Minister for Finance Michael McGrath on Thursday launched a public consultation on the future of the Irish banking levy, which has been in place since 2014.
Mr McGrath’s predecessor, Paschal Donohoe, said in his Budget 2023 speech last September that he was extending the levy, which raises about €87 million annually, by a year to the end of 2023.
Officials in the Department of Finance had weighed the future of the levy when carrying out a review of Irish retail banking last year, but refrained from offering any recommendation in their final report.
However, early drafts of recommendations being pushed by the review team in the latter stages of the process included one calling for a banking levy, in place since 2014, to be phased out over five years to 2028, documents released to The Irish Times under freedom of information laws show.
Parties’ general election manifestos struggle to make the figures add up
On his return to Web Summit, the often outspoken chief executive Paddy Cosgrave is now an epitome of caution
Surviving a shake-up: is restructuring ever good for staff?
The Irish Times Business Person of the Month: Dalton Philips, Greencore
The levy was introduced in 2014, initially for two years, before being extended to the end of 2021 and, again, in the budgets for 2022 and 2023.
Corporation tax boost / Have we reached peak house prices?
While the charge had generated €150 million a year until 2021, the Government decided in Budget 2022 to exempt Ulster Bank and KBC Bank Ireland from the levy that, after the two overseas-owned lenders announced their plans to exit the Irish market. The levy now only applies to AIB, Bank of Ireland and Permanent TSB.
Interested parties have been given until Friday, May 5th to make submissions on the levy.
“The retail banking landscape in Ireland has undergone significant changes in recent years and these changes are a reflection of the wider challenges the banking sector is facing,” the consultation document said.
“The retail banking review was established by the Minister for Finance to examine these issues and its report was published in 2022. One of the review’s findings was that the levy, as it is currently constituted, has a number of impacts on the Irish retail banking market. In its examination of the levy, the review suggested that it could be reformed to level the playing field for traditional domestic banks, but to achieve this would require broadening the scope of the firms it applies to.”
