Tuesday, 12 October 2021
Department of Finance
As the Deputy is aware, the Financial Institutions ("Bank") Levy was introduced for the three-year period 2014 to 2016 with the purpose of enabling the banking sector to contribute to economic recovery. In the Finance Act 2016 the Levy was extended until 2021. That extension had been subject to a review being undertaken of the methodology used to calculate the levy, which included a public consultation with stakeholders in June 2016. That stakeholder exercise was inconclusive in terms of getting external agreement on a possible replacement to the DIRT-based methodology.
Ultimately the DIRT-based formula was retained but the then Minister for Finance took into account the suggestion that arose from the Public Consultation that the base year for calculating Levy liability should not be static, and announced in Budget 2017 the introduction of a rolling two-year series of base years.
In order to protect the annual €150 million yield based on the financial institutions' DIRT liability, the rate payable has increased from 35% in 2014 to 308% for 2021.
The Bank Levy is due to cease in 2021. I am currently considering whether to extend the levy beyond 2021, and if so the format it will take. In making my decision on this matter, the Deputy should note that I will be giving consideration to the significant changes taking place in the Irish banking sector, including the planned withdrawal of two retail banks from the market.