Ireland plans super-tax for bankers' bonuses
Irish Finance Minister Brian Lenihan told parliament Thursday he planned to introduce a 90-percent tax on bankers' bonuses after a row erupted about a plan by Allied Irish Bank (AIB) to pay 40 million euros (52.8 million dollars) in bonuses to staff. Skip related content
Related photos / videos
The tax will not affect the planned AIB bonuses, a spokeswoman for the finance ministry said, as they relate to work done before 2009.
"The tax will not apply retrospectively to contractual arrangements in relation to 2008 because legal advice says that could not be done," she added.Lenihan told the Dail, the lower house of parliament, that "legislation brought in on foot of the bank guarantee already prohibits the payment of any performance bonuses to senior bank executives.
"No bonuses have been paid to bankers for 2009 or for 2010."
He welcomed a clarification by AIB's new executive chairman David Hodgkinson who told staff the payments reflected the past, and this was not the way the bank intended to conduct itself in the future.
"To copper fasten this restriction I will include an amendment in the upcoming Finance Bill to introduce a 90 percent tax rate on any future banker's bonus in all guaranteed institutions."
RTE state radio said almost 55 million euros was paid to AIB staff in bonuses last year and the average bonuses to be paid for 2,400 staff this year is 16,700 euros.
"Taxpayers have paid 3.5 billion euros to bail out the bank to date. The 40 million euros represents a large part of the 572.9 million euros the bank is worth on the Irish Stock Exchange today," RTE said.
The main Fine Gael opposition party described the bonus payouts as "outrageous" and called for a 99 percent tax.
"Let's be absolutely clear," said deputy leader James Reilly. "The only reason that AIB can actually pay these bonuses is because taxpayers' have bailed them out. And the same bank has the cheek to expect further handouts from the State."
He said the US, the UK and France had brought in super-taxes "to tackle the ongoing greed and profligacy of corporate fat cats".
Reilly said the 95 million euros being paid out in 2009 and 2010 was more than the 90 million euros being taken from carers, blind people, widows, and people with disabilities in this week's budget.
"The bankers will get their bonuses just in time to spend Christmas in the Caribbean, while blind people may no longer be able to afford the upkeep of the guide dog which allows them to go to the shop," Reilly said.
Post a Comment