Rose Conway Walsh (Sinn Fein) | Oireachtas source

I move recommendation No. 6:

In page 112, after line 42, to insert the following:“Report on restricting banks from carrying forward losses

29. The Minister shall, within 6 months of the passing of this Act, prepare and lay before both Houses of the Oireachtas a report on restricting banks from carrying forward losses against taxable profits in a manner which could result in many institutions paying no corporation tax for the foreseeable future by introducing a 25 per cent cap on profit that can be written off by carried forward losses in any given year and an absolute ten year limit on the use of losses for this purpose.”.

The Minister understands the limitations placed on Opposition Deputies and Senators when framing amendments. A report has been carried out and it makes for very interesting reading. The report includes many of the arguments the Minister was making prior to its publication. It states the value of the banks will drop. While I accept that it might, the report also states that the estimate is €420 million in reduced value across the three banks. That number has fallen somewhat presumably as bank shares have dropped. While I do not accept that we should necessarily be trying to sell the banks, I leave that aside for a moment to consider that the figure set out is equivalent to less than two and a half years of tax foregone at current levels of profitability. It would make far more sense to collect the recurring tax returns than to hope for a future windfall which would only be used to reduce the debt rather than invest in the economy and infrastructure. The report also singles out PTSB as suffering most under any change. While that is interesting, it lets the cat out of the bag. The Minister's defence of the tax break is not that it is fair but that the banks need it. The huge tax break is part of the ongoing bailout we have spoken about before. While the report refers to reduced competition, this is a double-edged sword. Making these banks pay tax would level the playing field and allow new entrants to join the market, which is something that has failed to happen to any serious extent to date. Under my proposal, the State would have collected €175 million in tax this year from banks which have made over €2.6 billion in the last year. I am sure we will have passionate debates about measures to bring in far less. This should be done. Banks need to pay tax and this is a way to ensure they do.