Written answers

Wednesday, 10 July 2019

Department of Finance

Banking Sector Data

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
Link to this: Individually | In context

148. To ask the Minister for Finance the mechanism for calculating the bank levy; the way in which it is apportioned between institutions; the estimated yield that would result in 2019 from doubling the value of the levy and individual charge that would apply to each relevant bank; and if he will make a statement on the matter. [30316/19]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context

I am advised by Revenue that section 126AA of the Stamp Duties Consolidation Act 1999 imposes an annual levy on banks for each of the years 2017 to 2021 that is intended to raise a fixed amount of €150 million in each year. This fixed amount is apportioned between the banks on the basis of the amount of deposit interest retention tax (DIRT) paid by a particular bank in a specified year (the base year). The amount of the levy paid by a particular bank must therefore change whenever the base year changes. A change in the base year necessitates a change in the rate of the levy to ensure that the overall fixed amount of the yield is maintained.

The levy is currently charged at the rate of 59% of the DIRT paid in the 2015 base year, the base year for the years 2017 and 2018. The year 2017 is the base year for the years 2019 and 2020. In 2017 approximately €88 million DIRT was paid which was significantly lower than the amount paid in 2015. If left unchanged, the current rate of 59% would yield only €52 million when the levy for 2019 is due to be paid on 20 October 2019. The doubling of the current rate to 118% would yield approximately €104 million. The rate required to maintain the €150 million yield for the years 2019 and 2020 is 170%.

I announced in May that, to ensure that the €150 million yield is maintained, I intend to bring forward a Financial Resolution on Budget night 2019 increasing the rate of the levy to 170% to be charged on DIRT payments made in 2017. This will be subject to the enactment of Finance Bill 2019.

I am also advised by Revenue that, under section 851A Taxes Consolidation Act 1999, confidential taxpayer information may only be disclosed by Revenue in certain specified circumstances. These circumstances do not include the details of DIRT payments made by the banks who are subject to the bank levy. I cannot therefore provide details of the amount of the levy that currently applies, or that will apply, to individual banks.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
Link to this: Individually | In context

149. To ask the Minister for Finance the dividends received from the public shareholdings in Irish banks in 2018; the manner in which the revenue was used; the projected dividends expected in 2019; his policy on the use of dividends from the State shareholdings in financial resolutions; and if he will make a statement on the matter. [30317/19]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context

The State's shareholding in Allied Irish Banks and Bank of Ireland are directed investments under the Strategic Investment Fund (ISIF) and it receives dividends from these investments. The state's shareholding in PTSB is held by the exchequer, the bank has not paid a dividend in recent years.

The following dividends were received by the ISIF in 2018 and 2019:

Irish Banks2018 2019
AIB €232m €328m
BOI €17m €24m
Please note that the dividend received by the ISIF in each year relates to the previous financial year in the banks. Hence the dividend received in 2018 relates to AIB's/BOI's 2017 financial year etc.

The ISIF allocates the dividends received into its discretionary portfolio for investment. Under the ISIF's investment strategy ISIF investments must be made on a commercial basis and in a way that supports economic activity and employment in the State. The latest strategy was announced on 1st February 2019 and can be found at .

The Deputy should note that the Government is not permitted to make withdrawals from the Discretionary Portfolio before 2025. Beyond 2025, the ISIF can make a dividend payment of up to 4% per annum to the Exchequer. Further details can be found in this publication on the ISIF from the Parliamentary Budget Office (PBO): .

Comments

No comments

Log in or join to post a public comment.