Pearse Doherty (Donegal, Sinn Fein)
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263. To ask the Minister for Finance the estimated full-year additional revenue in 2021 that would be raised by increasing the bank levy by each of 10 percentage points and by 10%; and if he will make a statement on the matter. [18774/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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Section 126AA of the Stamp Duties Consolidation Act 1999 imposes an annual levy on certain financial institutions on the basis of the amount of deposit interest retention tax (DIRT) payable by them in a specified ‘base’ year. The levy is intended to raise a fixed annual amount of €150M. The amount of the levy paid by a particular financial institution 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.

In relation to the years 2017 and 2018, a rate of 59% was required to yield €150M based on the financial institutions’ DIRT liability for the base year 2015.  The year 2017 is the current base year used to determine the levy for the years 2019 and 2020.  As there was a substantial fall in DIRT payable by financial institutions since 2015 the rate was increased from 59% to 170% to maintain the €150M yield. Following a continuing fall in DIRT payable since 2017, the change to the next base year of 2019, in relation to the levy payable for the year 2021, will necessitate a further rate increase. I am advised by Revenue that it expects that the rate will have to increase from 170% to 308% to maintain the €150M annual yield for the year 2021.  An increase in the current rate of 170% by each of 10 percentage points or by 10% would therefore not yield any additional revenue but would instead result in a reduced yield.