Frances Black (Independent) | Oireachtas source

This calls for the Minister to produce a report outlining the potential revenue implications for the State if the 50% limit on deferred tax assets was reimposed. Every year, my group raises this issue at each Finance Bill. It seems we have made little progress on this area.It has been well publicised that Irish banks benefit hugely from this scheme due to the amount of historic losses they have from the financial collapse in 2008. That caused untold suffering for most people and did not result in an effective tax write-off.

In 2017, those banks shaved €400 million from their tax bills by offsetting financial crisis losses against taxable profits. What is most shocking to the average person in respect of this policy is that these losses can be carried forward indefinitely to shield their future profits from tax. The banks are, in effect, avoiding paying hundreds of millions of euro in tax that they owe by shielding profits with losses that occurred a decade ago. Before 2012, a 50% limit was imposed by former Minister, Brian Lenihan. However, this was lifted by former Minister, Michael Noonan and the result is a number of banks being able to avoid paying taxes on profits.

While the banking levy is in place, it is unacceptable that banks are being shielded from paying tax on profits. This scheme is costly. The Comptroller and Auditor General has estimated that the cost in future of foregoing tax revenue from DTAs could be as much as €29 billion, with €12 billion related to the financial and insurance sector. This revenue could be used for housing, healthcare, mental health or climate action. Unfortunately, it is instead being used to essentially give large financial institutions a tax break. I hope the Minister of State will accept this recommendation.