Minister for Finance Michael McGrath (pictured) has said that the bank levy will be extended beyond this year.

The levy was introduced in Budget 2014 to ensure that the sector made contribution to the recovery of the economy after the bail-out of the banks in the wake of the financial crash of 2008.

The charge was extended a number of times, and had been due to apply up to the end of 2023.

Minister McGrath told RTÉ News, however, that he believed it was appropriate that the levy should be extended into 2024, and that he would be recommending such a move to Government.

He added that the final details on the duration, scope and level of the levy would be announced on budget day.

Profits

The Department of Finance held a consultation process on the measure earlier this year.

The three main Irish banks have all reported strong increases in profits for the first half of 2023.

The levy currently applies to credit institutions authorised under section 9 of the Central Bank Act 1971 if they have paid more than €100,000 DIRT (Deposit Interest Retention Tax) in a specified ‘base year’ – currently 2019.

DIRT calculation

It is calculated as a percentage of the amount of DIRT paid by the financial institution in respect of the base year.

The current percentage Is 308%, having been raised in recent years in order to bring in the targeted amount of revenue, as low interest rates reduced the amount of interest paid by banks to savers.

The legislation providing for the charge is contained in section 126AA of the Stamp Duties Consolidation Act 1999.