Alice-Mary Higgins (Independent) | Oireachtas source

This is an issue I have raised in the past. I am merely raising it again. It is the issue of deferred tax assets.

The Minister will be aware that Irish banks, for example, in 2017, one of the years for which I have figures, shaved €400 million from their tax bills by offsetting their losses from the financial crisis period against taxable profits. The shocking aspect of this is that these losses can be carried forward indefinitely in order to shield banks' current profits from tax. Effectively, we are looking at lengthy periods in which banks, which have been very profitable at certain points during those periods, are still not paying tax.

I made suggestions on this matter in the past. I was not specific in that regard, but there are a number of ways in which it could be addressed. There was a proposal in the past to the effect that only 50% of the profits that are made would be capable of being written off against past losses. There is also the idea of a time constriction. The Minister could cap this in terms of time, as in there is a certain period during which one can continue to offset one's profits against one's past losses. I am specifically looking at banking because there is a particular context in terms of banking in light of the significant public contribution made in that area. There is also the potential of capping it in terms of the percentage of profits that this scheme would apply to. These are two practical ways to proceed. The Minister could exempt banks entirely from the scheme or he could curtail or cap it in terms of time or percentage. I am wondering what is being looked at in this regard.

On recommendation No. 4, if you have a bank which says that it has moved on from the crisis, that it is ready to start paying its bankers over €500,000 and that it no longer wants to apply the restriction in terms of pay, this is a signal that said bank is ready to start paying tax again. If banks are willing to be moving to pay more than €500,000 senior staff, that bank cannot be also saying that it is still suffering terrible losses and that it continues to struggle because of the losses it had a decade ago. It is reasonable that any bank which chooses to no longer apply the restriction and the pay cap should no longer be able to avail of the deferred tax assets scheme and should be able, since it can pay these large salaries, to pay its contribution to the State in terms of taxation.