Ruth Coppinger (Dublin West, Solidarity)
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221. To ask the Minister for Finance the estimated amount that could be raised from imposing a 2% public health levy on the profits of private human health and pharmaceutical companies here, including nursing homes and home care agencies. [34530/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that on the basis of information included in the Corporation Tax returns filed for the tax year 2015, the potential yield from imposing a 2% levy on the profits of private human health and pharmaceutical companies, including nursing homes and home care agencies, is tentatively estimated to be in the region of €200 million, with over 99% from the pharmaceutical companies.

This yield is based on the industry code assigned to companies on Revenue records and does not include any yield associated with subsidiaries of these companies not primarily involved in the sectors mentioned in the question.  It has been assumed that the levy would apply to the taxable profits of pharmaceutical companies, nursing homes and home care agencies but would not apply to medical practices or private hospitals. Additionally the potential yield assumes no significant behavioural change on the part of these companies that could cause the expected levy yield to fall below expectations and could also cause a decrease in Corporation Tax receipts.

Ruth Coppinger (Dublin West, Solidarity)
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222. To ask the Minister for Finance the estimated amount that could be raised by applying a financial activities tax as proposed by the IMF. [34531/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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I take it the Deputy is referring to proposals made by the IMF in 2010.

In its 2010 report to the G-20 the IMF suggested three forms of FAT. The IMF considered that the revenue potential of the various forms of FAT would differ across countries, depending on the relative size, profitability and wage structures of their financial sectors, and would be constrained by the need to apply low rates where the impact on competitiveness or the risk of avoidance were of concern. The IMF report indicated very broad orders of magnitude for the potential tax base of the suggested forms of FAT for the pre-crisis year 2006.

In respect of Ireland, the broad orders of magnitude estimated for the base were 8.4% of GDP, 5.7% of GDP and 1.8% of GDP respectively for the three different forms of FAT in 2010 but the base is likely to be different now. The potential yield would of course depend on the tax rate applied. In the absence of further detailed work it would not be possible to estimate the amount to be raised by a FAT. I am unaware of any state which has adopted the FAT as proposed by the IMF.

In Ireland we have a tax on financial transactions in the form of a Stamp Duty on transfers of shares in Irish incorporated companies. This currently stands at 1%. The yield from this charge was €424.13 million in 2015 and €391.94 million in 2016. 

The Financial Institutions Levy announced as part of Budget 2014 is a revenue raising measure which provides for a contribution from the banking sector to Ireland's economic recovery, with an estimated annual yield of €150 million.

The entire banking system has been underpinned by the strong Government support provided both here and abroad and it is appropriate therefore that the banking sector should make a contribution to the State's economic recovery. Accordingly, my predecessor announced in Budget 2017 an extension of the levy out to 2021. This will bring in an additional €750 million over the period, which is a very significant additional contribution to the Exchequer.

The levy was previously calculated on DIRT payments made in 2011. Following a review of the calculation methodology, the levy will now be based on DIRT payments made in a base year which will change every two years.

* 2015 will be the base year for 2017 and 2018,

* 2017 will be the base year for 2019 and 2020

* 2019 will be the base year for 2021. 

The introduction of the rolling two-year series of base years has a twofold effect. Firstly, it ensures that financial institutions entering the market over the five further years for which the levy will apply will be subject to the levy and financial institutions exiting the market will cease to be subject to the levy. Secondly, it will help to correct, on an ongoing basis, any anomalies for individual institutions thrown up by prevailing market conditions, such as the interest rate offering, in any one year.

In order to maintain the annual yield from the levy at €150 million, the rate at which the levy is charged will increase from 35% to 59% for 2017. This is because the assessable amount, DIRT payments in 2015, have reduced significantly since 2011. This new rate, combined with the new 2015 base year, will preserve the existing contribution of €150 million paid annually by the affected financial institutions. That rate will be subject to review to ensure that the yield from the levy is not impacted from changes in interest rates and/or DIRT rates.