad he said at the time that as soon as the banks were profitable they should pay tax to the Irish taxpayer. We know that was the case for a number of years. The Fine Gael and Labour Government changed the rules to allow them to carry forward 100% of their losses. The Minister may say that is what happens with all normal companies in the State. That is fine, but these are not normal companies. These are companies that only exist today because the taxpayer was forced to rescue them at that time and the Minister for Finance made it very clear in legislation that they should be treated differently and only allowed to carry forward 50% of their losses.

In terms of what we allow in respect of carrying losses forward, we are out of kilter with competitors across the OECD. In some cases, there is a limit whereby companies can carry losses forward for ten years or cannot carry forward 100% of the losses all of the time. We do both. We allow for an undefined period of time. Companies can carry forward losses for eternity if the losses are there. We also allow them to carry forward 100% of losses.

It is a wider point, but the reality is, as I mentioned, that banks in the State such as AIB and Bank of Ireland made €5 billion in profits between them last year and did not pay any tax to the State on that level of profit. That is absolutely appalling. Much of the profit being made is being made as a result of the interest rate environment and is off the back of the fact that they charge higher mortgage interest rates than our European competitors or the EU average. It is because people are being fleeced as a result of bank charges and so on.

To add insult to injury, banks are not paying tax on that level of profit, which is not acceptable. I ask the Minister to provide clarity on the situation with AIB. We know Bank of Ireland will be able to carry forward losses for another three years until the end of 2028. It is likely that it will not be 2029 or the following year until Bank of Ireland is paying taxes because its losses can be carried forward. That is two decades after the crash.

Permanent TSB is worse. It will be able to carry forward losses for another 12 years. It will be 2037 before Permanent TSB will have to start paying tax. I do not have the figure for AIB. Perhaps the Minister will enlighten us as to how long he will allow AIB to not pay taxes in the State.

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