Alice-Mary Higgins (Independent) | Oireachtas source

I move recommendation No. 9:

In page 56, between lines 2 and 3, to insert the following: "26.The Minister shall, within six months of the passing of this Act, prepare and lay before both Houses of the Oireachtas a report on policy options which could be taken to restrict banks from carrying forward losses against taxability of their current profits of those banks, and where banking profits arise from loans guaranteed by the Minister under the Credit Guarantee (Amendment) Act 2020 and the Credit Guarantee Act 2012, no more than 50 per cent of such profits should be eligible for exemption from taxation under the Deferred Tax Assets Scheme.".

These recommendations ask the Minister to lay, within the next six months, a report on restricting banks from carrying forward such profits as they might make. For a very positive moment I thought I was going to get an opportunity to speak about the Debenhams workers but I am very disappointed to see my recommendations in respect of them have been, wrongly, ruled out of order. It did not name them but it was with regard to workers as creditors. The recommendations I had noted as Nos. 9 and 10 in my notes related to that issue but in fact they are numbered differently to the official list.

I am not going to discuss this at length, as we have discussed many times the fact that we still have a situation in Ireland whereby many banks are not paying tax on their profits. They did not pay tax on their profits even in their most profitable times. We know that certain banks, including banks that have put questionable kites flying in the public realm about whether they will even continue to function in the State and on whom many individual households and small and medium enterprises are dependent, have been extraordinarily profitable. Recently, we heard that Ulster Bank paid dividends of approximately €3.5 billion to its parent company over recent years. These banks do not pay tax because they are able to write them off against previous losses.

Previously, we had a more balanced situation under the former Minister, Brian Lenihan, whereby only 50% of profits could be written off against previous losses. This was reasonable because it reflected the fact the 50% would be small if the profits were small but not if a bank was in the position of making large profits. The impact is almost disproportionate. If a company or bank is not healthy financially, the cost is quite small in terms of paying tax on whatever small amount at 50% but if the bank is extraordinarily profitable, it is reasonable that 50% of the profit could be considered for tax.

We know the huge efforts and sacrifices the public made, and I am sure some would argue these were made on their behalf and without their particular choice, in respect of bailing out the banks and bringing the banks through a difficult time. We now have a situation in which we have a lot of banks that are very profitable. We are continuing to try to protect those banks against risk with measures such as in the summer when we brought through the new Credit Guarantee (Amendment) Act, again ensuring that we were underwriting the banks so they do not have to take risks in the same way because we are taking a huge part of that risk. It is very reasonable, given how much of the risk in the past was absorbed by the public and how much risk continues to be absorbed by the public, that when the risk pays off and there are profits, the public would get something back from it. Both recommendations ask the Minister of State to consider the question of putting a stronger time limit or, what I would prefer, a percentage limit on the percentage of profit that can be written off and made immune to taxation by banks in Ireland.