Budget 2025 to retain bank levy, says Jack Chambers
Finance Minister Jack Chambers is planning to retain the bank levy in the upcoming budget.
The Fianna Fáil minister said he will now recommend to the coalition leaders that the levy be extended into 2025. Mr Chambers said the matter has been examined by him and officials within the Department of Finance.
Banks remain “highly profitable” in Ireland at present, he said, adding that they are benefiting from the ongoing stable economic position the country is in. “I think it is entirely appropriate that banks continue to make a contribution back to the State in this context,” Mr Chambers said.
“The return generated by the levy will provide me with additional scope on ensuring there is a substantial income tax package and options on further reducing the tax burden for families and workers as part of Budget 2025.”
The levy, which was introduced in 2014, aims to raise revenue from the profits of the four major banks which received assistance from the State following the financial crisis: Bank of Ireland, AIB, EBS and PTSB. It is calculated based on the deposits within the four banks.
Figures provided in last year’s budget show that the levy itself is expected to collect €200m across 2024. A figure is not yet available on how much the levy would raise if extended into 2025.
He said he is “acutely aware” of the ongoing struggles people face due to the cost-of-living crisis, saying that the Government would provide additional supports in the October 1 budget.
There will be further consideration of the bank levy, including its exact make up, ahead of the budget, he added.
Direct budget negotiations between ministers are yet to begin, but work is underway within the Departments of Finance and Public Expenditure to put together the overall package.
The total package, as set out in the Summer Economic Statement, will cost €8.3bn across spending and taxation measures. In particular, €6.9bn has been earmarked for spending increases, while €1.4bn is to be used for tax measures.
Alongside this, the Government leaders have signalled strongly that there will be a cost-of-living package within the Budget — the third year in a row they will have featured.
Among the measures being floated include the continuation of the 9% VAT rate on electricity and gas over the winter months, to prevent sudden energy bill price hikes.
Several Government ministers are clamouring for an increase to the €750 renters tax credit, while changes to inheritance tax have been strongly signaled.
