Government targets €150m a year from bank levy over next three years
Levy relates to amount of tax paid on deposit interest by institutions in calendar year 2011
The new levy on financial institutions will relate to the amount of tax paid on deposit interest by the institutions in calendar year 2011. Photograph: Getty Images
The Government has announced a special levy on financial institutions here to raise €150 million annually over the next three years.
The measure was announced today by Minister for Finance Michael Noonan in his budget speech.
The Government has decided the levy will apply between 2014 and 2016.
The levy will relate to the amount of tax paid on deposit interest by the institutions in calendar year 2011.
It mirrors a similar levy on Irish banks that operated from 2003 to 2005 and which yielded more than €100 million a year to the exchequer.
Mr Noonan said details of the levy would be contained in the Finance Bill, which will be published in coming weeks.
The Government has also increased from €500,000 to €3 million the threshold for loan applications by SMEs that can be reviewed by the Credit Review Office.
The Government said the increase in the number of reviewers sanctioned in last year’s Budget would ensure the increased workload arising from this measure will be handled in a “timely and comprehensive manner”.
This initiative is aimed at meeting new lending demands from borrowers currently banked with non-trading banks and banks that are strategically exiting the Irish SME lending market.