Report on Banks’ Corporation Tax shows €117m in tax foregone in 2017 - Pearse Doherty TD
Sinn Féin Finance Spokesperson Pearse Doherty TD has called on the government to end the corporation tax holiday for the bailed out banks. Deputy Doherty made his call as a Department of Finance report on the tax treatment of banks' profits was received by the Finance Committee.
The report shows that at least €117m in tax was foregone last year as a result of the policy of allowing the bailed out banks carry forward losses to write off against their profits. He said as the banks grow in profitability the amount of tax lost to the state could increase year on year unless changes are made.
The Donegal TD highlighted that Sinn Féin’s measure to put a cap of 25% on losses that can be carried forward in one year with a limit of ten years in which the losses can be used could bring in €175m in annual additional taxes for the State.
Deputy Doherty said:
“I welcome the release of this report however long overdue it is. The report states that with a hypothetical 50% cap, as was previously applied before Michael Noonan scrapped it, €117m in extra taxes would be paid by the bailed out banks.
"Under Sinn Féin’s proposal to place a cap of 25% on losses that can be carried forward in one year with a limit of ten years in which the losses can be used would bring in up to €175m extra in taxes each year for housing and public services.
"It is clear that the Minister’s pre-ordained decision not to change tax policy is reflected in the report’s findings. The report is selective in its examples. For example, it ignores the fact that Britain charges a bank levy, a restriction on losses and a Corporation Tax surcharge.
"The fact remains that Ireland is an outlier in its generous approach towards carrying forward of losses by banks. The cost, we now know, is in the hundreds of millions each year.
"The report states that the Department’s best estimate is that €400m in the value of State shares could be lost - a figure dwarfed by the potential billions in regular tax returns that would accrue under Sinn Féin’s policy.
"As Budget Day approaches the Minister should bear in mind the 10,000 homeless people, the million people on waiting lists and the huge infrastructure deficit across the country. The report shows a choice between the banks continuing for at least 13 years turning billion euro profits tax free or a sensible, internationally normal approach to cap these losses and create a steady stream of hundreds of millions of euro each year.”