Gerald Nash (Louth, Labour)
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32. To ask the Minister for Finance if he plans to reverse recent cuts to the bank levy given that a potential rise of European Central Bank rates will boost the incomes of Irish banks; and if he will make a statement on the matter. [9484/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Finance (No.2) Act 2013 introduced the Financial Institutions Levy for the three-year period 2014 to 2016 with the purpose of enabling the banking sector to contribute to economic recovery. Finance Act 2016 extended the levy to 2021. The annual yield of this levy has been approximately €150 million.

In advance of Budget 2022, and in light of the then pending lapse of the Levy, I took a decision to extend it for another year and to apply it only to those banks that will continue to operate in the Irish market going forward. This was announced in Budget 2022, and provided for in legislation is section 60 of Finance Act 2021.

Under the relevant provision, the banks remaining in the market will not pay anymore in 2022 than they paid in 2021. This means that the levy is expected to generate in the region of €87 million in 2022. The reason, I adopted this approach was due to my concern that any extra levy placed on these banks would be passed directly onto their customers.

My decision to exclude the two banks who are leaving the Irish market, Ulster Bank and KBC, was taken in order to minimise the potential for disruption to bank customers that could arise from a possible accelerated exit if they were made subject to the levy in 2022.

In relation to the future of the levy, I have asked my officials to examine the matter and to present me with options for my consideration in advance of Budget 2023.

It would not be appropriate for me to comment on the possible outcome of that work at this time.