Brendan McGahon
Question:14 Mr. McGahon asked the Minister for Finance when the proposed review on the abolition of the bank levy will be completed; and the progress made to date in view of the increase of bank profits in the year 1993.
Ceisteanna—Questions. Oral Answers. - Bank Levy.
As the Deputy may know, I agreed with the banks in 1992 that the current bank levy arrangements would be reviewed after three years in the light of developments over the intervening period. On that basis I will be reassessing the levy arrangements in the context of the 1995 budget. With that in mind, officials of my Department and the Revenue Commissioners will be commencing discussions with representatives of the banking sector shortly. I would point out to the House that the review will examine all aspects of the operation of the levy over recent years both from the perspective of the Exchequer and the banks.
Is the levy an issue in the discussions that the Taoiseach has convened with the high street banks?
No. The Government of the day felt that the banks were using tax shelters and other means to keep their corporation profits tax at a low level. Had the banks not used the tax shelters and paid their corporation profits tax we would have handled the levy differently. For providential reasons the banks did not want to use the levy. That arrangement has been operating for three years. I do not wish to give my view as to whether it is satisfactory because we will be commencing discussions with the banks shortly and that will be dealt with separately. There will be a review of what was agreed in 1992 to see how it has worked in the 1992, 1993 and 1994 tax years and what amendments we need to bring forward next year.